Many firms, upon deciding it’s time to evaluate new technology, make the mistake of immediately sprinting toward a solution, especially when they have been forced to react to address a sudden problem.

Diving headfirst into the search for a new practice management software completely forgoes a huge step (and arguably the most important one): meeting with the people who are going to use the software the most.

Meet with Your Team Internally

As soon as you realize your law firm needs new technology, the first thing you need to do is bring the discussion to your team internally. Too often, the decision to buy software is made by a handful of people within the organization, which makes firm-wide adoption more challenging. It leads to greater conflict and pushback and makes training on the new system considerably harder. Without team buy-in, expect a harder transition for many when it comes time to implement the new technology.

How to Meet with Your Team

Let’s face it: Some people are set in their ways and will push back on adopting new technology, period. If you have staff who are used to using one system or a certain set of procedures to complete their work, they may be quite reluctant to switch to a completely new way of doing things.

If you'll be the one organizing and collecting the internal data, start by putting out some feelers to people in order to get a grasp on the sentiments around the firm. It will be more helpful than you think to know exactly what people’s gut reactions are prior to processing any feedback.

To get the best results, send your team an email saying you’re shopping for new software. Within the email, make it clear that you are looking for internal feedback. Then, set in-person meetings to discuss their feedback and thoughts. Conducting the actual discussions in person as opposed to over email encourages open dialogue and ensures your team feels like part of the process.

If you’re a small team, try to talk to everyone at the firm; if you’re midsize, it’s advisable to speak with at least one person from every department that will be heavy users of the software.

Consider speaking to partners, associates, paralegals, and legal assistants, among other stakeholders.

Addressing Concerns

Once you have spoken to everyone, compile a list of all the feedback you received to categorize it into buckets. These buckets can be organized however you’d like, but if you need a place to start, try using billing, accounting, and practice management as a guide.

Oftentimes, the two parties that will push back the most when presented with new software are the billing team, who don’t want to change their processes, and the shareholders, who may not feel the expense is justified.

To address billing and accounting concerns, the first thing you should do is ask the team to identify any major pain points or complaints they foresee with moving to a new system. Listen to them, make sure they feel heard, and point out the benefits of the new system. In most cases, the initial change is the biggest hurdle to get past.

For the shareholders, it’s all about the value proposition. Show them the money! Highlight some of the ways the new technology stands to make your firm money, both in the long and short term. It will enable you to capture more billable hours, increase client satisfaction and referral rates, and attract top talent for a long-term competitive advantage.

Build a Requirements List

After you have collected and categorized your firm’s feedback, the next step is to create your requirements list.

A word of warning: Use what you have collected as a guideline for what your firm MUST have vs. pitting staff with opposing opinions against one another. If you carry a mindset that every feature is equal and all practice management systems are the same, you’re going to be severely disappointed. Avoid the feature comparison trap by thinking about the direction your firm is going. Ask yourself: What do I want my practice to look like in 5 years? 10 years? What do I want my interpersonal relationships with my staff to look like?

The easiest way to start building your requirements list is to list every possible feature that a practice management software could have and then begin crossing off the features your firm doesn’t need.

Looking for a list of potential features your firm should consider when researching new legal software?

Visit sites like Capterra to evaluate the customer reviews for the software options you’re considering. Many reviews on sites like Capterra will talk about specific shortcomings. Feedback from third parties who have already used the software can often prove to be just as useful as feedback from your team.

These reviews can provide you with a great snapshot of customer sentiment, but don’t look to them as a shortcut to making a final decision. Rather, use reviews to find ideas or read comments about topics or problems you haven’t thought about already.

Additionally, if you’re part of the Association of Legal Administrators (ALA) or similar professional communities, take advantage of your network to ask questions such as: What is something you wish you had asked or known ahead of time prior to buying new legal software?

Final Steps

Be aware that one of the worst things you could do for yourself is to ask a vendor to fill out the requirements list for you. Instead, you need to have that list readily available and in front of you before a live demo.

