Strategic financial planning is essential to ensure firm stability and growth. Modern law firms need precise financial data to target opportunities to improve their bottom line and set them up for success, all of which can be accomplished with industry-leading law practice management software (LPMS).

Here are five steps to optimize your law firm’s financial planning.

1. Review your law firm’s financial statements

Take the pulse of your firm’s financial health by reviewing your financial statements from your LPMS. Automated, detailed income statements and balance sheets save time and reduce the risk of errors associated with manual data compilation. Reviewing financial and performance reports can help you identify areas of concern so you can take proactive measures to address potential issues.

The most accurate records are found in an LPMS that integrates timekeeping, billing, and accounting data all in one platform. Integration helps firms avoid double-entry recordkeeping between multiple software applications and ensures data congruency across the entire system: if you enter data once, it populates everywhere.

Leading LPMS platforms also integrate general ledger firm accounting and trust/retainer accounting in one platform. For example, Centerbase’s accounting tools double-check all of your client and firm accounts and complete a three-way reconciliation of your trust accounts, comparing your bank balance to your trust ledger to the sum of your individual client ledger balances, keeping you compliant with IOLTA best practices and state bar requirements.

2. Evaluate your law firm’s financial goals

Conduct a comprehensive assessment of the financial objectives you set for the firm in the previous year. Review your progress against goals, examining aspects such as unexpected expenses, marketing outcomes, and shifts in advertising costs. A detailed analysis enables informed adjustments to your business strategy for the coming year and helps you adapt to changing market dynamics.

Your LPMS likely has features for setting and tracking financial goals that allow you to monitor your fiscal performance in real-time. Leading LPMS platforms give you easy access to key metrics with customized dashboards and reporting that allow you to quickly evaluate whether you are meeting their financial objectives and make data-driven adjustments.

3. Update your law firm’s budget

After scrutinizing whether you met last year’s goals, it’s imperative to update your firm’s budget for the upcoming year. Consider any changes in the business landscape, including new expenses or variations in revenue. Smart resource allocation and accounting for unforeseen expenditures are critical to maintaining financial stability.

Your LPMS can help you create, manage, and update budgets seamlessly. Top platforms integrate with other financial tools that allow you to adjust budget allocations based on changing circumstances, ensuring that your budget accurately reflects your firm’s financial priorities.

Understanding incoming and outgoing cash and taking preemptive steps to address potential cash flow challenges are imperative. LPMS makes it easy to track client payments, invoicing, and expense management in real-time so you can take a constant pulse on your cash flow. This data can help you negotiate extended client payment terms and manage expenses more effectively.

Identifying opportunities to reduce costs is integral to enhancing net revenue and overall profitability. Law firms can explore various strategies, including adopting more cost-effective solutions and streamlining operational processes. Your LPMS can identify areas where you can optimize costs. Check your software’s expense tracking features to analyze spending patterns and identify opportunities for negotiation with suppliers. A detailed breakdown of expenses can help you make informed decisions on cost-reduction strategies.

4. Find ways to boost your firm’s revenue streams

Finding new ways to boost your firm’s revenue can be difficult, but data from your LPMS can highlight the way. LPMS with robust profitability reporting tools can help you track profitability at the individual, practice group, office, and entire firm levels to pinpoint how to improve your firm’s financial performance. Based on your results, you may want to expand your firm’s service offerings, target new client demographics, or revisit pricing structures.

LPMS with advanced automation features, such as automated time capture, can help ensure that you are maximizing your attorneys’ billable hours. This software can also help you accelerate invoicing and follow up with slow-to-pay clients, improving your revenue stream.

5. Seek professional guidance

Engaging the services of a professional accountant or financial advisor provides valuable insights and ensures that financial decisions are grounded in expertise. Your LPMS is a collaborative platform where financial professionals, such as accountants or financial advisors, can access relevant financial data. Centerbase offers accountants a free login to help with end-of-year audits.

Run your law firm like a business

Strategic financial planning ensures modern law firms run like a business. Following these tips and optimizing your use of your LPMS can position your firm for sustained growth and profitability.

Check out Centerbase’s robust accounting and financial management features to learn how we can help you strengthen your law firm’s financial performance.

As the year’s end approaches, it’s time for law firms to close their books and start end-of-year audits. This annual task ensures that accounts are balanced and sets the stage for a financially sound start to the new year. However, this process can be stressful if your law firm doesn’t follow accounting best practices.

Here’s a step-by-step guide that will help your law firm sail through the audit process. (You can also download our handy end-of-year accounting checklist for law firms here.)

Step 1: Organize your financial records

Review and organize all financial records, including invoices, receipts, bank statements, and expense reports. Ensure that all transactions are accurately recorded and categorized throughout the year to maintain a real-time overview of your firm’s financial health.

Step 2: Tell timekeepers to enter their time

Check whether billable hours are up to date. Nudge your attorneys and other timekeepers to get their time in regularly as you head into the holidays. Automated time capture can make it easier for your timekeepers to stay on top of their billables.

Step 3: Update all client billing records

Run your accounts receivable reports to understand what amounts are outstanding. These reports can help you determine what amounts to chase down and what to write off.

Develop a comprehensive list of clients with unpaid invoices, including their name, matter number, amount owed, and date overdue. Prioritize invoices for action, starting with the most recent unpaid ones. The odds of collection decrease with time, especially when you’re trying to collect over the holidays. Start reaching out before Thanksgiving to clients who have been historically slow to pay outstanding balances.

We recommend starting the collection process by sending reminders to clients regarding their outstanding balances. If you aren’t already, accept online payments to make it easier for clients to pay you in just a few clicks.

