How to Avoid Bad Tech Investments
It's more about transforming your business than just saving money
Let's talk about a major headache for many modern lawyers: Bad investments in technology.
Specifically:
What this mistake looks like when it happens
The reasons why it happens more often than it should
How this impairs the smooth growth of a law practice
And how to avoid the problem
Let’s dive in.
The Mistake: Bad Investments
In addition to creating good systems, every modern business also needs good equipment.
In knowledge work like the practice of law, "equipment" increasingly means software running on computers or handheld devices like smartphones and tablets. And figuring out what software to buy can be challenging for lawyers.
Buying traditional office supplies is a lot easier than buying software and apps.
Not surprisingly, many lawyers wind up buying software that isn't what they expected it to be. Quite often, we wind up with things that make things inefficient instead of more efficient.
Here are some of the problems with making the wrong investments in technology:
Wasted Money: Many lawyers spend money on technologies that "seem like" good ideas but turn out to be a waste of money because the tech doesn't actually do what they expected it to.
Disruption: Even worse than unhelpful technology is buying stuff that creates frustrating disruption and chaos.
Disillusionment: When you make bad investments in technology, you become hesitant to spend more money, even on wise investments that will significantly improve your practice.
Missed Opportunity: Not making smart investments with technology severely limits your potential for growth because technology is the best way to create maximum leverage and maximum efficiency.
Reasons It Happens
It's not hard to understand why lawyers waste money on bad tech investments.
Lawyers are experts in law, not technology. And the number of options to consider is bewildering. But beyond those obvious reasons are less obvious root causes:
For example:
Lack of Strategy: Making purchases without considering how the technology fits into the larger operational picture is a recipe for disruption and disaster.
Bad Recommendations: Trusting vendors and consultants who care more about making money than giving you the best advice based on your specific needs is all too common. Unfortunately, there are too many unscrupulous people willing to prey on lawyers' ignorance about technology.
FOMO: Investing in tools because you see other lawyers are using them is another reason. Some lawyers have side hustles as business coaches and then recommend tech tools they've used in their practice. But too often they lack a broad enough perspective needed to make sound recommendations to others who have different needs and unique situations.
Lottery Mindset: Many lawyers try cutting edge stuff (without any strategy) hoping for some kind of major breakthrough. It's basically the same mindset of compulsive lottery ticket purchasers.
Desperation: (see above)
How To Avoid
So, how do you learn to make better tech investments? In short, making smart investments involves a blend of diligence, patience, and strategic thinking.
To ensure your tech investment pays off, consider the following:
Strategic Assessment: Identify the best opportunities for using technology to make big improvements over the long run. This will help you avoid "shiny object syndrome" and focus on options that offer significant value.
Create a List of Options: make a list of top tech tools that are not being used in your practice but which should be.
Recommendations from experts: Find trustworthy consultants who are fiduciary-minded (as opposed to opportunistic) to help you make strategic assessments.
Recommendations from lawyers: Talk to several other lawyers (with practices like yours) to find out which software options they found most helpful. Interrogate them carefully about the pros and cons.
Focus on ROI: Don't be penny-wise and pound-foolish. Often, you have to make large investments in technology, and so you need to be ready to do so. Focus on the overall ROI of your investments, not just the initial cost.
Using Free Trials: If possible, test new tech tools before committing to buy them to ensure they fit your workflows and actually solve the problem they are intended to solve.
If you want to conduct a strategic assessment, check this one out. I developed it specifically for solo and small firm lawyers.
After you complete the assessment, I'll record a short Loom video with my observations and recommendations for improvement. We can also chat by phone.
If you want recommendations from other lawyers who are using technology to improve their practices, check this out.
And always remember that it's vital to use technology strategically—not haphazardly.
;-)
Ernie
P.S. Here are some news blurbs I share with my close friends (which I consider you to be 😉)
Let me know if you find them interesting or useful.