Get a Free Demo
Implementation can be split into three separate buckets: data migration, setup and configuration, and training.
When it comes to implementation, vendors may make a wide range of promises. But what they are actually prepared to do for you may be more limited. You need to understand the different levels of detail offered with each facet of implementation when it comes time to determine what is best for your firm.
Data migration is the process of taking all of your client and firm data from your previous software and moving it to your new software. This can include everything from client data, calendars, and documents to billing and accounting data.
To help convince you to sign with them, some software vendors will try to entice you by offering a free basic data migration. This type of migration is performed using a preconfigured wizard and does not include custom fields or billing data. You won’t end up with all of your information in the new system and you will likely have to go back and clean up some data. But if you’re trying to save money and these drawbacks don’t bother you, this is a great option.
However, if you have over 10 employees and you’ll be billing out of your new software, there is a good chance you’ll need an advanced conversion that requires a conversion specialist.
The software company may offer advanced conversion in-house or may require a certified partner. An advanced conversion will include all of your client information along with some level of billing data, including billed time entries, billed expense entries, bills, payments, credits, and trust transactions.
The bottom line: You’ll want to get a feel from the vendor regarding the level of data conversion they’ll provide, and at what cost.
Setup and configuration costs depend on how much you’re trying to customize the software. Some legal practice management software programs offer in-depth customization while others limit you to more static offerings. Some customizable areas include form layouts, custom fields, reports, workflows, and bill layouts.
Unlike data migration, this is an area you can get away with spending less at first if you need to save money. You can always configure the software gradually as time goes on and needs arise. Take the time to map out your goals for your new software in order to figure out what needs to be done right away and what can wait.
Training is essential to successful adoption, end of the story. And you guessed it, good training usually comes with a price tag. When software vendors promise free training, it is extremely limited in nature. You won’t be able to choose when the trainer comes in and you may be stuck with the trainer even if they’re not a good fit for your team. The training may also be as basic as previously recorded training videos.
Approaching training the right way can help ensure you get the most out of your technology investment.
Change can be hard; that’s not a new fact. When it comes to new technology at your firm, change can trigger a whole host of negative feelings among staff, but it doesn’t have to be such a pain point.
One aspect of new technology that seems to be met with overwhelming resistance is training. If you can foster a mindset that training is one piece of a holistic project vs. an unavoidable burden, you can set your firm up for success on your new system. Proper training bridges the gap between the promise of a good purchase and the reality of successful integration.
Let’s look at five key elements of a training program that can help you get the most out of your technology investment.
First and foremost, the leaders in a firm need to be advocates for the training. Partners and firm administrators know exactly what they want to achieve with the software, and that information should always travel from the top down. Overall success can largely be controlled by the expectations that upper management sets early on.
Firms can choose to structure training sessions in a variety of ways. For firms looking to adopt best practices for a new cloud-based management system, instructor-led training and group discussion are both ideal types of training.
The hope for any training program is that your staff retains what they learn. Studies show that if a training session surpasses one hour, we retain less than half of the total information presented. The best way to combat this is to break your training into bite-sized sessions. Avoid trying to teach everything all at once or you can guarantee that your staff’s retention will be less than noteworthy.
Organize training sessions by content and associated roles. The best way to maximize engagement is to provide training material that is relevant to the work each person is expected to produce. Don’t force your administrative assistants to sit through training about accounting unless their roles involve that aspect of the software in some way.
A great strategy for keeping the information in your training relevant is to include your firm’s own data in the sessions. You can combat the foreign nature of the new software with the familiarity of known data. When new users see the information they already know in place, it supports their ability to grasp the concepts you’re teaching faster.
Once you get past the initial training sessions, you may be fooled into thinking the most important part is over. Alas, reinforcing that information is just as crucial to ensuring everyone is using the software correctly, avoiding bad habits, and maximizing the potential of your investment.
Simple steps – like hosting a Q&A session once a week or providing a resource library with videos and guides – will go a long way in preparing your team for issues down the road. Review best practices regularly and streamline supplemental sessions to focus on specific questions to improve adoption time and reduce instances of user error in the future.
You want your law firm to thrive, not just survive. Profitability management is the best way to ensure that your firm stays at the top of its game both in the short- and long-term.
But increasing profitability is no small task. It requires a complete understanding of your law firm’s current performance in all of its functions with an eye toward the future. Profitability fine-tuning will help your law firm figure out how to bring the most effective combination of resources together to address clients’ needs and to do it at the right price.
In this blog, we’ll cover how you can raise your firm’s bottom line, including steps you can take and how technology can lend you a hand. But first, let’s review the basic concepts behind law firm profitability.
Profit and revenue are different. You know this, and we know this. Yet the terms are always conflated when it comes to law firms. While boosting your firm’s revenue through things like lead generation is great for short-term growth and can lead to an increased profit over time, increasing your firm’s net profit is the only sure way to be successful in the long term.
Think about law firm profitability in simple terms. Revenue is the money your firm receives from clients for legal services rendered. The matter cost is just that: the cost to your law firm in connection with a matter, including attorney and staff time and client costs paid. You subtract matter costs from revenue to get your firm’s gross profit.
Revenue – Matter Cost = Gross Profit
But we’re not done yet! To figure out your law firm’s net profit, you must also subtract overhead costs such as office space, supplies, attorney bar fees, and the like.
Gross Profit – Overhead = Net Profit
If your law firm is increasing revenue without increasing net profit, it means you have room for improvement. For example, your firm might acquire new clients and thus have increased monthly revenue. But if your firm also needs to hire new lawyers and paralegals to deliver client service and expand office space to house them, your profit margin might not be as high as you expected. The key to increasing net profit is a balancing act: maximizing revenue and minimizing unnecessary costs.
Measuring profitability requires taking full stock of your law firm: the good, the bad, and the unprofitable. As Covid-19 continues to loom and the market remains unstable, measuring profitability and setting a clear path forward is more important than ever. Your firm needs to measure in order to manage. Below are some key metrics for your firm to track and consider.
You already know the virtues of monitoring your law firm’s key performance indicators (KPIs). KPIs reflect your firm’s success in achieving certain goals with forward-thinking data collection used to analyze productivity. Monitoring KPIs keeps your firm accountable to itself. This valuable information allows your firm’s management to make informed decisions on hourly rates, hiring, and expansion.
When it comes directly to profitability, tracking certain KPIs like utilization and realization rates is important. You calculate utilization by dividing the total billable hours of a timekeeper by their total working hours. This percentage is subject to fluctuation throughout the year based on workload. While monthly tracking is a best practice, yearly tracking might prove a more useful metric for employment and bonus considerations.
You calculate realization by dividing the total number of billable hours invoiced by the number of billable hours worked. Essentially, realization rates measure the difference between recorded time and the percentage of that time paid by clients. This measure is an accurate indicator of your law firm’s profitability. For example, if you billed a client for 20 hours of work and the client only paid for 10 hours, your work realization was only 50% (and it’s probably time to set up a call with this client to discuss payment).