For aged invoices, consider offering clients the opportunity to settle a portion of the debt in exchange for forgiveness of the remaining balance. You may also want to set up a payment plan for clients who might need another quarter or two to pay your law firm back in full.

Step 4: Review expenses

Review all expenses your firm incurred throughout the year. Verify that these expenses are accurately recorded, categorized, and supported by proper documentation. If you have any outstanding debts with vendors or contractors, settle them before you close your books.

Step 5: Update your fixed asset records

Update records of your firm’s fixed assets. These long-term assets have a usage life of longer than a fiscal year. Some examples of fixed assets are new laptop computers, software, and office furniture.

Run depreciation calculations for these assets using your accounting software. You may be able to write off this depreciation as a tax deduction.

Step 6: Verify your payroll tax

Review and verify all payroll tax withholdings and payments. Make sure you accurately report these taxes to federal and state authorities.

Step 7: Check your employee records

Verify and update employee and contractor records for W-2s and 1099s. Confirm that all necessary information is accurate.

Step 8: Study your financials

After you have finalized and entered all of your revenue, expenses, and data into your financial systems, run the following financial statements:

Step 9: Reconcile bank and trust accounts

After you record all revenue and expenses, perform bank reconciliations to ensure that all financial records line up with bank statements. Investigate any discrepancies thoroughly.

A best practice is to reconcile your statements monthly and as soon as bank statements arrive. Otherwise, your law firm will need to contend with 12 months of bank statements in a short period, making it more challenging to identify errors.

Additionally, many jurisdictions require law firms to reconcile client trust accounts at least quarterly, if not monthly. You should still complete year-end trust account and retainer reviews. Your annual review is an opportunity to double-check reconciliations done throughout the year and correct any mistakes. The ledger sheet for each client’s trust account should line up completely with the corresponding bank statements.

Also review client retainer balances to determine which retainers need to be replenished. Ensure that all earned funds have been appropriately transferred into operating accounts from retainers held in trust.

Step 10: Close your books and plan for the future

After you have finalized and studied your year-end financials, close your books. You may want to set a lock date to prevent future changes plus a password to limit access.

The next step is to review and adjust your billing and accounting practices based on what you learned. For example, your data will show whether you need to adjust your time tracking and billing practices to ensure that all timekeepers record their tasks and send out bills on time.

Every day is the right day to get your law firm’s books in order

The best way to prepare for the end-of-year audit is to stay on top of your firm’s accounting all year long. By following these best practices, your firm won’t build up problems over the year.

Stay tuned for our next blog, where we’ll explore how law firms can financially prepare for the new year. In the meantime, contact us to learn how we can help you close the books on this year.

Agile, streamlined processes are what modern law firms need to effectively handle the full gamut of activities required to take a matter from client intake to paid in full. . Firms are under constant pressure to optimize their workflows, reduce manual errors, and maximize billable hours. Technology can address these challenges. But do you have the right technology to be effective — meeting client, staff and attorney expectations?

That depends. Have you embraced workflow automation yet? To get ahead of the curve, you’ll want to look into law practice management systems that offer more than out-of-the-box solutions — you need workflows personalized to your law firm’s needs.

Why should law firms avoid out-of-the-box workflows?

Some workflow automation is better than none, right? Well, it depends. Although the standard workflows that come with some legal practice management software can be convenient and save time, they fall short of custom workflows in several critical ways.

Out-of-the-box workflows follow a one-size-fits-all approach, assuming all law firms have similar processes. However, a generic workflow might not work for different practices because, for example, criminal defense workflows differ markedly from those of a real estate firm. Pre-built workflows might miss steps critical to your practice or include irrelevant steps that can lead to inefficiency and redundancy.

Generic solutions can also hurt adoption. Employees are more likely to engage with technology when it aligns closely with their daily tasks. Out-of-the-box workflows might not resonate with lawyers and staff, leading to low adoption rates. When users don’t fully embrace automated processes, your firm won’t realize the full value of your investment in technology.

What legal workflows will benefit most from customized automation?

A personalized approach to workflow automation can significantly enhance the efficiency of a number of law firm processes. Here are just a few examples:

It’s time to get personal — about your law firm workflows

Workflow automation, especially when personalized, helps law firms work the way they want, and do it faster and more efficiently. By automating tasks like client intake and billing, law firms can reduce errors, accelerate results, and enhance client satisfaction. And, beyond saving time and boosting profitability, customized workflows help firms work the way they’re used to, encouraging adoption and sustaining the usefulness of the software for the firm.

Get a demo today to discover how Centerbase can customize workflows to meet the needs of your law firm.

Written by Carson Bailey, M. Ed.

Before you can implement new legal software, you must convince your lawyers and staff to adopt it. And to adopt new technology, legal professionals must understand its features and functions — and how they will benefit from them. That requires in-depth training.

But training can’t be one size fits all. After all, no two people learn the same, and you need to cater to their learning preferences to maximize their information intake — and the return on your technology investment.

The success of your new legal software hinges on user competence and confidence. In this article, we’ll share how to design a training program as part of your change management initiative when adopting new software that will appeal to your team and ensure your new solution achieves its expected returns.

But first, let’s explore why you should invest in training.

What are the benefits of investing in new software training for legal teams?

While balancing employee training and billable hours can be challenging, the rewards that stem from well-trained staff far outweigh the initial resource investment. Here are just some of the benefits of prioritizing staff training.

To achieve these benefits, you must ensure that your training follows best practices.

What are some best practices for conducting law firm technology training?

Setting up training for lawyers and staff on new law practice software requires a strategic approach to ensure a smooth transition to new software. To encourage lawyers and staff to engage with training, you must align it to their needs and make it valuable and motivating. Time is precious, so training must be efficient and effective, given the responsibilities already filling legal professionals’ plates.

