Avoiding the Post-DMS Pit Of Dispair

The mandate of this blog is to help people avoid making the same old bad decisions when it comes to legal technology and legal operations. It has been inspired by Charlie Munger’s quote,  “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

Executive Summary:

After years of helping law firms and legal departments better manage their work and increasing workloads, I wanted to share a few insights on what typically happens 6 months down the road after a new tech solution like a Document Management System (DMS) is implemented.  My hope is that these insights help legal teams at a crossroads to course correct, and to help legal ops professionals future-proof their tech decisions. 

Six months post-deployment, Legal departments who have implemented a new Document Management System (DMS) typically improve their ability to organize and retrieve documents. But on the other hand, they frequently fall short of addressing broader operational challenges related to the work they conduct with those documents. 

This article highlights the hidden pitfalls of post-DMS implementation, particularly the tendency to resort to spreadsheet-based workarounds that result in their own set of productivity challenges.

Avoiding Bad Technology Selections:  2 Practical Frameworks

Drawing from real-world experiences of legal departments, we present two practical frameworks for evaluating next-step technology decisions: i) outcome-based analysis, and; ii) inversion thinking. 

These two approaches help teams make more deliberate technology choices—ones that genuinely improve operational efficiency without creating unintended consequences.

Managing Your Documents (but not your work)

Let’s work with the assumption that it’s been 6 months or more since you purchased and deployed your new legal DMS. If you’re like most groups, here’s where you find yourself. You now have a single source of documents (mostly—because there are always outliers). We expect this has made your working life easier. e.g. Saving emails directly from Outlook along with your documents is amazing. Better still, search actually works when you’re looking for something.

Your DMS has been successful in delivering these feature-functions:

• Single source of documents
• Versioning
• Powerful Search
• Cloud-access
• Integrations with Office
• Secure

Challenges Persist

However, your work days haven’t gotten any shorter. And the pressure and stress of in-house legal work still remains:

• Unrealistic internal client demands
• Overwhelming volumes of work
• Unrelenting pressures from management to deliver more with less

To address these challenges, you look first to your DMS because that’s where you’ve spent money most recently—with the hope that it can provide the solution.

More Work (but not enough flow)

During the sales process, DMS vendors routinely mention how their solution offers “workflows” to automate your processes and improve your legal work. Unfortunately, we find most buyers are not explicit enough in their questioning of the vendor’s use of the term “workflow” and how it may differ from their own assumptions. Therein lies a problem: two parties operating with divergent understandings of what “workflow” means.

When you reconcile these misunderstandings, you quickly come to the conclusion that DMS solutions are very good for a certain set of capabilities. But, they are not capable of what typical in-house teams need for contract tracking, workflow and dashboarding.

Spreadsheets to the Rescue

To address the ongoing challenges, smart conscientious team leaders typically turn to keeping a spreadsheet with a running list of active agreements (and other activity) to try to keep their team in sync. Why a spreadsheet? Because it’s a tool they know—and they don’t need anyone’s approval (ie. IT) to use it. 

Soon they learn that keeping even a rudimentary spreadsheet up-to-date for even one operating group takes hours a day. For the person responsible in each group, this becomes a daunting time-consuming task. In fact, it can easily suck up 10 hours a week on top of an already ridiculous workload.

Second and Third-Order Effects

Managing by spreadsheet, is an excellent example of second-order effects. Second-order effects being the unforeseen and unintended consequences of one’s decisions and actions. The direct (or first-order) action was choosing to use a spreadsheet to organize the team work. At first, it appears that there’s only the front end time of a few hours to format, refine and populate. (A logical and simple choice because you have the tools at hand and know how to use them. And, you already own the software license to use it.)

The second-order effects are you need to take hours per day to research, populate, update and refine the spreadsheet and email it out to team members. Further, the third-order effects are you now have to work longer to keep on top of your own responsibilities because you’re responsible for the spreadsheet.

Every Choice Has Consequences 

The key idea here is that every decision has costs or trade-offs. If the positive benefits do not outweigh the negative by an order of magnitude, then the decision probably wasn’t a good one. In medicine, this is called iatrogenics, where the treatment causes you to be in worse health–and it violates the first rule of medical practice.

Once people admit that even with no licensing costs, the spreadsheet option has serious second and third-order negative effects, they typically start investigating contract management solutions, matter management, low code solutions, and the like. If this is you, now is the time to be very careful.

You’ve just proven that a small, low-risk unless it’s your time being sucked up by managing the spreadsheet, low-cost decision can have bad second, and third-order effects that can make your situation worse and not better. (Which is not to say there aren’t benefits because the spreadsheet is helpful for the team, but the negative effects far outweigh the positive.)

Because you’re now embarking on a technology solution search that you and your team will be personally associated with. And if it doesn’t work out, your reputation could take a hit. Here are two simple yet powerful tools that you and your team can use to increase the odds you’ll select the right solution for your situation and reduce any risk to your company or your team.

Two Helpful Risk Mitigation Tools: Outcomes & Inversion

1. Outcome-based Analysis

Rather than the traditional approach of making a laundry list of functions—and then evaluating each vendor or solution by how many checkmarks they get—outcome-based analysis focuses on what outcomes or changes to your current working conditions you want to bring about.

Generally you start with what job needs to be done, and then what is inefficient, difficult or frustrating about trying to get that job done. When people adopt a new solution, they are less likely to evaluate it feature by feature, rather than how it affects their workday and if it helps reduce frustration and allow progress to happen more easily.

2. Inversion Exercise

The second useful tool we’d suggest you try is inversion. Simply put, you list the things you don’t want to happen, and it is often easier than getting your team to agree on what should happen. The logic behind it is that when dealing with complicated decisions or analysis, it’s very easy to get bogged down in the minutiae. So, start by making sure no matter what decision is taken, you avoid making the situation worse. 

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” —Charlie Munger

Examples of What You Don’t Want:

• Diluting the impact or value of our previous tech investments
• Creating new document, data and knowledge silos 
• Increasing our risk exposure or lock-in with unresponsive vendors
• Introducing solutions that require more IT or technical users to support 
• Technology that inhibits our ability to adapt to changing conditions 
• Large, expansive, and expensive solutions that can’t be piloted or start small
• Older, inflexible technology with a great deal of technical debt 
• Creating more work due to technology workarounds and application hopping

Making Technology Work for You. Not Against You.

Preparation helps avoid LegalTech pitfalls. The journey from DMS implementation to finding complementary solutions that actually reduce workload is fraught with potential traps. By applying outcome-based analysis and inversion thinking, legal teams can avoid the common trap of trading one set of problems for another.

The key to success lies not in finding the perfect solution, but in making consistently good decisions that:

• Build upon, rather than dilute, existing investments
• Address core operational pain points
• Be aware of costly second and third-order effects

Effective Implementation of Technology Solutions

Remember, the goal isn't to be the most innovative legal department, but rather to be consistently effective in how you evaluate and implement technology solutions. As your team embarks on this journey, focus first on avoiding decisions that could make your situation worse, then on finding solutions that demonstrably improve your team's daily operations. This balanced approach, while perhaps less exciting than chasing the latest legal tech innovation, provides a more reliable path to sustainable improvement in legal operations.

Additional Resources

If you’ve found this useful, you can download our full LegalTech Buyers' Guide Whitepaper here containing more information and tools to reduce your risk and improve your return from your LegalTech purchases.