While tracking KPIs is important to making informed decisions, manual tracking is time-consuming and subject to human error. Instead, we suggest using the wonders of tech and reporting tools to give your firm the metrics it needs and to help your legal professionals track their billable time.
A simple and direct way to boost profitability is to limit your attorneys’ nonbillable hours. Some non-billable time is unavoidable, but much of it can be outsourced and given to non-attorney staff as part of their normal workload.
Delegation is a key management skill. Encouraging your junior lawyers to delegate their nonbillable tasks is a great way to help them build their skills so that they can focus their time, energy, and efforts on billable legal work. Having your timekeepers focus on high-value work will benefit your firm’s profitability.
Positive cash flow is important to keep your firm afloat. Thankfully, it can be managed with forethought and planning. Assessing your law firm’s financial health is the first step. Consider your firm’s overhead costs like fixed expenses (e.g., rent and utilities) and fluctuating costs (e.g., payroll) and determine any opportunities to reduce those expenses.
It’s also important to project your firm’s expected client revenue in both the short- and long-term. These steps should be followed by establishing a data-driven cash flow forecast. With the right practice management software, you’ll quickly generate billing and accounting reports so you can understand your incoming receivables, study where you’re making and losing money, and compare your firm’s cash flow over time.
Another way to increase profitability is to get paid. But it’s not that simple, right? We all know that billing and collections are often among the most dreaded aspects of operating a law firm.
One way to ease the frustration is to make it easier for clients to pay you by setting up a system that accepts different payment options, including online payments, to streamline your firm’s invoicing and collection processes. Following up on unpaid invoices is also necessary. Your firm did the work and deserves to be compensated properly for it. By improving your firm’s collections process, you’ll also boost profitability.
This article's central question is how to increase your law firm’s profitability. There are many ways to start the process, but the best way is to do so intelligently. The most profitable firms in the legal industry are the ones that keep tabs on their key metrics and use data to drive their decision-making. Here are a few things to think about and ways to get started with maximizing your firm’s profitability.
Reducing expenses is a simple place to start. Begin with reviewing your law firm’s spending over the last quarter. Are there things (e.g., subscriptions or online services) your firm is paying for that you aren’t using or that you could live without? With the increase in work-from-home arrangements, it might be that your firm can give up some office space, and hopefully, your firm is also using the right integrations and tech to free up cabinet space. Another way to reduce monthly expenses is to require clients to pay filing fees in advance. This frees up cash for you and means less waiting to get reimbursed. By reducing overhead, your firm will directly increase net profit.
We discussed KPIs above, but there is much more to financial and productivity reports for legal practices. With the right reporting tools, you can drill into how your attorneys and staff use their time and predict future billing based on historical data. Your law firm should generate and review attorney productivity reports a few times a year and certainly in connection with performance evaluations. Regular monitoring of this information will allow your firm’s management to identify problems along the way rather than waiting until the end of the year or when the issue boils over.
Monthly productivity reporting is also helpful for tracking matter timelines. With this information at your fingertips, your firm can identify matters that have been sitting stagnant in every practice area, address the causes of the delay, and rectify the issue while also strengthening the client relationship.
Your lawyers are your firm’s biggest asset. The more efficiently they bill, the higher your firm’s profitability. Removing any hurdles to billing and promoting best billing practices will serve your firm’s bottom line. Concurrent timekeeping is key. Your law firm should encourage its attorneys and staff to enter time daily and release monthly or as otherwise required. At the end of a billing cycle, your law firm should review its billing processes to evaluate the timeliness of entries and submission of the bill to the client. With regular evaluations, your administrators can fine-tune your firm’s billing procedures to maximize the timely receipt of payments, increasing client satisfaction and reducing the risk of write-offs.
Using tools and legal tech can transform a law practice’s net profitability. Tech can help keep costs low through workflow and document automation, which frees up your lawyers and staff to work on billable matters to bring in more revenue. The right legal tech will help your firm simplify nonbillable tasks like client intake, practice management, billing and collections, and time tracking.
With more time for billable work, your firm can raise its revenues. And with the right tech that offers a streamlined experience and integrations, your firm will minimize its use of subscription services and administrative time and thus minimize your overhead costs. The result is the perfect recipe for increased profitability.
Lead generation: it’s the lifeblood of your law firm, whether you have a solo practice or are part of a major global firm. We understand that this might be a strange concept. After all, you didn’t go to law school to run a marketing agency on the side. And you certainly don’t specialize in sales tactics.
But hear us out. The only way to serve clients is to first recruit them, and lead generation is your firm’s best bet to acquire new clients.
Like most other aspects of modern life, law firm marketing happens online now. To compete in and win the legal marketing game, your firm needs to know how to generate leads from online sources. A reliable lead generation pipeline is as important to your firm’s growth as expanding its legal expertise.
Having a business development plan that includes digital marketing strategies to generate and capitalize on leads is how you can set your firm on a path that leads to sustainable growth. The good news is that lead generation is something that technology and the right team can help you with — without blowing your marketing budget.
Let’s get started by discussing what we mean when we say “lead generation.”
In the simplest terms, a lead is a potential client. A lead is a person or a business that can benefit from your firm’s legal services and that is willing to pay for those services.
The way the definition of lead narrows from there will be specific to your law firm and its needs. Maybe it’s someone who clicks on your paid advertisement, a company that signs up for your firm’s monthly newsletters, or traffic to a legal blog post showcasing your firm’s expertise.
When we use the term “generate a lead,” we simply mean catching a potential client’s attention. The next steps of turning that attention into actualization and a brand-new client for your firm is where the growth happens. But don’t put the cart before the horse. Knowing how to generate leads and creating a concrete strategy comes first.
We’ll start with common lead generation strategies for lawyers, then we’ll get into the nitty-gritty of how you can apply these strategies.
The application of lead generation to the legal industry isn’t that different from other industries. It all starts with awareness and relies on high-quality content to reel in potential clients.
Lead generation is the process of piquing interest and finding potential clients — and it all begins at the top of the sales funnel. The sales funnel guides your firm’s leads through their decision-making process before they select a law firm (and hopefully it guides them right to your office).
There are some basic phrases in a sales funnel and lead generation pipeline, which we break down below.
This is more existential than we usually get, but the world needs to know you exist. Brand awareness is key, and unfortunately, it’s not as simple as just yelling into the void.
Building awareness involves improving your law firm’s search rankings through search engine optimization, developing an interesting and user-friendly website design, having a social media presence, and creating content. By maximizing the ways that your firm can be discovered by internet searchers, either organically or through paid advertisements, you’ll also start to optimize the number of leads that you generate.
Now that your lead is aware of your law firm, the second step is to keep their interest. Accessibility and content are critical here. The longer website visitors stay on your firm’s website, the more they learn about what your firm can offer, and the more likely they are to contact you.
We recommend having a well-structured, welcoming website and regular blog posts showcasing your firm’s expertise to attract your target audience.
Congratulations, you now have your lead’s attention! This is the part of the sales funnel where your prospective client decides whether to use your firm’s services.