Consider following these best practices to strengthen your next software training:

Improve tech adoption with customized legal software training

The successful implementation of new software in a law firm requires a comprehensive training strategy. Adult learners have distinct needs and preferences, and tailoring training to meet those needs is critical for a seamless transition.

By adopting the right training methodologies and involving the right stakeholders, law firms can navigate the challenges of software implementation and equip their teams with the skills needed for a competitive edge in the legal industry.

Contact us today to learn more about how Centerbase training is designed to ease the transition to new technology and accelerate your law firm’s productivity.

Executive directors and legal administrators play a crucial role in the smooth operations of a law firm. They wear many hats, ensuring organization, facilitating communication, balancing accounts, and scheduling dockets, among many other things. They’re the drivers behind the business of law  making sure that nothing slips through the cracks.

But all of these responsibilities require a specific kind of person and can add up to a highly stressful job. Fortunately, legal technology makes it easier than ever to support legal administrative staff so they are able to focus on higher-level work and do so with and less unneeded stress.

In this article, we’ll discuss how to attract and retain law firm administrative staff, including how technology can help you deliver the support that administrative personnel need.

Why is it hard to recruit new talent to administrative roles in law firms?

2022 Report on the State of the Legal Market from the Thomson Reuters Institute and the Georgetown Law Center noted “serious retention challenges with respect to professional staff other than lawyers.” In a tight talent market, “many [administrators] feel empowered to shop around to improve their compensation and working conditions. Law firms may have to confront something they haven’t seen in the legal industry in quite a while: leverage owned by those who are not attorneys.”

In today’s environment, legal administrative professionals know they have earned better work conditions. They want to feel valued in terms of compensation and recognition and want to have a better work/life balance. It’s clear that law firms need to act now to ensure that they can both hire and retain top administrative talent.

What can I do to attract and keep new top administrative talent?

To attract and keep legal administrative talent, your law firm needs to take a strategic approach. Here are a few ways that your firm can get started.

Offer competitive compensation and benefits

Money talks: it’s an obvious reason that people choose a job and stick with it. People want to be paid what they are worth and receive compensation consistent with the value that they bring. By offering compensation and benefits packages that align with what’s being offered in the legal market, you’ll show new talent that your firm values their role and prevent them from looking to jump ship to your competitors.

However, it takes more than just compensation to make a staff job at a law firm fulfilling.

Build a law firm culture that appreciates the value of administrative staff

Over the years, some law firms have maintained a de facto caste system that separates lawyers from nonlawyer staff. The very word “nonlawyer” is part of the problem, minimizing the importance of the work that law firm staff do. This type of firm culture sometimes also leads to heavy investment in tools, technology, and benefits to support lawyers but less investment for staff. This approach hurts the efficiency of the entire firm.

To ensure you build a culture that supports legal staff, emphasize the strategic importance of administrative work and highlight the varied responsibilities that administrative personnel have and how they help your law firm function and grow. We also recommend outlining clear career progression paths for administrative professionals in your organization. For example, a firm can offer opportunities for continuous learning and development, such as training programs, workshops, and certifications. Also consider how you can implement technology designed to support them working more efficiently, such as tech platforms that enable them to streamline calendaring, simplify document management, improve billing practices, and handle other strategic  tasks.

Find ways to improve work/life balance

Work/life balance is important across the board and it plays a crucial role in attracting and retaining top talent, including legal administrative staff. Administrative staff typically face demanding workloads, tight deadlines, and high-pressure situations along with attorneys and both sides appreciate benefits such as paid time off and flexible work arrangements.

Hybrid work arrangements are an important perk for today’s admins, and enabling staff to work from home requires the right legal technology. Cloud-based legal software allows administrative personnel to work from anywhere. The right matter management platform will put all of the essential information about a matter or client at your staff’s fingertips, keeping all related records such as texts, bills, and documents corralled in one place. A cloud-based client portal avoids back-and-forth, time-consuming emails and reduces the repetitive work on your admins’ plate by giving clients direct access to the answers they need. Leading cloud-based document management platforms preserve client confidentiality and protect sensitive matter details, eliminating the risks of sending confidential documents in unencrypted emails.

Simplify tedious work

But improving the work life for your team goes beyond access. A critical part of making work more fulfilling requires firms to give staff the tools that simplify their work.

Automating tedious, repetitive, manual work like pre-billing and client intake not only makes admins’ work more efficient, but it also means that your team can devote their time to higher-value work that requires a higher skill level. Allowing administrative professionals to focus on more strategic tasks creates a more satisfying work environment. You can also improve their workday with tools that foster communication and streamline project management. This technology reduces administrative bottlenecks, enhances efficiency, and fosters collaboration, all of which can help attract and retain legal staff.

Enhance your law firm’s brand

There are lots of reasons to invest in branding, one of which is that legal administrative professionals in the market will Google your law firm’s website and assess its online presence, including not just its job listings but also its culture. A well-designed, informative website enhances your firm’s credibility and professionalism, which can attract high-quality administrative staff seeking career opportunities with reputable, forward-thinking organizations.

We recommend a professional yet friendly website that includes staff and administrator bios. This will emphasize to candidates that administrative professionals are a valued part of your firm’s legal team. You can also share testimonials from staff and offer a glimpse into what it’s like to work for your law firm, so candidates can determine whether they’re a good fit.

Use legal technology to attract legal administrative professionals now

In today’s competitive job market, your law firm needs to do more than offer a competitive  salary and standard benefits. You also need to invest the overall importance of your administrative staff, including in legal technology, showing them that you value them and their work enough to help them do it more efficiently and with fewer headaches.

