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?” Seventy-five percent 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 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, and it’s also a business. So law firm management is comprised of all the business processes that keep the firm operating. This includes marketing, finance and accounting, human resources, policies, procedures and workflow.
How do you effectively manage a law firm?
The following areas offer significant opportunities for improving effective law firm management.
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. Create marketing materials and a website that clearly articulate strength and experience in your practice area.
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 a staff, seek out CLE courses or an online or university class.
Establish Standard Operating Procedures
The key to keeping a law firm organized is to have a standard set of procedures that are understood and followed by the entire team. Your standard operating procedures will be tailored to the type of law that you practice but typically will address tasks such as 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. Document and organize the information, and make it accessible to all employees in searchable, digital form. Include a firm organization chart, all policies and procedures and a data map for the organization. Most of the time, a legal practice management software solution can help handle these operating procedures.
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.
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. If your firm operates on an hourly billing model, a practice management platform with time and billing software capabilities can save hours each week, maximize revenue and capture details to help you understand activity and productivity levels. Practice management software will enable the team to collaborate effectively, serving as a central hub as it manages projects and tasks, connecting your calendar, documents and emails to client cases. Look for a practice management platform that supports your practice area and jurisdiction. For example, intelligent calendar technology can automatically schedule critical deadlines for a matter based on the applicable federal, state and/or local court rules. 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.
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 that possible. Get assistance from a cloud-hosting provider or technology consultant to help you put together a technology strategy for your firm.
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.
Automated invoicing and payment processing software saves time, improves efficiency and reduces paper. 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.
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 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. Watch utilization rates to assure that associates and partners are maximizing billable hours. Track income by practice type or by client to understand which type of work or client generates the most revenue. Metrics offer insight on your practice and can inform your decisions on a growth strategy for your firm.
Making Law Firm Management Easier
Entrepreneur and motivational speaker Jim Rohn 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.
Does your firm meet the essential criteria for higher productivity and profit? To assess were your firm ranks in managing an efficient practice, download the free Law Firm Technology Checklist.
If you have further questions about how to effectively manage your firm using cloud strategy, security, integrations, legal practice management, and automated payment technology, give us a call at (800) 726 3339) and contact our expert team today.