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When Baker & McKenzie makes a computer boo-boo, it can be a doozy. With 60 offices and 2,477 lawyers, the cost of computer mistakes and mishaps quickly adds up, cutting into partners’ take-home pay. Several years ago, the Chicago-based giant decided to try to tie its far-flung offices together through a computerized time-and-billing and accounting system. The idea was to create a system that would collect reams of data, package it neatly, and provide analytical tools. Before the rollout, the firm’s offices collected and reported information in a variety of ways and formats, many of them archaic. The initiative, originally slated to cost $6-9 million, was called IMPACT, short for Information Management Program And Communications Technology. So far, the only impact has been Pentagon-style cost overruns. David Yates, the firm’s global chief operating officer, said he “wouldn’t argue” with estimates that the system has actually cost $25-30 million, much of that paid to more than 100 consultants. Yates candidly admits that Baker & McKenzie’s profits per partner were depressed by IMPACT for its fiscal year ending June 30, 1999. The firm’s profits per partner fell 3.5 percent, to $485,000, in that year. Baker & McKenzie expected to have the system fully working by July 1999. But a year later, IMPACT still isn’t operating in most of the firm’s major U.S. offices, including New York and Chicago. Problems appeared early. The firm was originally planning to rely on three main software packages: Carpe Diem for time entry; Elite for billing; and Coda, a British product, for accounting. But in 1998 the firm decided to drop Coda for unspecified reasons. The introduction of the euro and the potential for Y2K computer glitches made the firm rush into the project faster than it might have normally. In this case, haste made waste. Last year, with the IMPACT project mired in troubles, Arthur Andersen evaluated it and found that the project had been poorly managed and was not close to completion. Even so, Yates sounds optimistic about the ultimate value of IMPACT, which is in use in two-thirds of its overseas offices. “This is not just an accounting system,” he stresses, noting that it will allow the firm to measure the return on its various “investments,” such as specific practice groups. In hindsight, says Yates, the firm should have tested the system in a central location, instead of installing it at several places at once. “I think we would have had better control on consultants’ costs,” he says. Baker & McKenzie’s chairman, Christine Lagarde, put a philosophical spin on the experience. “At least we were able to contribute to the learning experience of our consultants,” she says.

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