Attracting and retaining top legal talent is critical in today’s competitive market. A team of top attorneys gives your firm a competitive edge and ensures your firm will continue to impress clients with quality legal work.

In this article, we’ll cover four ways to attract (and retain) top legal talent, with an emphasis on how legal technology can help you do both.

What are the expectations of today's top talent?

With recent layoffs at large law firms and the incoming classes of law school graduates, there are great opportunities for smaller and midsize firms — if they can compete effectively in the job market.

Today’s top legal talent has high expectations: competitive pay, opportunities for professional development, a meaningful work/life balance, and leveraging advanced legal technology. While meeting these expectations may seem challenging, it’s essential for law firms that want to attract and retain the best lawyers and staff.

Let’s get into some specifics.

1.   Competitive pay and benefits

Top legal talent expects to be paid what they are worth. Offering a competitive salary and comprehensive benefits package is crucial to attracting new lawyers and staff. A higher starting salary and market benefits (e.g., health, dental, and vision) will translate directly into more applications for open positions and higher retention rates.

Of course, if you get into a salary tug-of-war with your competition, you’ll eventually run out of cash. Increases are only sustainable to a point. That’s why your firm should focus on the totality of what it has to offer, including training, work/life balance, and technology that makes the job easier.

2.   Professional development opportunities

Top legal talent typically wants opportunities for professional growth and development so they can stay ahead of the curve. As a law firm, it’s important to offer these opportunities at all levels of practice.

For both lawyers and staff, constructive feedback and positive encouragement are important. By providing personalized feedback and having one-on-one meetings and not just waiting for end-of-year performance reviews, your attorneys and staff members will feel supported in their learning and will believe that there’s a path forward for them in the firm.

More formal learning opportunities are also essential for attracting and retaining skilled attorneys. Incorporate opportunities for continuing legal education (CLE) sessions and conferences in your learning and development budget. Investing more in learning and offering growth opportunities means your lawyers will be prepared to deliver better work to your clients — and more satisfied clients mean more income for your firm.  

3.   Work/life balance and flexible work arrangements

Work-life balance is key in attracting top talent, especially if that top talent consists of younger attorneys. Lawyers work long (and often stressful) hours on cases and acquisitions, so offering a supportive environment is crucial in counterbalancing the other demands of the job.

By offering flexible work arrangements — like remote or hybrid work or adjusted work hours — you’ll provide lawyers with the tools to manage their personal responsibilities. This includes flexible arrangements for new parents or employees who might need to work remotely to care for an aging family member. By providing flexibility, your firm will emphasize its commitment to supporting its attorneys and staff, and in doing so will attract the best of the best.

Legal technology can be employed to make it easier for attorneys to get their work done anytime, anywhere. Cloud-based legal software that enables secure remote access of case files, documents, and other client materials means lawyers can work from home or on the road more easily. Leading legal software platforms can enable lawyers to communicate and collaborate seamlessly with team members and clients through document sharing, messaging, and videoconferencing.

4.   Advanced legal software

Advanced legal technology isn’t only important for offering flexible work arrangements — it’s also an expectation for incoming top talent. Good legal tech makes life easier for attorneys by streamlining work processes and increasing efficiency. It allows lawyers to work smarter by calendaring deadlines, prioritizing billable tasks, and ridding themselves of mundane or repetitive tasks through automation. Time capture tools make it easier than ever to keep valuable billable minutes from falling through the cracks.

The bottom line on legal recruitment and retention: Money talks, but so does legal technology

While lawyers may be wooed by an attractive compensation package, they won’t stay if they don’t like working for your firm. An important part of your firm’s culture rests on how well you enable your lawyers and staff to work. That requires an investment in the latest legal technology.

This means tools to help with everything from case management to removing the tedium of timekeeping and billing (maybe the most frustrating of all law firm tasks).

And tech that enables internal collaboration, helping teams build a collective knowledge base that everyone can access and improving work quality, avoiding duplicative efforts, and accelerating results. For instance, a fully integrated matter management system will help keep everyone on a team up to date on matter status and highlight roadblocks where someone may be able to offer their expertise. Teams can also collaborate in real-time and track matter status, allowing for greater flexibility while also building a sense of community.

Everything is connected this way: better tech leads to less tedium, allowing lawyers to get their billable work done more quickly, which gives them more time to focus on their personal lives and find their own preferred work/life balance.

Of course, one of the best ways to convey to talent that you are the right choice for them to excel in their legal careers is to have an up to date and professional website. today’s talent expects a robust digital presence, and the first place they go to research employers is online.

Your firm’s webpage should highlight your firm’s culture and include statements or videos on your website with partners, associates, and staff explaining the benefits of working for your firm.

Junior and senior lawyers alike expect access to advanced tools that make work easier, enabling them to deliver exceptional client service and improving their work/life balance in the process. Law firms that invest in legal technology platforms can attract better talent and position themselves as industry leaders.

Compliance is a priority for law firms. And legal software can be a key tool in helping you meet your firm’s compliance requirements.

In this article, we’ll cover major compliance issues that law firms need to monitor and solutions that can reduce your risks.

What online compliance risks does my law firm face?

A primary compliance concern for law firms is staying on top of compliance related to both data and processes: for example, storing firm and client data safely in the cloud, managing online client portals, processing online payments, handling trust accounting issues, and following ethical requirements relating to online advertising and marketing.

In this section, we’ll go over a few major buckets of compliance risks in the digital world that your firm should recognize and address.

