Legal Accounts Software Migration; Will DIY Really Save Money?
When choosing software, the migration of the data can often be one of the last considerations. Data migration itself is unfortunately a “necessary evil” when switching case and practice management system providers. However, the way it is done is crucial and can significantly affect the relationship between provider and firm moving forward.
Many software companies will charge for the migration service. It is entirely reasonable to expect a charge as the work involved can be quite extensive Even if a full database is being extracted from the legacy software and dropped into the replacement, there are actions that need to be taken to ensure that all of the ends are tied together, especially from an accounts perspective.
The main sections of a data conversion in their simplest form are as follows:
- Client matters.
- Client core data (address, contact details, AML, conflict checks etc).
- Client on-system documentation and case documents.
- Client ledger history and/or current balances on client & office account.
- Client time history and/or current balance.
- Company nominal account history and/or current balances.
- Bank account balances and un-reconciled items for all accounts.
If we look at the above it is clear that a lot of work will be required to bring all these elements together.
There are different ways of handling a software migration:
- A firm can pay for the licences and then do the migration themselves.
- A firm could use an outsourced company to do the migration.
- A firm could hand over the data from the legacy software to the replacement and ask the new provider to handle the migration or,
- the firm could ask the new provider to work with an intermediary like The Law Factory to handle the transfer.
Let’s first look at the “do it yourself” (DIY) model. I have experience of firms wanting to save overhead expenditure by handling the change-over themselves. I have found it extremely rare that any saving is made using the DIY model and I generally see that it costs firms more trying to migrate everything on their own, with little or no assistance.
Time
Firstly, this is not a task which can be completed in a working day. It is going to take a significant amount of time to get it right. The basic process is set out below but there will usually be more elements to think about:
- Initially the firm need to make a decision as to the change-over date. Usually this is at the end of a posting period.
- Reports and data then need to be extracted and saved as at that date. This data needs to be checked and the reports matched off to ensure that everything balances and there are no issues before the move.
- If a firm is handling it themselves, they will then be unable to drop the dataset into the new system. They will only have the option of entering the opening balances. This will have to be done manually, after opening all the cases on the new system manually.
- Once the matters have been entered, the firm will need to create the trial balance as per the legacy system report. This includes dealing with control accounts and bank accounts.
- Next all the un-reconciled items across the bank accounts need to be added.
- They will then have to enter the time balances to ensure that each file is still showing the correct amount of WIP.
- Once all those elements have been put together, the firm will need to check that firstly the new system balances with itself, then double check that it balances with the old system’s end position.
- Once that is done, the firm will must manually upload all the documentation to the new system, case by case.
- After all this has occurred, the firm can start using the new software. It is usually at this stage that any catch-up entries are posted.
As can be seen above, there is a significant amount of work to be done if a firm decides to handle the migration by themselves.
Cost
The cost involved here can be significant, not only in chargeable time to handle everything, it will also take its toll on those who have been tasked with the migration. For example; if a partner of a firm whose rate is £200.00/hr handles this and a software company charges £1600.00 for the migration, it means that on the most basic level, the partner has to have the migration fully completed in under 8 hours before they start to lose money. Alternatively, a sole legal cashier may be tasked with the migration. If the cashier works full-time for the company, then it is highly likely that their days are already filled. Therefore, if they are tasked with a migration, everything else will need to stop to accommodate it and then they will have to catch up. This can cause an unnecessary level of stress and anxiety as the fee earners also expect all the other tasks to be handled as normal.
Accuracy
There is then the question of accuracy. This is a concern if someone who is inexperienced in migrations or accounts has been tasked with handling the change-over. Both the accounts and time-ledgers need to match the legacy software and show as being compliant moving forward as do the nominal accounts and banks. If the migration is not handled correctly, the discrepancies will be picked up by the reporting and/or managing accountants and explanations for the differences will be required. This will then increase the time and cost involved having to perform detailed investigations to find the root of the discrepancies.
Getting the most out of your software
Another element to consider is whether by doing a DIY migration the firm will get the most out of their software. As the firm will not be able to have access to the database files themselves, it is highly unlikely that they will be able to do anything but manually enter the opening balances and at best have a PDF/Excel version of the old ledgers saved to the case. Using the software company itself for the migration will mean that a full data-set can be exported from the old software and imported into the new one so that the full ledger history is shown, making it easier for firms to continue working on the new package uninterrupted. The same goes for the time records as well as the core file documentation. Being in a position where the fee-earners need to hunt for the case documents because they have not been uploaded to the new system is hugely inefficient, especially when so many are starting to work from home. This impact can then have a knock-on-effect to client services which could result in less clients wanting to use the firm meaning less turnover.
Based on the simplest aspect of the above, I do not believe that DIY migrations will save money. In fact, I believe they will cost the firm more in time, turnover, stress, and inefficiency.
Better solution
As an alternative, the firm should speak to the new provider and ensure that they can get the data that you need moved over onto the new package. The partners should invest a little bit of time at the beginning to ensure that the provider understands their requirements. For example:
- Do you want all your documents moving?
- Do you need the full ledger histories moving or are balance transfers manageable for you?
Build a relationship with your new provider so that they understand your business fully before the transfer. Then consider the provider’s migration plan against all the pitfalls of DIY outlined above.
Conclusion
I believe strongly that the new provider will be able to do the migration cheaper, quicker and with less stress on the firm. If you have someone like The Law Factory acting as intermediary to handle the data and reporting requirements for the new provider, so much the better! The partners or directors can continue managing the company, the fee-earners can continue running their files and the cashier can continue providing the vital services you need to keep your clients happy.
Alex Simons – Outsourced Accounts & New Business Manager
The Law Factory LLP
01/10/2020
