A Modern Guide to Effective Law Firm Management
Who would have guessed that half the energy devoted to effectively managing a law firm has nothing to do with practicing law? In a 2020 survey, attorneys were asked,
“How many hours per week do you typically spend on work other than meeting with clients or representing clients in court?”
75% of respondents reported spending 20 hours or more per week on non-client-facing billable work such as legal research, court filings, and administrative/managerial work.
What makes a law firm successful?
Thanks to improvements in communications and new legal technology, effectively managing your law office doesn’t have to take all of your time. With a well-defined focus, the right processes, and the right technology, you can run your practice more efficiently and free up hours of time to spend on client engagement and billable activity.
A law practice is a professional services organization, but it’s also a business. So, contemporary law office management comprises all the business processes that keep the firm operating, including marketing, finance, accounting, human resources, policies, procedures, and workflow.
How do you effectively manage a law firm?
From organizational leadership to administrative work and everything in between, effective law firm management is about far more than just practicing law. There’s no one-size-fits-all solution to managing a law firm, but practicing even one of these seven habits will help your firm stand out from the crowd.
The 7 habits of highly effective law firms
1. Define and communicate your firm’s focus
Focusing on a specific practice area allows potential clients and other attorneys to recognize you as an expert in your practice area. Attorneys with a practice area focus gain valuable experience, knowledge, and a network of contacts that enable them to solve problems faster and provide a higher level of service. Whether your focus is family law, civil litigation, personal injury, or estate planning, every practice area tends to have its own vocabulary and customs, and care about different data.
Using a legal practice management system with role-based dashboards allow you to provide tailored information to individual users in your firm, so they see the things that matter most to their specific role.
2. Provide clear leadership
In a professional services firm, people are the organization’s greatest assets. As a law firm owner or partner, your role includes motivating employees and communicating the firm’s strategy, direction and values. The skills needed to be an effective people manager are learned ones: If you’re new to managing staff, seek out CLE courses or an online or university class.
Good leadership also means investing in professional development opportunities (check out these 5). This might look like offering 1:1 meetings between junior and senior associates, providing funding for courses, or sending employees to conferences.
3. Establish standard operating procedures
The key to keeping a law firm organized is to have a standard set of procedures (SOPs) that are understood and followed by the entire team. These procedures create a practice management “how-to” guide that’s unique to your firm.
Your standard operating procedures will be tailored to the type of law you pralctice, but they will typically address tasks like:
- legal case management
- new client onboarding,
- document intake and information management,
- appointment scheduling,
- document review and approval,
- time tracking,
- billing and payments,
- trial preparation, and
- archiving client files at the end of an engagement
To develop your SOP, start by documenting and organizing all relevant information, then make it accessible to all employees in a searchable, digital format. Include a firm organization chart, all policies and procedures, and a data map for the organization. If you’re struggling to manage your SOPs, a legal practice management software solution can help with automating parts of your workload.
4. Paper: organize and minimize with document automation
A paperless law firm is an achievable goal. But realistically, most of us still have to deal with incoming mail and client documents on paper. Digitize as much as possible. By scanning documents into digital formats, they can be stored within the firm’s practice management software, shared with clients on a portal site, and archived efficiently.
Already using HotDocs document automation software at your firm? Explore the integration with AbacusLaw legal practice management software.
5. Use technology to your benefit
Technology is changing the legal industry in powerful ways. From legal research, discovery, document e-filing, and virtual meetings to chatbots, technology can be a game-changer for a growing law firm.
In the 90-sec video below, we highlight three essential legal technologies to explore.
Simplify your time and billing
If your firm operates on an hourly billing model, a practice management platform with time and billing software capabilities can save you hours each week, allowing your firm to maximize revenue and capture details to help you understand activity and productivity levels.
Upgrade your calendar
Intelligent calendar technology can automatically schedule critical deadlines for a matter based on the applicable federal, state, and/or local court rules. Your firm can save even more time with a system that provides current court forms for your practice area and jurisdiction, reducing the time required to create and file documents.
Increase your referrals
Legal practice management technology can also help generate referrals, giving you and your employees valuable insight into past referrals while managing incoming opportunities in one easy-to-access place.
Did you know?
The most successful law firms are 75-90% referral-based.
Perhaps the most significant benefit of legal practice management software is seen when it comes to managing remote workers. Today, remote work is the norm, and many law firm teams will not be going back to the office. Secure cloud applications designed specifically for law firms have made remote work significantly easier, and assistance from a cloud-hosting provider or technology consultant can help you put together a comprehensive technology strategy for your firm.
A suitable legal practice management tool will enable your team to collaborate effectively, offering a central hub for managing projects and tasks and connecting your calendar, documents, and emails to client cases. When you’re on the hunt for a practice management platform, be sure to find one that supports your practice area and jurisdiction.
2022 Legal Practice Management Buyer’s Guide
Need help vetting the best legal practice management software? We can help. Download the free 2022 Legal Practice Management Buyer’s Guide today.
6. Be vigilant with finance and accounting
As with any business, accurate accounting is important for law firms. Timely billing and efficient cash management are key to profitability. Perhaps more importantly, effective accounting is critical for compliance with Rule 1.15 of the ABA’s Model Rules of Professional Conduct, outlining firm responsibilities regarding trust accounts, record-keeping and notifying clients of the receipt of funds or property.
Did you know?
When it comes to small firms, studies show that 10%-40% of clients knowingly let their legal bills go unpaid as long as possible
When combined, automated invoicing and payment processing software help firms everywhere save time, improve efficiency and reduce paper consumption. A good billing and payments solution will process all types of credit cards and e-checks, take payments from trust and operating accounts, and integrate with your practice management system.
7. Track KPIs
Most law firm leaders say they would like to add more clients, increase revenue and improve profitability. To know if your firm is on track in meeting those goals, make it a practice to gather and analyze key performance metrics on a regular basis.
Revenue and client goals are easily measured. Profit, calculated as total revenue less total expenses for a given period, can be improved on either side of the equation: increase revenue or reduce costs by automating manual tasks.
In addition to measuring profit, analyze utilization rates to assure that associates and partners are maximizing billable hours. Track income by practice type (or by client) to gain deeper insight into which type of work or client generates the most revenue. These metrics offer insight on your practice and can inform your decisions on a growth strategy for your firm, setting you up for future success.
Making law firm management easier
Entrepreneur and motivational speaker Jim Rohn once said:
“Success is a few simple disciplines repeated every day. Highly successful people learn continuously, anticipate and plan for the future, communicate proactively and are willing to try new things – whether adopting new technology or taking an accounting course – to reach their goals.”
If you have further questions about effective law firm management, including using cloud strategy, information security, integrations, or automated payment technology, give us a call at (800)-726-3339 or contact us online to talk with our expert team today.