Ensuring cloud security

When it comes to storing data, security is the top compliance priority. Law firms must make “reasonable efforts” under ABA Model Rule of Professional Conduct 1.6 to prevent the disclosure of client-related information. That means law firms must understand what client data they store, where they are storing it, and what the potential entry points for data loss and disclosure are. Additional compliance requirements vary depending on the size and type of law that your firm practices, but it’s best practice to review applicable requirements and make sure that your firm’s cloud infrastructure has the robust protections necessary to safeguard your clients’ data.

Choosing a reputable provider of cloud-based legal platforms is the first step in ensuring compliance. The provider should have a proven track record and, ideally, have suffered zero data breaches in the past. Make sure that it offers robust security features like encryption and access control, such as password policies, two-factor authentication, and role-based permissions.

Sharing data in online client portals

Much like the cloud, client portals require firms to pay special attention to how they secure client information. Your law firm should implement strong access controls, such as two-factor authentication and secure file transfer protocols, to prevent unauthorized access to client data. Law firms that use client portals also must comply with the ABA Model Rules of Professional Conduct, which include requirements for maintaining client confidentiality (Rule 1.6), establishing competence (including with technology) (Rule 1.1), and keeping clients informed of matters (Rule 1.4).

Processing client payments online

There are a host of considerations when deciding how to accept online payments from your clients. Clients overwhelmingly prefer to have the ability to pay online and to pay with credit cards. Turning to legal software to do the behind-the-scenes work of processing online payments for your law firm is your best bet.

The right legal technology platform can ensure that all online payments accepted follow the ABA Model Rules, Interest on Lawyers’ Trust Accounts (IOLTA) guidelines, and Payment Card Industry Data Security Standards (PCI DSS). The right legal payment and accounting software will ensure that your legal team does not commingle client trust account funds with the funds they use for operations.

Following rules for online law firm advertising

Law firm websites must meet certain ethical requirements set forth by their state bars. For example, websites shouldn’t advertise a lawyer as an “expert” or as “specialized” in a particular practice area unless they hold a specific qualification permitted by their state. They should also not hold themselves out to be the “best” lawyer to handle a type of matter. Attorneys may also need to include a disclaimer noting that the information on their website should not be considered legal advice. Lawyers should check their state bar’s requirements to ensure compliance. In some states, the bar may require or permit the submission of the law firm’s website content for ethical review.

Additionally, prospective clients want to see that your law firm is capable of handling matters like theirs. One of the best ways to highlight your expertise is through the words of satisfied clients. But there are limits to what you can share online — and you also need to prepare for how to handle a negative review. ABA Model Rule 7.1 requires that all communications about a lawyer and their services must be true and not misleading. Marketing statements, such as testimonials, could be misleading if they set an expectation that a lawyer can obtain the same results as another client without reference to the specific factual and legal circumstances of each client’s case.

Finally, law firms should make sure that their websites meet the requirements of the Americans with Disabilities Act. That means your site’s design and visual and audio content need to be accessible to everyone, including people with disabilities.

A digital marketing company that focuses on helping law firms can help identify and avoid online marketing pitfalls and help you comply with your state bar’s requirements.

What other steps should my firm think about for compliance?

True compliance starts with your people. Your law firm should have a data protection plan (especially when it comes to client data) that outlines steps and safety procedures. It should include policies on who can access client data, how and when they can access it, and how data is retained and backed up. Also, make sure that your attorneys and staff are trained on how to handle sensitive data and best practices for compliance.

Legal software is critical to your law firm’s compliance

Legal software plays a critical role in helping law firms remain compliant with laws and regulations. As touched on throughout this article, the laws related to compliance are plentiful, and navigating those waters yourself is unnecessarily risky.

With advanced legal software, your firm can ensure data security through the cloud, keep client information confidential, and process online payments both quickly and while fulfilling your legal and ethical requirements. By leveraging legal software, your firm will streamline compliance processes, reduce the risk of data breaches and other violations, and ultimately protect your law firm’s reputation.

Almost nine in ten Americans use some form of digital payment. It’s no wonder, then, that law firm clients expect to be able to make payments online. Not only does this make handling bills easier and faster for your clients, but it’s also good for your law firm’s cash flow. Online payments close the gap between the time a client is billed to when that client makes good on payment.

In this article, we’ll cover how your law firm can accept online payments while remaining compliant with applicable law and ethical guidelines. We’ll also note some of the best features to look for in your payment solution software.

Do clients expect online payment options? 

Yes! Clients expect law firms to deliver a memorable client experience, which includes making payments quick and easy by offering a variety of payment options. Clients want the flexibility of making payments via credit cards, e-checks, and digital transfer services like ACH. In fact, a recent study found that 40% of clients would never hire a lawyer who didn’t take credit or debit cards.

This variety of payment options is also good for your firm and its bottom line. By offering several convenient payment methods, law firms incentivize their clients to pay invoices faster and completely. When you expand your firm’s acceptable methods of payment, you’ll likely find that you spend less time waiting for checks in the mail, less time hounding clients for late payments, and more time on billable work.

Is accepting online payments complicated?

Accepting online payments isn’t complicated, but it does require planning and a little help from technology. It’s not inherently risky for your law firm to accept online payment. Nearly every jurisdiction in the United States has given the green light for law firms to accept credit card payments for legal fees and expenses. But, as with all legal fees, your firm must comply with applicable legal requirements and ethical responsibilities.

In broad strokes, your firm must comply with the rules requiring the separation of client and third-party funds from your law firm’s operating funds. What is the best way to do this? Use payment software developed for attorneys with this exact ethical issue in mind. Without it, your firm might not be compliant.

