Is your law firm’s IT budget ready for 2023?
In less than four short months, we’ll be celebrating 2023. There’s no better time like the present to get familiar with your law firm’s 2023 IT budget.
2023 spells one BIG thing for all law firms and their technology: CYBERSECURITY. Between the skyrocketing rate of cyberattacks hitting the legal industry and increasingly restrictive federal mandates on compliance and cyber-insurance, law firms need a plan to meet the costs of protecting their clients’ data.
Brendan O’Brien, vCIO (Virtual Chief Information Officer) of STS, puts it bluntly, “For 2023, TRIPLE your security budget.”
And before you ask: yes, it really is that bad out there. Firms are beefing up their security, but many others remain at high risk of being targeted by threat actors. Why? Because cybersecurity has a price tag in both money and time. Threat actors always look for easy victims; The less work they have to do, the better, so make it too much of a headache for them to bother.
Our advice for 2023 is: Don’t be a victim. Set your firm apart from the rest and pay attention to its IT standing.
Does my law firm really need an IT budget?
If you’re a law firm that cares about:
- Streamlined processes
- Rapid and efficient workflows
- Maximizing billable hours
- Clarity on what your technology is or isn’t doing for you
- Basically, everything you need to run a successful law firm
Then now is the time to focus on strengthening your IT planning and budget strategically. But you might be wondering: what does that really mean?
Buzzwords aside, strategically approaching your future IT budget plan involves:
- Having clear, documented goals and growth plans for your firm
- Understanding the current state of your firm’s technology and its needs
- Recognizing the value IT holds for your legal business as an investment, NOT an expense
- Knowing what your firm’s current IT budget is
- Planning your IT spending to align with your firm’s goals and growth
How many law firms have a strategic IT plan and budget?
Truthfully? Not many.
For starters, law firms generally lack a well-defined technology roadmap so it’s unclear what aspects of their IT they should spend more on. The lack of clarity results in addressing their IT needs in a piecemeal fashion with no direction or purpose, such as buying a new computer when the old one breaks. As you might have already guessed, this approach to technology flushes money down the drain with no real benefits for anyone.
Another influencing factor is how firms receive their revenue. Are you paid on a set schedule, or in irregular high dollar amounts? With the latter, it can be difficult to budget for the years ahead, and that goes for any industry. Despite this challenge, it’s still a top priority to map out your firm’s current and future IT spending.
Lastly, most firms don’t have the profit or process to develop an IT budget. However, expectations for what your IT budget should be are often a far cry from the truth; it doesn’t need to be perfect or limitless. As O’Brien says, “An incomplete budget is BETTER than NO budget.”
Your budget just needs to, for starters, exist.
Common IT budgeting mistakes law firms make
Many law firms don’t have the insight to understand how to manage IT at a high level, especially for more complex aspects like cybersecurity, and what IT-related annual costs they actually incur. Many assume that cybersecurity and ground-level IT are bundled together and operate similarly, but that couldn’t be further from the truth. Because of the gap in understanding, many firms end up with an ill-prepared budget and are forced to cut costs when it comes time to strengthen their security hygiene.
Another common mistake is the break-fix approach to IT that many firms have. It’s not an uncommon way for many to view technology; if something’s broken, you fix it. If it’s not broken, you don’t fix it. However, you’re a prestigious law firm built to protect your community in the courtroom. You can’t grow or prepare for security threats if you wait for something to go awry before you pay attention. It costs way more money and doesn’t do anything but put out a fire that could’ve been prevented in the first place.
IT budgeting best practices
Our biggest piece of advice for you:
Create an IT budget, no matter how bad you think it is. Start simple, it doesn’t need to be perfect. The importance of having a budget lies more so in the process than having all your math perfect the first time. As James Waryck, CEO of STS says, “Firms need to know what they’re paying for. The budget starts to create clarity and understanding on where your investment dollars are going.”
Review and adjust your IT budget
Review the budget you created and make sure it’s realistic with your actual IT spending. The results may surprise you. One of our clients was able to figure out they were spending double what they initially thought after creating their first budget draft, but only after running the recorded numbers against their first budget draft.
If you find yourself in a similar situation, create a plan to work against the deficit. If you’re struggling with finding the hole in your budget, reach out to your technology partner or budget champion for help. Having clear visibility into what your firm is actually spending is an excellent first step to minimize the discrepancies, even if there are mistakes.
Assign an IT budget champion
Creating and planning an IT budget for your firm is a time-intensive, lengthy process. Assign a budget champion to the task of understanding the budget and providing clear internal insight. The question partners like to ask is “Why are we spending so much on technology?”, but if everyone is already aware of how the budget works, what it covers, and what value it brings to your firm, you’ll be under less pressure to answer.
Plan your IT budget right now
The earlier the better – IT budgeting takes time.
Aligning your goals, considering how investing in technology will help you meet those goals and projecting what direction your firm is moving in over the next few years is not an overnight process; It requires a lot of talking, learning, understanding, and new territory. This is not a one-time decision, either: Revisit your firm’s IT budget every quarter, and update it annually as needed.
As we said before, there’s no better time than the present.
Talk to your employees
Unsure what technology to invest in?
Just ask the people using it every day.
Send out surveys, have conversations, find where their pain points are. Determine if your current IT standing is helping them do their job or impeding them with technical mishaps. Some firms do take an open approach, but many don’t, choosing to keep employee feedback private from their technology partners. Whatever your firm chooses, consider the main reason for curating your IT environment: making life easier.
Get a Security Maturity Level Assessment
CEO James Waryck says, “If you haven’t done an assessment, GET ONE. You need this to start the conversation that’ll lead to predictable budgeting and planning. You need to illustrate the value you’ll get for your dollar.”
vCIO Brendan O’Brien agrees, especially if your firm often participates in unplanned IT spending. “PLEASE, please think about investing the time in getting a Security Maturity Level Assessment.” Luckily, you don’t have to look any further than the page below to find one.
Sign up for our Security Maturity Level Assessment (SMLA). It’s the best IT investment you can make in 2023.
Check out our other blogpost for more tips on Technology Budget Planning: Technology Budget Planning in 2022 is a MUST for all law firms, regardless of your size.