Your part in the decision-making process is demonstrating everything your law firm has to offer, including your first-class lawyers, subject area expertise, and client-oriented service. Your website should include all of this information and more to coax your lead into saying a resounding “yes.”
This is the part of the sales funnel where new leads initiate contact. This initial contact might look different for each law firm. However, it usually includes the lead filling out an online form with their information, calling to schedule a free consultation, or reaching out for more information about your firm’s services. Make sure your website offers different options for initiating contact; some people prefer an online form to a phone call or vice versa.
Lead generation protects your firm’s financial health, ensuring that the sales funnel is regularly replenished with new inquiries and therefore potential for growth. Your firm has a lot that it can actively do to make sure it’s putting its best foot forward with lead generation.
Without a lead generation strategy, your firm will likely rely on referrals and word-of-mouth to grow. You can do better! Below are some common lead strategies that your firm can use to get started.
We cannot stress how important your firm’s website is to generating leads and converting those leads into paying clients. As discussed above, your website is pivotal to establishing your firm’s brand. You want your website to be polished, professional, and user-friendly. It should also be compatible with both mobile devices and desktops.
Your firm’s website must be personal. Potential clients love to review attorney bios, so make sure those are drafted consistently and highlight the expertise and experience of your lawyers. We also recommend including positive case results and client testimonials on your website so leads can better understand what makes your law firm stand out.
Your website should include high-resolution and high-quality photos, and the headshots of your lawyers should be consistent and professional. Your firm is unique, and your website should showcase that.
Email marketing is another useful tool to help your firm generate quality leads. To begin, your law firm will need to build an emailing list. We recommend that you start in one of two ways (or both!).
The first is to offer a weekly or monthly newsletter free of charge. You’ll collect email addresses from prospective clients this way while getting the opportunity to directly share your firm’s expertise and wins with those clients.
The second is to build lead magnets that visitors can download directly from your firm’s website. Lead magnets are a free item or service given away to gather a web visitor’s contact information, including their email address and phone number. Popular resources that are worth exchanging emails and digits for include white papers, guidebooks, and access to webinars. The lead gets the valuable resource, while you get their contact information.
Once your firm has built a solid email list, you can follow up with current and prospective legal clients. The emails to your mailing list should be targeted and focus on the services your firm can offer and how those services solve problems for your clients.
Your law firm must also have a polished and engaging portfolio on social media, particularly on Facebook, Google Business Profile, and LinkedIn. Contacting a lawyer can be intimidating for a prospective client, and social media can help you close that gap. In addition, with a solid social media presence, your law firm can market its expertise while building stronger community relationships by engaging directly with leads or current clients.
Your firm can purchase paid advertisements (discussed in more detail below) or use organic advertisements posted to your firm’s own page. Social media is the best way to show how unique and personal your law firm is, a key component in building reputation and trust with your audience. Social media posts should be interesting, visually appealing, and link directly to your firm’s website to capture any leads. Social media is also the place where your law firm can have a bit of fun — for example, you can conduct polls or host Q&As with the community. It’s the ideal platform for community engagement and the humanization of your lawyers and firm.
To build a long-lasting online presence, your firm needs to integrate content marketing into its overall business strategy. A sound content marketing strategy will generate leads and boost your law firm’s search engine rankings.
The best way to start is by asking what questions your legal leads may have. Then create regular content addressing those questions for your target audience, such as blog posts on subject matter where your firm has expertise or a webinar on a developing area of law. As discussed above, these lead magnets are a great resource for growing your firm’s contact list and reputation.
You’ll also want to build landing pages, which are web pages created for specific marketing campaigns. Landing pages have a single goal: converting visitors into prospects. A visitor arrives at a landing page most often after they click on a link in an email or in an ad from a search engine or social media.
To be effective, your landing page copy has to be persuasive and centered around getting your visitor to take a specific action. Say, for example, that you want to set up a landing page promoting a particular practice area. You could advertise your lawyers’ personal injury expertise by offering a downloadable guide explaining the steps a plaintiff should take if they’ve been involved in a car accident.
The content your firm produces should, of course, be legally sound and helpful, but it should also be optimized for search engines. Creating a content generation strategy that answers clients’ common questions ensures that prospects find your website. Including dynamic, relevant call-to-action (CTA) buttons like “contact us now” or “click here for more information on how to file” make it easy for visitors to follow through to the next step and contact your firm.
Search engine optimization (SEO) improves your firm’s website to boost its online visibility in search engines. Google and other search engine result pages show the top results of a user’s search based on the content of your webpage. The more relevant your content is to the Google search, the more likely that your content will appear at the top of a Google search page.
SEO is also measured by the quality of your law firm’s website. Quality takes into consideration things like your site’s layout, accessibility, keywords, the quality and quantity of web traffic to your website, backlinks, and even the quality of your content. Yes, that means that Google, like your high school English teacher, is judging your grammar and syntax and assigning you a grade.
Considering and improving these SEO components will increase your firm’s overall SEO, leading to increased searchability and visibility and therefore increasing the quality of your leads.
Local SEO is also an essential marketing strategy. Your law firm likely has an ideal geographical area that it wants to generate leads from. Optimizing your firm’s Google Maps and Google My Business presence can help establish your firm as the reputable, go-to law firm in the community.
Paid search campaigns are a great tool to enhance your law firm’s visibility. There are three main types of paid advertising: pay per click, pay per lead, and Google’s Local Services ads.
With PPC advertising, your law firm pays for the number of clicks it receives. Your ad pops up on the platform (search engine, social media, or another website), someone clicks the ad, and then your firm pays for the click.
It seems simple, but getting the best results requires a sound strategy and regular re-evaluation of that strategy. You’ll need to research and pick the right keywords and platform to host your ad, organize those keywords into ad groups, and then link to the right portions of your website to hook the lead quickly. As with your website, ad design and copy are also important.
As the name suggests, with PPL advertising, the amount your law firm pays for an ad depends on the number of leads acquired. Usually, with a PPL agreement, your law firm will set the parameters of what constitutes a lead and only pay when those specific requirements are met.
PPL is generally quantified by the number of leads who provide their contact information — think of the call to action, lead magnets, or newsletters discussed throughout this article. PPL advertising is a particularly good option for solo practitioners or small law firms that want to grow their law practice but don’t yet have the capacity to open the floodgates to many new clients.
Local Services ads are Google’s first PPL program. With Local Services ads, your law firm can connect with people who search on Google for the services your firm offers. Your firm’s ad will show up for these customers in your geographic area. Similar to standard PPL, your law firm will only pay if the lead calls or messages directly through the advertisement.
These Google ads are relatively new and require multi-step verification. As with other advertisement strategies, Local Services ads should be optimized to showcase your law firm’s expertise.
The legal market is booming. To stay at the top of the heap, your law firm needs an online advertising strategy complete with a well-considered lead generation process. By implementing tactics to improve your firm’s visibility, including building out your website using SEO and stepping up your social media and content marketing efforts, you can start getting the word out on just how great your law firm is and begin attracting more qualified leads.
