There's a new acronym in town. And it has potential to change the way large law firms deploy attorneys and manage resources.

Manufacturing concerns have long relied on Enterprise Resource Planning (ERP) solutions to coordinate the ebb and flow of raw materials, customer orders and manpower. Traditional ERP applications are capable of managing and executing simple purchase and sale transactions, but cannot support the inherently collaborative nature of professional services project definition and delivery. Lacking a centralized automation solution, the service industry has often relied on stand-alone project management tools, spreadsheets, and in many cases pen and paper, to manage their activities.

"Professional Service Organizations are being faced with increased competition, more demand from their clients to have on-time, on-budget engagements, a tightening of available consulting resources and a need to tighten up their procedures," said Bruce Harrison, Director of National Sales of Augeo Software North America. "In short, they will find themselves more and more focusing on improving the efficiency of their operations as a way to increase their revenues and bottom line, and stay ahead of their competitors."

This efficiency focus has given birth to a new breed of software application - Professional Services Automation systems.

Professional Services Automation systems (PSAs) were created to streamline the core business processes of professional services organizations, such as law firms. They work by connecting all personnel on an Internet-based platform, automating processes from client development to project management to billing, and providing an intuitive means of managing and utilizing an organization's intellectual capital. PSAs can close the gaps in time and geography that can shrink a professional services organization's profitability. Hypothetically, PSAs help deliver the right person to the right job at the right time, with the right information available to do that job?and a mechanism for invoicing for that work in a timely manner.

Analysts at IDC estimate that the Professional Services Automation marketplace will produce $1.3B in software revenues by the year 2001. Incidentally, the professional services economy is currently pegged at $2.1 trillion, according to Benchmarking Partners.

Automating Resource Management: Why?
Today's large law firm landscape is marked by aggressive expansion and consolidation. It's also marked by increasing turnover, as many associates feel compromised or insignificant in the turmoil that results from growth. As a firm's presence expands to new cities (or new countries) - and attorneys are increasingly traveling among various firm offices and client sites - tracking the activities and availability of staff is increasingly difficult. The success of the firm still depends upon the firm's talent pool and the ability of the firm to optimize that talent, wherever it may reside. The Resource Management component of PSAs can help by providing a platform that permits the firm to effectively deploy the cumulative knowledge of the people in the firm.

With Automated Resource Management, firm managers can have ready access to any attorney's special areas of focus, billing rates, and availability, all in a dynamic Internet-based environment. This facilitates the firm's ability to deploy the most appropriate person in the firm to the matter at hand - whether they be in the firm's Orlando or Seattle office. As more firms embrace the "one-firm/many offices" concept in which geography plays a less significant role regarding the individual who may take on a given matter, this benefit is especially valuable. (The Resource Management component of the PSA system also makes it easier for firm management to go beyond the 'brick and mortar' boundaries of the firm to capture expertise of retired partners, contract resources, and departed counsel who may have specialized knowledge that could still have value for firm clients.)

A "softer" benefit of Automated Resource Management is the potential it holds for developing and maintaining talent. This facet of the PSA can give "pigeon-holed" associates a broader perspective of the spectrum of the firm's endeavors. It can also give them more visibility within the firm by providing a platform that highlights their accomplishments. The level of involvement Automated Resource Management fosters can create a more satisfying work environment.

The Larger Potential of PSAs
A number of other information challenges facing large firms today include:

• the need to provide client connectivity to both legal content and financial information relating to their specific engagements
• the need to accelerate internal/external processes (ie turn around time with invoicing and receipt of cash)
• the need to enable Knowledge Management and utilization across virtual teams
• the need to track profitability at matter level in real time

PSAs have been successfully deployed in other professional services industries (most notably IT consulting) to address these concerns. It's possible that a PSA that combines client development, resource management, engagement management, time and expense management, and project accounting can do the same for the practice of law. A vision of how a PSA might manifest itself in a large law firm environment might go like this:

The Client Development Module streamlines processes for creating RFPs by making past successful RFPs (and supporting documentation) readily available to all employees. This reduces non-billable hours that were previously spent assembling RFPs.

The Resource Management Module helps a firm locate the right attorney for the job, wherever he/she may be in the organization, and determines their availability, billing rates, etc. It also fosters creation of virtual teams, and facilitates staffing needs for new matters as they arise.

The Engagement Management Module provides a platform for collaborating upon documents and calendaring.

The Time and Expense Module permits time entry and expense entry in a realtime setting (this module can be integrated with a firm's existing time/expense system).

The Project Accounting Module provides realtime "snapshots" of firm profitability, on a matter by matter level. This enables firm management determine if further resources should be delegated to the matter at hand.

The PSA components described above are internal functions. However, law firm information contained in the PSA can be extended to key parties outside of the organization, including clients and co-counsel, using extranet technology. In this scenario, the firm controls who has access to what information.

One Firm Takes The Plunge
ILTA member Shearman and Sterling, a leading global law firm with nearly 900 attorneys, is one of the first law firms to take the PSA plunge.

"Shearman & Sterling is constantly looking for new ways to streamline operations, as smoother operations translate into better and more efficient service for our clients," said Eugene Stein, Director, Information & Professional Systems. "The PSA is attractive to us for several reasons. It will allow us to track a particular matter, deal or transaction from both a project management and project accounting standpoint. This will provide us with a valuable metric that helps us meet our client needs even better and further enhance our leading position as a global law firm. And since the PSA is a pure Internet application, it will be accessible to employees throughout our worldwide network of offices, and to attorneys when they're on the road."

Challenges of Integration
The PSA marketplace is in its nascent stages - in the non-legal as well as the legal communities. Analysts at Aberdeen Group predict that in the near-term, many enterprises will resist the migration to "another new application". However, when organizations with a mobile workforce who juggle multiple projects with multiple clients realize the benefits of the easy flow of information PSAs afford, resistance will dwindle. Closer integration between PSAs and entrenched business applications within the organization (such as legacy accounting systems) in the near-term will facilitate adoption. The extent to which the legal PSA will coordinate with existing systems - or the extent to which new independent PSA modules are developed - is still to be seen.

About our author...

Chris Santella is Senior Editor-Web Content at Niku Corporation. He writes frequently on technology topics and fly fishing, and is based in Portland, Oregon. He can be reached by e-mail at cdsantella@uswest.net.