While your law firm accepting online payment isn’t dicey, using a non-legal payment solution is. These software options often fail to properly handle law firm transactions according to the trust accounting principle noted above as well as Interest on Lawyers’ Trust Accounts (IOLTA) guidelines. The result can be noncompliance, which is bad for everyone — including your law firm’s reputation. The right technology ensures that your law firm has separate operating and trust accounts and ensures that processing fees are deducted from your operating account only.

If you set yourself up correctly, your firm will never have to worry about an inadvertent ethics violation and can focus on delivering exceptional client work.

What makes online payments compliant or noncompliant? What can I do in my firm to ensure compliance?

With the various rules and regulations regarding legal payment, fee collection comes with a host of unique considerations, especially when accepting credit card payments. The right legal payment processing platform will do the behind-the-scenes work for your law firm, ensuring that all online payments accepted comply with the ABA Model Rules of Professional Conduct and IOLTA guidelines.

When picking a payment solution, we recommend looking for the following four features to ensure compliance and improve ease of use.

1. Manage multiple trusts/retainers under a single matter

Not only do clients expect to be able to pay online, but they also expect that your firm will manage their multiple trusts and retainers. Rather than falling short of their expectations, with the proper tools, you can easily manage multiple trusts and retainers under one or many matters and even track them at the client level.

By having the power to track both your firm and client finances in one central place, you can keep an eye on money moving in and out of your firm with complete faith in your firm’s compliance.

2. Separate earned revenue and unearned revenue

Under most state laws, law firms must keep earned revenue and unearned revenue separate. The right payment tool recognizes when payment revenue is unearned (that is, applied to a trust replenishment) and when it is earned (applied to a billing entry) and deposits it accordingly.

You need a legal technology platform that can take an invoice payment and split it between two accounts, keeping your firm in compliance, saving your accounting team time, avoiding mistakes, and raising your collection realization rate. Avoid tools that require you to have either a trust account or an operating account and then require a bookkeeper to determine whether and how to apply and move the funds. That’s asking for human error and compliance woes.

3. Easily manage your IOLTA accounts

You need an efficient way to track multiple IOLTA accounts. With a robust legal platform, you can automatically assign accounts for each client trust so that you can track the flow of money, giving you visibility into where your firm and trust money meet at all times.

4. Apply available funds to pay off client bills automatically

Instead of waiting for that check to arrive in the mail, you can sweep through accounts to find matters with accounts receivable balances and available funds. With this information, your firm can quickly create bill payments and then write checks from your IOLTA account to an operating account. This way, you’re always efficiently applying your client’s money (and making them happy).

If you’re the administrator of a small or midsize law firm, you’re probably wearing a lot of hats. In fact, you probably have a closet full!

You’re overseeing the bookkeeping, ordering supplies, managing the budget, and running payroll. You’re handling equipment and facilities issues. You’re creating and implementing policies and procedures and setting long-term goals. You’re probably also handling the human resources side of the firm for non-lawyers, including recruiting, onboarding, training, and managing administrative assistants and paralegals.

In short, if it’s part of day-to-day legal services operations, and it doesn’t involve the practice of law, it lands on your desk. (There is a desk somewhere under all of the piles, right?) That means when your firm’s leadership team wants to find new ways to increase efficiency and drive law firm profitability, those tasks are automatically yours too.

It’s a daunting task, no doubt. But fortunately, there are legal technology solutions that you can implement quickly so you can demonstrate progress toward your goal. Here’s a list of typical efficiency problems that plague law practices along with some suggestions for how to solve them:

Getting paid by clients

Legal billing is the lifeblood of a law firm. Because it’s so important, it often becomes a tedious process with many steps and approvals. But just because billing is critical doesn’t mean it has to be cumbersome.

Law firms can take the pain out of the billing process with an automated system that streamlines the billing workflow. Look for an e-billing system that allows lawyers to edit bills online — not in hard copy — to avoid the need to print and reprint or track versions of pre-bills. A system that allows reviewers to see previous markups means that bills are approved in less time and eliminates friction in the approval process, getting money into your accounts faster.

Tracking time

No one likes to measure their life in minute-by-minute increments, and lawyers are no exception. But, as you know, time tracking is essential if your firm wants to stay out of the red.

While you can’t eliminate the need for billable hours, you can take some of the pain out of the time-tracking process. Lawyers often don’t record all their time. Sometimes that’s because they’re writing down what they’re doing and don’t remember to note down every detail. Other times that’s because they’re on the go and don’t have their computer open, so they can’t recall the work they did when they get around to recording it later.

To make it easier for your timekeepers to track every billable minute, choose a billing system with a timesheet that integrates with the technology you use. Look for a platform that integrates with your firm’s software, such as tracking the emails that lawyers send in Outlook or the documents they work on in Word. And some platforms have mobile apps that automatically record phone calls, texts, and calendared appointments as billable events.

Spending too much time on administrative tasks

Lawyers regularly complain that their administrative workload takes too much of their billable time. In addition to billing, lawyers are spending too much time on non-legal work such as looking up matter information for clients and tracking deadlines. It’s difficult to manage a matter when information is stored in hard copy as well as in multiple systems online.

A matter management system can keep every matter detail in one place, from details for parties to all documents, emails, meetings, and calls. The most comprehensive platforms can track the outcomes of calls and meetings and the current budget status of a matter. They can also alert lawyers about upcoming milestones and deadlines. Additionally, they provide a searchable place to store notes about matters, substantially reducing the time it takes to find pertinent case information.

Improving the client intake process

There’s a lot of competition in the legal industry. The firm that responds faster to the inquiry of a prospective client is often the firm that wins the business. Two out of three prospective clients say their decision to hire a firm is influenced by a firm’s responsiveness to their first contact. And when clients are impressed from the get-go, they’re much more likely to stay with your firm.