The prospect of taking on lead generation can be daunting. But you don’t have to be an online marketing expert to build a pipeline of leads. The right tools and solutions, including lead generation services, will help you get off to a fast start and accelerate your lead conversion rate in no time.
Your law firm cares about its clients. Retaining information for those clients while keeping matters organized and accessible is critical to providing optimal client service and maximizing billable time.
But client management is often a nightmare for law firms. We both know that keeping hard-copy records is an inefficient use of time and space. Plus, you never can find what you need just when you need it. And setting up an individual spreadsheet for each new client can prove tedious and frustrating.
Enter client relationship management (CRM) software (also known as “customer relationship management” software outside the legal industry).
CRM systems can help your law firm create a client-focused environment where your clients feel valued — while your firm reaps other benefits. Through organization and enhanced efficiency, CRM software helps your law firm maintain and strengthen business relationships. CRMs can help you keep your eye on the prize by prioritizing clients and ensuring that no growth opportunity goes unnoticed.
But it can be hard to decide which CRM is right for you. Multiple law firm CRM options are available today in the market. Below, we’ll guide you through what to consider as you evaluate the best solution for your law practice.
Put simply, CRM software helps law firms manage wide-ranging business development functions. These functions include client intake, client scheduling, and follow-up, automated marketing tasks such as email campaigns and reminders, revenue tracking, and workflow simplification. The right CRM software can help your law firm systemize its approach to maintaining client relationships. It’s a critical piece of your overall marketing plan and, in turn, essential to your bottom line.
In sum, CRM software can help your firm turn potential clients into retained ones while also helping you strengthen relationships with current clients. Think of it as a magical Rolodex.
You never get a second chance to make a first impression. For your law firm, intake is the first communication with a client and the perfect opportunity to impress with your firm’s client-centered approach. As you already know, legal practice management software streamlines procedures like client intake forms and onboarding new clients. Consider a CRM as another piece of this efficiency pie.
A pivotal part of growing your firm is understanding the client lifecycle. With this knowledge, your law firm can personalize and systematize each step within that lifecycle, maximizing efficiency and profit. This is where CRM software excels.
CRM software can help your law firm streamline the intake process, including client communications and correspondence, document exchange, internal data sharing, and even processing bills. You’ll eliminate duplicative tasks, have more time to do substantive legal work, and ensure that your first impression is flawless.
An improved intake process and the right integrated tools can help your law firm start working on a matter as soon as possible. These, combined with CRM software, will provide your clients with the best possible experience.
It’s easy to get started with a CRM. The first step in getting oriented is understanding which CRM best suits your firm’s needs.
Take some time to consider where your firm’s biggest inefficiencies are and where you see the most growth potential. The right CRM solution can help with efficiency while also helping your firm grow. Then consider these four options.
When conducting your research, you’re likely to find there are endless CRM options. We recommend taking your time and thinking about your law firm’s needs (including its budget) and how CRM software can meet those needs.
Be sure to consider which CRM best supports your legal practice. For example, Salesforce is an immensely popular CRM across all industries. But Salesforce might offer more features than you need if you’re a smaller or midsize law firm. And if you’re still exploring your technology options, you may think a solution like QuickBooks is all you need because it stores your clients’ information. But it doesn’t do anything to manage your client pipeline.
Here are five options that you should consider.
HubSpot is one of the legal field’s most popular CRMs. It’s free and useful, and if your firm grows in the future, HubSpot can also support expanded operations and needs. HubSpot allows your firm to track social media hits and interactions. It also offers valuable workflow functionality, including marketing tools such as email automation and scheduling follow-up emails based on website hits. HubSpot will provide your firm centralized access to important client insights and assist in better managing your sales pipeline.
InTapp is a CRM solution built for the corporate world. It’s used by many of the biggest and most prestigious law firms. With Microsoft, email marketing, and billing system integrations, it has much to offer midsized and small law firms looking to up their game. InTapp also offers social media functions and various mobile apps to allow your lawyers to stay connected and bill on time.
InterAction is LexisNexis’s CRM software that turns your firm’s contacts into business opportunities with client contact management and data collection. InterAction focuses on building client relations and generating leads through easy-to-use CRM applications that leverage client data. With its comprehensive approach to data control and quality, InterAction also helps your firm create a more efficient workflow that will help it develop opportunities for growth.
Lawmatics is another law-focused CRM software. It offers solutions by practice size, so whether you’re a solo practitioner or a small, medium, or large law firm, Lawmatics has software designed to help your firm thrive. This CRM includes many basics you would expect, like enhanced automation options and customizable emails to help with marketing campaigns. It also offers graphic-forward systems, including a pipeline management system to track the nitty-gritty of client acquisition, advanced custom fields to capture comprehensive client information, and a built-in suite for e-signatures.
Law Ruler is a CRM solution that collects and organizes information about a law firm’s leads, prospects, and current clients. It includes marketing automation tools, including personalized emails and text messaging for lead nurturing. It also supports client intake with custom form building and templates. It rounds out its offering with a robust set of analytics and customizable reports.
Any of the CRM tools mentioned above can help your law firm optimize and streamline daily operations while keeping an eye on your growth. Coupled with an improved intake process and the right integrated client management tools, your law firm can spend more time focusing on its top priority: serving clients.
The right combination of legal software, including CRMs, case management software, document management systems, and invoicing solutions, can help your law firm give clients the best possible experience. The key to ensuring use is integrating your systems as much as possible, reducing the administrative burden on your lawyers and your clients. Look for a CRM tool that works with your firm’s existing legal technology suite, and you’ll reduce implementation and adoption headaches.
Recently, we wrote a blog about the timekeeping, billing, and accounting features you may want from your legal practice management solution.
However, those requirements likely don’t include anything related to calendaring and task management, document and email management, workflows and automation, or communication tools.
When evaluating new technology, you should also think about your firm’s day-to-day operations and how those procedures lend themselves to your practice management software requirements.
A practice management system creates a hub for the entire firm to find information about your cases, which makes you more efficient and allows you to provide better client services, answer questions faster, and gain a better grasp of your data.
Practice management is a feature-rich component of legal technology with two overarching features: calendaring/task management and document/email management.
Calendaring. It seems so simple – trivial even. Yet nothing is more critical to your firm’s day-to-day operations than an accurate and up-to-date calendar.
Practice management software gives you a centralized calendar that is backed up and allows you to choose from multiple views along with a matter-centric view. You can even create workflows and automated tasks that are built into each calendar view. This is great for collaborative firms or those that have a heavy workload and need help juggling a multitude of tasks.
All of this sounds great, right? But how does it fit within the complete picture of your firm? Start by asking yourself these questions:
One of the major benefits to a firm-wide calendar is that you can see everybody’s calendar and schedule multiple events with several attendees all at once, or select only the peoples’ calendars you need to see – no more having to do it manually one at a time.
The point of task management is to make it easy for your managing attorneys to check the progress of their cases. How easy is it for them to do this now? Can they see at a glance what has or hasn't been completed? The goal of any task management platform is to be able to present an overview of where any case stands at any given point in time.
Essentially, you have two options: You can either go with practice management software or you can use an integration dedicated to document management. When you’re evaluating document management, you need to look at a few things:
Storage is another important factor. How big is your drive now? How much would it cost for additional storage? These are the things you need to evaluate when thinking about document management systems.
Email management is a related priority. Some practice management systems let you save emails directly from Outlook or Gmail into the system itself. If you’re planning on going this route, how easy is it to do so?
Once you have learned how saving emails works within the system, the next step is to ask how the system will store the emails you save. Is it making copies of the emails or simply linking to them? Is it converting them?
Workflow itself is defined as the sequence of processes through which a piece of work passes from initiation to completion. For many law firms, finding tools to free up more time to bill is essential to growing their practice.
Essentially, workflow brings process and automation together. Workflow takes a process, adds highly defined inputs and outputs, and uses automation to complete the tasks on your behalf.
For example, a client fills out a form on the website which triggers a potential client record to be populated in the database. Once a new record is created in the database, an email is automatically generated and sent to the prospective client letting them know someone from the firm will be in touch. Then, a task is created and assigned to the firm administrator to contact the potential client. And there you have it, workflow in a nutshell.
For many law firms, workflow can be a game-changer by creating structure and efficiencies within their practice. Additionally, workflow can free up time to bill, keep your database clean, and speed up the onboarding of staff.
As important as it is to maintain thorough internal communication, it is just as essential to be able to communicate externally with your clients. Does your current system allow you to text and call your clients? Does it track and record the time you spend communicating with those clients?
Client portals have become a standard feature that your future clients expect. What does your client service like now? Does your team lose billable hours answering questions that could easily be answered through a client portal? Do you give your clients the autonomy to pull the answers they need on their own or do they still rely on getting in contact with you?
In order to improve client communication and create a client-centric approach to your day-to-day tasks, prioritize file storage and data security to promote a seamless, positive experience that clients will recommend to others.
Another make-or-break process for client satisfaction is the intake process. The client intake process looks different from firm to firm, but at its core, you need to be able to track data efficiently and access it whenever you need it, from wherever you are.
Your practice management software should help facilitate:
A huge part of the client intake process is cultivating the relationships that are most fruitful for your firm and tracking the progress that comes from those leads. The ability to pull lists and reports on current and potential new clients is paramount to your firm’s growth.
“Do more with less.” This oxymoron of a saying seems to imply that lawyers have a Costco-like quality; there’s always a way that they can commoditize their work and charge less for it. This concept is anathema to the legal industry.
So, while clients have expectations that lawyers should deliver more and more value to them, meeting those expectations can seem impossible to a law firm with traditional staffing structures, billing protocols, and technology.
The good news is that there is a way to accomplish the same legal work more efficiently: by building disciplined, repeatable legal processes that you can apply to every matter to keep budgets and workflows in check. This process improvement, in a nutshell, is legal project management (sometimes abbreviated as LPM).
Legal project management is the “application of project management principles and practices to enhance the delivery of legal services,” according to the International Institute of Legal Project Management. Susan Raridon Lambreth, the chair and founder of the LPM Institute and the founder and chair of the LawVision Group, suggests, “LPM is what lawyers already do, just more systematically and using the language of business.” (For more of Lambreth’s insights, check out The Power of Legal Project Management: A Practical Handbook, published by the ABA.)
To put it more simply, legal project management is a structured way to manage legal projects based on consistent, repeatable processes. A “project” is the creation of a product or result with a finite beginning and end. For example, a project may be a lawsuit, a merger or acquisition, a regulatory filing, an investigation, or a contract.
Typically, the project management process consists of five steps.
In this initial stage of project management, you identify the goals of the project, which will serve as the guiding star for all of your work. So, during intake, you’ll need to gather information from your client to understand their expectations for your work. You’ll also assign the primary lawyer or other person serving as the project manager for the matter.
When the scope is clearly defined, you can better set the initiative’s milestones, timeline, budget, and staffing. You should also clarify with the client what the deliverables will be.
With the project’s goals firmly established, you can define which tasks and activities you need to accomplish to achieve your desired outcome. Start by dividing the project into phases punctuated by milestones. Then you break down each phase into specific tasks and activities. Finally, you prioritize and schedule the tasks.
The schedule should be detailed, setting the starting and ending dates for each task and for the entire project. Work backward to develop the schedule from the deadline or due date for the project.
This step is when you also assign the work to the appropriate people, whether lawyers, paralegals, support staff, or third-party providers. If your deadline is tight, you might need to retain additional personnel. A checklist for types of work that should be outsourced can accelerate this process. Once you’ve chosen your team members, clarify the responsibilities of everyone assigned to the project.
Finally, set the overall budget using estimated costs for each task and activity. Be sure to get quotes from any third-party vendors when developing the budget to avoid surprises on the back end.
Once you’ve created a project plan, you can use it as a template and checklist for future projects.
Kick-off the project with an initial meeting that reviews the expectations of every legal team member as well as the timeline and budget. Thereafter, set a regular cadence of meetings to check in on the project’s progress. The frequency of meetings depends on your deadline: you’ll meet more frequently for urgent projects with a short fuse and weekly or monthly for longer-term projects.
At each meeting, the project manager should review the team’s progress against the project plan. But you’ll need to do more than review the project’s status. It’s also critical to review key performance indicators to make sure the project is on time and on budget. For example, you may want to run a budget-to-variance report to understand whether spending is on track.
You’ll also need to monitor the project for any risks to its progress. For instance, you might identify bottlenecks in your processes that you need to resolve or other issues that might cause delay.
If any changes in scope, schedule, budget, or people are necessary, you’ll need to revisit the project plan. Often, new information will surface and require adjustments, considering their effect on downstream activities and tasks. If the changes necessitate pushing back the timeline, you should communicate the adjustments to your team, client, and other stakeholders immediately.
When you’ve achieved your goal, you aren’t done yet. Review the final product with your client and receive their feedback. Their input will be invaluable if you’ll be completing similar projects in the future.
This is also the time to share any lessons learned with your team. You may need to adjust the timing or scheduling of activities in the future. If you had to adjust budgets and responsibilities midstream, make a note for future projects. Consider what went well and what didn’t, how accurate your original project plan was, and how well the team worked together.
Legal project managers take full responsibility for planning, managing, and executing legal projects. They have day-to-day oversight of the entire project plan, from personnel to budgets to schedules.
Accordingly, project managers really need a special closet to house all of the hats they wear! Here are just a few examples of the work they do:
Most law firms don’t have the budget to hire a project management professional. Instead, they may bring in a specialist to lead a legal project management training session for their team, then assign a lawyer or paralegal with project management skills to handle projects.
Legal project management can deliver a host of benefits for both clients and law firms.
On the client-side, more matters conclude on time and on budget. Throughout the project, there is greater transparency, so clients can jump in to address the course of a project and ensure legal spending stays in check. There are also fewer surprises for clients at the end of projects.