But manual intake processes create roadblocks to bringing in new matters. And all too often, form submissions from your website may not be a priority in an overflowing inbox.

An online onboarding process can expedite the conflict check process and ensure that you get the right information in the right hands, so you can contact a new prospect more quickly. Some platforms allow you to customize the intake form. Then not only can you route the collected information to the appropriate staff, but you can also automate workflows. This way, you ensure that no steps are missed, assign and follow up on tasks, track the progress of the matter, and smooth the intake process for the client.

Keeping clients informed

Clients often complain that they don’t know the status of their matters. When lawyers don’t keep in touch, clients get frustrated. They call and email your firm’s lawyers, asking them to give them an update. That means lawyers have to drop the work they’re doing and comb through their files to inform their clients. And that means extra frustration for your lawyers too.

A system can make it easier for your lawyers to remember to send emails—without the need for the clutter of sticky notes or calendar reminders. Matter management systems can automate client emails whenever a matter moves to a new stage, so your clients are always in the loop. And they can also meet your clients’ expectations for 24/7 digital access to their case information via a client portal. Happier clients have stronger ties to the firm and are more likely to refer new business your way.

Ensuring your legal professionals are busy and engaged

In this environment, it’s critical to make sure your people are happy at work. That means they can’t be stressed with too much work, nor can they be twiddling their thumbs at their desk. Striking the right balance means you need insight into their workload and productivity.

A platform that offers productivity tracking and timekeeper budgeting tools can give you critical insights into your team’s upcoming assignments and deadlines. You’ll be able to see how much time people are billing on certain tasks and projects. Perhaps most importantly, you’ll be able to ensure that tasks are being distributed fairly throughout the firm and reallocate work to avoid overload.

Generating standard documents

Though no two matters are alike, they still have many documents in common. From retainer agreements to settlement agreements and from requests for production to interrogatories, there’s often no need to recreate the wheel.

A document management system can make it easy to get even greater value from work product by organizing it for creation and reuse. You can set up templates and auto-generate documents with client information built in. Or you can search for a prior work product for a client or a similar project that you can repurpose for a new matter.

Managing collections

Hounding clients about overdue bills is a serious pain point for many firms. Accounting or billing staff have to send manual reminders and call clients who are overdue.

An automated billing system can send out reminders once a bill is overdue and then periodically until the client pays off the balance, eliminating that headache from your billing team’s workflow.

Simplifying reports

Law firm managers and partners often want quick access to reports so they can make decisions. Pulling together a report that collates all the data and metrics they need is easier said than done when you have multiple systems that store firm accounting and matter data separately. Before you can create a report, you have to gather, sort, and compile that information into a readable form.

But a system that integrates accounting, billing, and practice management software enables you to assemble comprehensive reports at the push of a button. Better yet, the right system will give your firm’s leadership team a dashboard view that offers real-time insights into how the firm is performing.

How can practice management software help improve a law firm’s operational efficiency?

Modern law firms would love to hire a professional to drive innovation, efficiency, and profitability within their firm. But for many small firms, that just isn’t in the budget. Instead, they have to look for other ways to improve case management and your law firm’s productivity. Enter legal tech management tools: namely, practice management systems.

While a practice management platform can’t replicate all the functions of a legal operations guru, its automation of time-consuming tasks and simplification of workflows can take some of the burden off a law firm administrator’s plate.

A practice management platform that integrates matter management, timekeeping, calendaring, billing, accounting, reporting, document management, and more in one system can serve as a resource for quickly increasing a law firm’s efficiency. And, in turn, it can help you improve your law firm’s bottom line, alleviate the bottlenecks of manual work, and help turn your law firm into a pillar of productivity.

You know that your law firm is a business. But only recently have firms started focusing on how to improve their business. (After all, the leading legal industry organization dedicated to legal ops, the Corporate Legal Operations Consortium (CLOC), has only been around since 2016.) To date, few firms today have hired dedicated legal operations professionals, much less created a formal legal operations function.

An easy first step on the journey toward more effective legal operations is hiring an experienced legal operations manager. A driven and dedicated legal operations manager can make all the difference for a law firm that is looking to optimize business processes to increase revenue and productivity.

What is legal operations?

Legal operations is the business of running a law firm.

While lawyers may spend the bulk of their time engaged in the practice of law or strategic planning for matters, the legal operations department works behind the scenes to make sure all of that is done as efficiently and profitably as possible. Strong legal operations departments work to streamline processes within the law firm to maximize operational efficiencies, helping lawyers work smarter and faster so they can earn more revenue.

Day to day, this might look like monitoring lawyer productivity, identifying new legal analytical tools, budgeting for the firm, and managing third-party providers. Over time, it means implementing new processes and practices that will guide the law firm along the path to becoming a thriving business.

A legal operations team is no longer a luxury reserved for large firms. It’s now a valuable resource for small and midsized law firms that live and die by the bottom line. Legal operations should be a priority for law firms of all sizes, especially those looking to grow.

What does a legal operations manager do?

You can’t have an effective legal ops department without a fearless leader. That’s why near the head of the table in the legal operations department sits the legal operations manager.

A legal operations manager oversees various legal ops team members’ day-to-day activities and ongoing projects. Depending on the size of the law firm, the legal ops manager might report to a director of legal operations and be responsible for a larger team or just one or two legal operations specialists or analysts.

Either way, the legal operations manager must take stock of the current state of affairs of the law firm and come up with ways to make it better.

Handles the law firm budget and billing

Legal operations managers take a deep dive into the firm’s budget. They break down where money is going within the firm and where money is coming from. They also provide stable financial planning for the future.