For law firms, the benefits include these and many more:
Implementing legal project management can seem like a heavy lift — especially for a profession that’s change-averse. But it’s easy to start implementing project plans, templates, and checklists for recurring types of projects.
For example, law firms that handle mergers and acquisitions can likely develop a series of checklists and tools that prepare legal teams for every transaction. The team can develop a task list to ensure nothing falls through the cracks if they’re handling an acquisition. They can also create a template for a kickoff meeting agenda to ensure they touch on every important topic for the project team, from deal documents to timetables and communication protocols. Finally, they can use a post-mortem checklist after the deal closes to debrief, capture lessons learned, and improve the process for next time.
Litigation matters are also a good way to start testing out legal management principles. Law firms that have agreed to alternative fee arrangements can apply legal project management principles to ensure they adhere to their budget. Firms can use checklists for e-discovery processes, including data identification and collection, to make sure that no stone is left unturned. They can also use project management tools to assign the right level of resources, whether attorneys or paralegals, to the right task to deliver high-quality legal work products.
Legal practice management is complex. Fortunately, legal practice management software has features built right in that are designed to tackle much of the work of project managers.
Through proactive planning, risk management, budgeting, and resource allocation, legal project management helps law firms streamline the work they do on legal matters. Applying disciplined legal project management also helps lawyers build greater consistency around law firm processes, which, in turn, delivers greater predictability, meeting client expectations regarding cost and experience. Combine these benefits of legal project management with technology, and lawyers can achieve their growth and client satisfaction goals faster and with less effort than ever before.
When evaluating new technology, you should start with thinking more about your firm’s day-to-day operations and how those procedures lend themselves to your requirements.
You’re probably constantly in the process of putting together a requirements list to include certain solutions, but let’s dig a little deeper into the questions you should be asking to ensure you’re getting the features you want from your legal practice management software solution.
Legal software should make timekeeping as easy as possible, so make sure that any software you’re considering has an intuitive interface. Next, you need to think about whether the new system meets your rounding requirements. Some firms bill in quarter-hour increments, while others bill by every one-tenth of an hour. These details need to be communicated and understood prior to diving into the rest of your timekeeping requirements.
Let’s start with the basic questions:
Some systems make you manually enter in everyone’s rates at the start of a new matter, while others let you create and assign those rate tables as you go. With that in mind, additional questions to consider include:
It’s not a secret that no two clients are alike; the same is true for their billing needs. Being able to accommodate clients’ finances doesn’t just help your firm stand out, it also increases the likelihood of you getting paid on time. The key to determining billing requirements is to ask yourself the right initial questions, like:
How you choose to bill your clients, or how they request to be billed, will play a huge role in whether a client wants to retain you from the start. Do not take these considerations lightly as you build out your requirements!
If you don’t care to track the productivity of your allocation in compensation, then you are opening your door to a lot of software options. But, if you do care about details like this, you need to look deeper into how your software options handle flat fee billing.
As your firm grows, the one surefire thing your management will need is reports. Off-the-shelf reports may work for you in the immediate term, but the ability to produce reports on any metric on the fly is invaluable.
For your reporting requirements on billing, you need to address some specific questions:
The more intricate your billing needs get, the more advanced and granular your software needs to be. If you need to generate flat-fee bills and statements, complete trust accounting, and perform trust replenishments, you’ll need to consider additional key accounting details when evaluating legal practice management software.
With billing comes accounting needs. When you’re evaluating a software’s accounting system, the first thing you should ask is if you want integrated accounting or a system that can integrate with QuickBooks.
Fully integrated accounting enables you to be more efficient and prevents the common mistakes that occur as a byproduct of inputting manual entries into multiple systems. If the system is fully integrated, think about whether or not you use cash-based or accrual-based accounting.
When you’re evaluating individual vendors, consider:
Conventional wisdom (and an Al Pacino reference) reminds us that we should ABC: always be closing. For lawyers, the idiom might be better stated as always be collecting.
Billing and collections are critical to the success of any law firm. But timely billing and ensuring that your bills are paid in full and on time can be frustrating and challenging. These challenges are even bigger if your firm doesn’t have a dedicated billing and collections department.
Luckily, there are resources and technology advancements to help your law firm streamline its billing and collections process so that your lawyers can get back to lawyering.
Here’s what you need to know about billing for the legal industry:
We know that one size rarely fits all, but for law firm billing processes, there is standard practice. It usually starts with your firm bringing in a new client after a phone call or email and opening a matter (or opening a new matter for an existing client).
Billable time will be logged throughout the lifecycle of the matter, and, if your lawyers follow billing best practices, they’ll track time daily. Generally, at the end of each month, your law practice will compile the billed time and related expenses for each client into a draft bill, sometimes called a prebill.
The lead attorney or originator of the client will add notes, adjust costs, and revise the prebill as needed. That prebill bill is then approved, finalized, and sent to the client for payment.
The client then pays the bill. To optimize your client service, you can offer different payment options, including check and online payments through bank transfers and credit card payments. The accounting team stays on top of payments by tracking accounts receivable and will send out reminders to clients regarding any late payments, partial payments, or non-payments.
It seems like a simple process, and it can be. But you’re reading this blog post — and we wrote it — because we both know it’s usually not. There are ample opportunities for bottlenecks: delays in opening a new matter, attorneys not logging billable hours in time, reviewing attorneys sitting on approvals, bills being sent out late, and everything in between.
Your firm relies on getting paid and paid quickly to stay afloat. A clean, concise, and consistent billing process is the way to ensure that happens. The cornerstone of the billing process is often the billable hour.
Put simply, billable hours include all the time an attorney spends actually thinking or working on a matter. Billable time is time spent attending to professional tasks that your firm can charge to a client at the previously agreed-upon hourly rate. Generally, billable time includes things like drafting contracts or briefs, strategizing, researching, speaking or emailing with the client, or attending hearings or meetings.
Billable time is distinct from nonbillable time (e.g., time spent on administrative tasks (like billing!) and continued legal education). Billable hours are tracked in different increments depending on the firm’s preference. The key is that they must be tracked accurately to bill a client properly and correctly.
The billable hour is the cornerstone of many law firms’ billing practices. However, there has been a movement toward a range of alternative billing structures.
We get it: tracking billable hours can be a drag. It’s a lament of many legal professionals. Thankfully, there are tried and true alternatives to legal hourly billing. Here are some options for your firm to consider using to bill clients for your legal services.
This fee arrangement charges the client a set price for each matter or case without calculating the time spent on the matter. Flat fees may be preferred by clients who want certainty and consistency in the amount owed.
If you use this arrangement, be mindful of the risk of underestimating the work required for a matter and setting the fee too low. Diligence is key here.
Under a subscription-based fee arrangement, your firm provides clients with representation and advice on an as-needed basis for a set monthly fee. It also means that you’ll have a regular, predictable income.
Generally, this fee arrangement is beneficial for smaller clients who may need regular advice on matters like intellectual property and business law.
Note that a subscription-based fee is not the same as a retainer. A retainer is an advance payment for future legal services.
A contingency fee is paid by a client only if the case is won. This type of arrangement is typically used in torts, such as personal injury matters, as well as in class actions. It serves an important function for individuals who cannot pay out of pocket for representation.
Generally, these arrangements pay the attorney a percentage of the overall award. If you opt for this arrangement, it’s important to consider the risk that you may not be paid for your work.
Under a limited scope arrangement, you and your client would define your firm’s involvement in the case, likely limited in scope, and your services would involve only those tasks. A common example is retaining counsel for guidance in an e-Discovery process.
A sliding scale fee is just that: one that takes into consideration a client’s ability to pay and adjusts the rate accordingly. This fee arrangement may help your firm bring in new clients by making services more affordable.
Offering a payment plan may be key to your firm getting paid. Paying out a lump sum may be difficult for cash flow purposes for clients. By offering weekly or monthly payment plans, you can provide an additional service to clients and build goodwill while also getting paid. It’s key here to have clear, written guidelines on collections and payment methods.
The goal of the billing process is to get paid, and the best way to do that is to send clients bills that are timely, clear, and accurate. Standardization of your billing policies will undoubtedly help with this.
Start by creating a fee agreement template and well-defined guidelines that set forth your billing policies. These guidelines should include things like when in the lifecycle of a matter to send invoices and how detailed descriptions should be.
You should also have a written billing process that includes which attorney reviews the bill, how bills are sent out (e.g., mail or email), and what role the staff or accounting department plays in keeping track of bills.
Standardized invoice review is also essential. An integrated legal practice management software is your best friend here: you’ll speed up the process and minimize human error in compiling bills. Practice management software will also help your firm track payments collected and schedule follow-ups for those accounts that are past due. (It can also help with the collections process.)
A standardized billing practice makes it easier for everyone. Your clients will know what to expect and will be less likely to contest billing, and you’ll be able to keep better track of your expenses.
All invoices should include several key elements. The basics include contact information for both your firm and the client as well as the invoice number for quick referencing. Your law firm’s billing codes should also be included. This way you can keep track, at a high level, of which tasks or expenses you are billing to the client.
Billing descriptions will also help with this but at a more granular level. Getting your descriptions right is imperative: they should provide just the right amount of information and be clear to help avoid any client misunderstandings. For your clients who use LEDES billing, it’s important to draft time entries carefully and accordingly (e.g., avoid block billing and pay attention to the clerical and paralegal-type tasks performed by an attorney).
The invoice should also include the payment method, the total amount due, and the date by which the client should pay the bill.
Having uniform, thoughtful invoices will ensure consistency and help make sure that your firm gets paid for its good work.
For a moment, think about things from your client’s point of view. What would you want and expect from your lawyer?
You’d probably want clarity in billing and consistent billing practice. You can achieve these things by setting expectations early on and having regular, clear communications throughout the client relationship. Standardized billing practices and invoices will help you with this immensely.
If you’re using an hourly fee arrangement, the lawyers at your firm should track and enter their time frequently (and ideally daily). As you know, technology can help with this, and it can also help your lawyers draft templates with descriptions of tasks completed and billed.
We also recommend getting bills and reminders of payments out quickly. The sticker shock of a larger bill that accumulates over time may lead to misunderstandings. Regular invoices can keep client billing angst low and help your firm’s profitability.
Legal billing software can save your lawyers and firm hours upon hours by automating routine tasks. The right electronic billing software will help your firm generate and approve draft bills by using your firm’s preferred template and including all the information necessary to get paid.
Legal billing software can also send automated reminders to clients when payment is due (and overdue) and can generate financial reports regarding paydays to help you better visualize the big picture and stay up to date on cash flow.
Your clients can access a secure billing portal any time they need to view or pay bills, relieving strain on your law firm. The right legal billing software is also customizable to the unique needs of your firm, its various practice areas and billing rates, and clients, and can take into consideration your fee arrangement.
As you’re considering potential legal billing platforms, it’s important to choose electronic billing software that meets your firm’s needs. This includes steps involved to get onboarded and what data should be imported into your new legal billing software.
Ultimately, the right legal billing software is the one that will help your law firm automate your billing process, be easy to use, and save you time.
To understand the full history of legal industry practice management consultants, you’d have to go back 30+ years. Back then, all programs were server-based (not cloud-based) so law firms needed someone with enough technical expertise to understand how to load new programs onto their servers, install all the updates when they rolled out each year, deploy those updates to the firm servers, train and teach staff how to use the software, and ensure everything functioned and was maintained properly.
Obviously, things have changed quite a bit. Technology has progressed and law firms that are evaluating cloud-based programs don’t necessarily need someone to download their data and upload it to new software on a new server. Why? These days, the technology vendors will do all that leg work for you.
Over the course of the last several years, we have seen firms work directly with practice management software vendors and we have seen firms utilize practice management consultants. We’re not here to lead you one way or another, but rather to give you an overview of what both scenarios could look like.
When it comes to evaluating different programs, the first step is always going to be evaluating your firm’s needs.
The first thing a consultant is going to do is come in and interview you and your firm to understand your technical needs. They’ll probably be familiar with the program you’re already using as they begin their process. After conversing with your stakeholders, they’ll make a recommendation based on the information they collect.
If you’ve ever felt uncomfortable speaking directly with a vendor about what you need, or if you feel like you lack the technical expertise to make those judgment calls, we recommend bringing a consultant into the conversation.
Today’s consultants typically work with multiple systems. This can be both a good and bad thing.
The good thing? Their experience with multiple systems can prepare them to bring multiple options to the table for your firm, providing the pros and cons of each of the recommended services.
However, if a consultant works with multiple systems, they’re probably not an expert in any single one. So, if you’re evaluating multiple software systems and end up going with a specific one, your consultant will not necessarily be an expert in that chosen system. What this means is that they will likely have the foundational knowledge to initiate the basic setup for you but may lack the granular details to help you flourish and excel. In this scenario, working directly with the chosen software vendor specifically for implementation will be more advantageous because the vendor knows more about its own program, and will be better equipped to help you overcome any issues you may encounter.
Vendors and consultants operate under two very different business models. The vendor is a software company and the consultant is a service company. Software companies view services as a means to get you to use their software and to ensure your success with their program so you remain a happy and loyal customer. Service companies sell services as a way to make money.
Typically, working with a consultant is going to be more expensive than going directly to the vendor. The right consultant will offer a lot of value, but some firms don’t need those services. Think about whether or not it makes sense for your firm to hire a consultant in order to get from point A to point B.
If your main concern is cost and keeping expenses as low as possible, you may want to skip the middleman and think about working directly with a vendor.
Most software vendors today are set up for you to work directly with their team throughout your migration, go-live, training, and ongoing support period; however, they will also accommodate your firm if you choose to work with a practice management consultant.
Ultimately, the decision is up to you and what you think will not only best fit your firm today but your firm’s future needs as well.
We get it-you're sick of the games. The guessing game of law firm financial reports, that is. It’s hard to know what reports your firm should be running and even harder to interpret the data from those reports and connect the dots into a useful strategy. And most bookkeeping or accounting software, like QuickBooks, is just too hard to understand and too complex for your needs.