Legal ops managers use past yearly spending to build forecasting models and proactively identify new, creative ways to optimize financial resources within the firm. Many legal ops managers will also analyze processes related to e-billing to streamline outdated, tedious, and repetitive workflows. They study peer law firms as part of benchmarking exercises, always looking for innovative ways to price work and trim expenses.

Evaluates lawyer productivity

But legal operations managers do much more than just budgeting! They also look at individual lawyer productivity and identify ways to make everyone at the firm work smarter. Sure, legal ops managers can’t step into the shoes of the managing partner, but they’ll have valuable input on staffing questions that firm leaders will want to listen to. Among other metrics, they analyze data related to billable hours, assigned cases, and revenue generated as a result of each lawyer’s work.

From that data, a strong legal ops manager comes up with ways to assign certain cases to lawyers who are more or less productive, depending on the needs of the firm and the ideal legal spend per case. They might also plan training for lawyers and staff and develop policies designed to increase firm productivity. Some legal ops managers even go as far as making recommendations on hiring and firing decisions.

Manages third-party vendors

Legal operations managers oversee third-party vendors, such as alternative legal service providers, freelance lawyers, and other professionals, like experts and consultants, who provide services to the law firm. In the past, firms might have relied on word-of-mouth recommendations or professional connections to decide where to outsource work rather than choosing the best, most efficient vendor based on objective criteria.

Proactive legal ops managers challenge traditional sourcing models. They also look for opportunities to rethink pricing arrangements and work to negotiate favorable rates from third-party vendors to maximize the value for every dollar spent. They scour the job boards and vet candidates to ensure that their firm avoids wasting money in the recruitment and onboarding process.

Collects and analyzes data

At the heart of it all, legal ops managers must collect, analyze, and translate the firm’s data. That means breaking data down for partners in the firm who might not be so business inclined.

Legal ops managers are responsible for data that extends across many different areas of the law firm. Their most common focus is the budget, scrutinizing data from their e-billing system to understand their revenue by practice area or case. They also collect data about lawyer productivity and translate that into smart hiring practices and case-assignment strategies that save money.

To collect this data, a legal ops manager will spend time researching and trying out innovative technology to choose the best tech for the firm. They’ll need to understand the latest trends and the opportunities to expand and incorporate new platforms into their work and the work of others in the office. This technology is important to optimizing processes and saving time (which means saving money) throughout the firm.

What background is ideal for legal operations manager jobs?

Most legal operations managers have a bachelor’s degree and at least some experience in legal project management or operations, whether in another law firm or in-house. Optimal candidates often have a blend of corporate legal department and law firm experience, which will ensure they have a deep knowledge of the inner workings of law firms along with the know-how and skills to position the firm as a leading outside counsel capable of addressing the needs of even the most demanding general counsel.

A job description for a legal operations manager will focus on competencies such as analytical skills, problem-solving skills, and communication skills that enable ops managers to speak to a variety of stakeholders at all levels of the firm. They should also have experience managing projects, developing policies, and collaborating with legal teams to deliver results.

Successful legal ops managers often have strong backgrounds in vendor management and change management initiatives. Extensive knowledge of technological solutions, including contract management, knowledge management, and matter management, will help the legal ops manager harness the inherent value in the firm’s data and inform their recommendations for procurement and service delivery strategies.

How can a legal ops manager increase law firm efficiency?

Hands down the best way for a legal operations manager to increase their firm’s efficiency is to leverage technology.

Legal technology has dramatically improved over the years. Instead of toiling away in the law library, lawyers can find relevant cases and statutes with just a few keystrokes. There’s no need to struggle to estimate the likelihood of winning a case because artificial intelligence and machine learning tools can do that for you. And - let’s not forget technology that helps with client recruitment, management, and correspondence.

Not only does a legal operations manager need to understand how to use these types of technology to make lawyers' work more efficient, but they must also understand how to leverage technology to make the entire law firm more efficient as a business.

Luckily, there are platforms that can help legal operations managers monitor key performance indicators (KPIs) like legal spending as a percentage of the firm’s revenue, the cost of a case per matter, and the cost per lawyer. This technology can also crunch the numbers so that legal ops managers can see whether the firm is optimally productive. Platforms can track the percentage of cases resolved vs. litigated, staffing and paralegal spend by lawyer, legal hours vs. administrative hours, and deadline compliance. Legal ops tools can even track the amount of time that a case takes at each pivotal point and the overall satisfaction of each client.

By leveraging innovative technology and continually re-evaluating the firm’s current processes, legal ops managers can get a clearer picture of the firm’s financial status and use the data to come up with new ways to make things run smoother, make the lawyer’s jobs easier, and make the law firm more profitable.

What is the future of legal operations management?

The future of legal operations management is constantly evolving.

Law firms’ financial, strategic, and internal decision-making is increasingly based on quantitative data instead of guesswork. That data is valuable for legal ops managers who need to evaluate productivity and streamline efficiency within the law firm. Instead of merely reporting on the data to firm leaders, future legal ops managers will play a vital role in redefining how law firms can work smarter and build a better business model.

This is a tremendous opportunity for legal ops professionals to engage in the business management of a law firm and to take part in the legal technology revolution. It is also a chance for law firms to differentiate themselves from competitors by creating value and to leap headfirst into the modern era.

Of course, there will be challenges: changing the status quo in a law firm can be difficult at times. But once law firm leaders see the value created by a great legal operations team, headed by a strong legal ops manager, it won’t take long for them to get on board.

By spending time now to build a strong legal operations team headed by an experienced, tech-savvy legal operations manager, you can modernize your firm and situate it to capitalize on future trends in legal operations.