But it doesn’t have to be that difficult.
Your firm might be brand new to data analytics, or maybe it’s dipped a toe into the waters and has the basics down. Either way, keeping close, regular tabs on certain metrics and understanding financial reports will increase the effectiveness and efficiency of your firm and lawyers and, in turn, your law firm’s profitability. Technology can streamline this process and make collecting and interpreting your firm’s data easy.
This guide will provide a basic overview of legal reporting and analytics and tell you why they’re important and how they can help you intelligently run your firm. Then we’ll go in-depth into the different kinds of financial reports your firm should be running to help you understand your bottom line.
Legal analytics is the process of collecting, organizing, and applying data to the practice of law. If that sounds overwhelming, think of it as paying close attention to the heartbeat of your law firm’s finances and making adjustments as needed.
The goal of legal analytics is to use the collected data and subsequent reports to make informed choices for your firm. Is one practice area soaring? It might be time to hire another associate. Is your cash flow tighter in January right after the holiday season? You can prepare for that by increasing your savings in December.
With the right tools in place, your firm can review its information and create reports on all aspects of its business model. You can then use those reports to inform actionable steps that will best serve the health of your firm.
Let’s get a bit more specific.
It’s simple: law firm analytics and reporting go beyond simple financial forecasting, giving your firm a competitive edge. With legal analytics and reporting, your firm can dive deep into its functioning and gain valuable insights into its daily, weekly, monthly, and yearly net income and operations. Then you can use that information to implement workable solutions targeting both short-term and long-term goals.
Legal analytics can help you forecast with facts. You’ll be able to view data represented in charts and graphs to make sense fast of things like billable hours by attorney, money spent last week (last month, last year), and invoices. Analytics tools translate raw data into knowledge, and knowledge translates into power.
Legal reporting software offers your firm real-time reports that can be pulled daily, hourly, or even faster. This means you can quickly get your hands around potential problems before they become threats to your law firm. Basic data points for legal reporting include law firm accounting, billing, compensation, and productivity—all vital aspects of your firm’s day-to-day operations.
Below is a shortlist of the types of reports your firm should consider when building out its reporting structure. We highly recommend using practice management software with a built-in reporting tool — it’s simply the best practice. We’ve also got you covered with more detailed information regarding what these reports include and how regularly to run them with our legal analytics and reporting guide.
Productivity - Billable hours matter, and tracking them is important both for individual bonus payments and overall firm vitality. Analytics and reporting can help your firm track straight billable hours, nonbillable time, billable processes, profitability per attorney, and matter origination credit.
Practice area performance - If your law firm has multiple practice groups, keeping track of performance is important for both staffing and resource allocation. You should review the performance of your firm’s practice areas at least annually (and ideally quarterly).
Marketing and business development - Reporting and analytics can take your law firm’s marketing and business development to another level. Don’t spend money on marketing and campaigns without analyzing the effectiveness of those efforts. The following market performance indicators should be part of your law firm’s regular reporting processes: source of clients, client retention and referrals, website conversion and hits, return on investment, and production and origination.
With certain reporting and analytics tools, your firm can identify which clients always pay on time (and those that don’t), which attorneys are developing a specialty based on time billed to certain matters, which months are busiest, and which are slowest. Raw data points can be turned into complex spreadsheets and pivot tables that are easily viewable, accessible, and actionable.
What this means for you and your firm is that you can determine appropriate billable rates, monitor, and adjust financial performance targets, hire when you need, and generally make informed business decisions to improve your firm’s financial position. And you don’t have to wait till year-end to get all of the data. No matter whether you’re a small law firm or a megafirm, this data is available at the touch of a button all year long, without having to call your CPA.
A balance sheet is like a doctor’s report — a financial statement of your firm’s health. The classic balance sheet report provides your firm with simple insights into its current assets, and liabilities including accounts payable, and capital. It helps your law firm plan for both the short-term and long-term.
This income statement is a backward-looking report that your firm can use to look forward intelligently. It details the past 12 months of earned revenue and expenses paid (e.g., operating expenses like office space, tech, marketing, malpractice insurance, and legal database subscriptions). A profit and loss statement will help your law firm evaluate its most recent annualized figures, reducing the impact of seasonality and helping you visualize your firm’s health on a rolling yearly basis.
With this report, you can view a full year of financials at any time. (For example, if you run a profit and loss statement on May 20, 2022, you’ll use financials from May 1, 2021, to April 30, 2022). This allows for continuous planning for the future performance of your firm.
The monthly revenue report helps your firm better understand the flow of capital in and out. It takes into consideration time billed and the collection of funds for that billed time and can be narrowed in scope to reflect your firm’s revenue on a weekly basis as well.
This report gives your law firm tangible knowledge of how to best prepare for short-term fluctuations such as the pending conclusion of a matter or late payment by a client. In short, the monthly revenue report helps your law firm plan for the current moment while also considering trends to help it prepare for the long haul.
An accounts receivable report shows the money that clients or other parties owe your law firm. Tracking this amount is key to making sure your law firm is both getting paid for time billed and getting paid on time. These reports track receivables for each client account and matter, whether currently due or past due, and help you forecast your firm’s cash flow (and know when there is a big payday just around the corner). You can monitor accounts receivable on a firmwide basis, per-client basis, and practice group basis.
A statement of cash flows helps your firm track and manage cash on hand. It details your net income, adjustments in reconciled net income, cash from operating activities, and depreciation. The statement provides valuable insights that can help you predict when your firm might need more cash and when it can safely stow it away for a rainy day. You can customize the statement to your needs, which may fluctuate over a period of time.
This report provides your law firm with in-depth knowledge of its actual versus target revenue and allows your firm to track performance metrics like utilization, collection, and actualization rates. With this information, your firm can figure out where improvements can be made (and where it’s doing great). The leaders of your firm will get an overview of both the aggregate and individual performance of their various teams, giving them insights into employee performance.
Legal work in progress or pipeline reports are project management tools that show the financial health of a project relative to its progress by tracking the amount of time an attorney has worked, the value of such time and expenses executed but not yet invoiced. These reports look at more than expected billing and take into consideration the totality of relevant revenue and expenses.
Pipeline reports help law firms identify red flags early on and track real-time information about where capital is, where it’s coming from, and where it’s headed.
This report shows where your expectations did not sync with reality, whether good or bad. Its value is in showing where your firm might have been off for budgeting purposes. Perhaps your firm brought in additional revenue from a marketing campaign. Maybe a big client needs more time to pay a bill. These reports deliver the information that your firm needs to make useful adjustments.
Good legal practice management software can transform your firm’s reporting practices and increase its optimization and efficiency to boot. Legal practice management software makes tracking and obtaining data easier. And with better, more accessible data, your firm can compile more useful reports.
The best practice management software offers reporting tools for standard and custom reports that use a single source of data that doesn’t need to be copied from system to system, saving your firm time and money and reducing the possibility of human error.