What happens if you pass your list off to a vendor? First, you’ve commoditized the software and, second, you’re letting them check things off for you. When you watch a demo, you want to be shown what is important to you and you want to see how the software works so you can determine whether or not it will align with your processes. For example, a vendor may say its software includes origination tracking functionality, but that does not mean its origination tracking feature will match your firm’s needs.

No one knows your firm or processes better than you do, so don’t overlook these details!

Timing is everything. This old adage holds true even when thinking about upgrading technology.

Maybe you’ve been on legacy software for years. Maybe you work entirely on paper. Perhaps you’re still dipping a fountain pen into an inkwell (by the way, if that’s the case – cool). Wherever you’re at, how do you know when it’s time to start evaluating new technology?

When firms begin to think about evaluating new software, two distinct mindsets come into play: reactive and proactive. Which one your firm holds will set the stage for how you kick off this process.

Reactive

For firms with a reactive approach to software purchases, one (or more) of the following primary motivations tends to drive them to reevaluate their legal technology:

Server replacement

Just like car batteries, servers don’t last forever and eventually need to be replaced.

Picture this: Your server is on the fritz but still operational. Your IT guy says it’s got six months to a year at best. Still, you hold off on any major moves and it dies unexpectedly three months later. Now, you’re looking at hours of downtime, potential loss of data, and thousands of dollars to replace it.

A reactive firm will wait until its server is at the end of its life, which forces them into making a sudden choice to either buy a new one or move everything to the cloud. Since buying and maintaining a server is such a big capital expenditure, at this point, the firm often realizes that the costs associated with replacing the server do not outweigh the benefits of upgrading to cloud-based technology.

Remote work initiatives

Investing in technology that enabled remote work used to be a proactive exercise for law firms. Now, over two years into the pandemic, many have been forced to make a reactive shift to remote work, which is now considered essential.

Remote work was an immediate necessity at the start of the pandemic, but firms are now looking for ways to evolve these arrangements, which may have been enacted hastily, to make them more efficient, seamless, and responsive. The “make it work” approach is quickly being replaced with a strategic one that identifies areas for improvement sooner rather than later.

No matter where your staff or attorneys are located, they need to have access to their work; if they don’t, your firm is going to lose money. Cloud-based technology paves the way for a more effective remote working environment.

SaaS deficiencies and consolidating systems

Many firms already use some form of cloud-based technology, but that doesn’t automatically mean they’re happy with the software they chose. Their current system could lack features that the firm needs to operate. This is the unfortunate result of poor communication with the vendor, or not being explicit enough about the firm’s needs during the initial discussions with the sales team.

Another pain point that often leads firms to switch software is how their data is distributed. If their current software doesn’t have the integrations they need to manage day-to-day tasks like document management, calendaring, and court deadline scheduling, the firm must rely on additional third-party programs. Working out of multiple systems makes it significantly harder to both run operations efficiently and utilize data effectively enough to make sound business decisions.

Imagine software that has billing features but lacks accounting functionality. In this case, firms must rely on outside technology for all of their accounting needs, leading to copious amounts of manual work, and, subsequently, more chances for human error. If you’ve ever had to enter information into multiple systems like this before, you know very well the pain we are talking about here!

Data security issues

According to the American Bar Association, 25% of all U.S. law firms have experienced at least one data breach. In other words, the risk to your firm’s information is at an all-time high.

At one point in time, cloud technology was viewed as a security hazard compared to on-premise servers. Today, however, that reality has changed. On-premise servers are at significantly greater risk for breaches because they are exposed to many more physical elements.

The easiest way to take server security off your plate is by working with a cloud-based provider. Ask yourself what you can do better to protect your firm and your clients and how you would react to a breach. The data you handle is sensitive and hackers today use sophisticated techniques to gain access to it. If you aren’t relying on companies that protect data for a living to keep yours secure, you are exposing your firm to significant risk. As soon as a security breach happens, a reactive firm is pushed to evaluate new cloud-based software.

If any of those motivations resonated with you, it is time to start looking at new legal technology while you have the leisure to do so.

Proactive

Firms with a proactive approach are intent on staying ahead of any problems and motivated by a desire to improve. Instead of waiting for issues to occur, these firms pursue action-driven solutions to maximize their operations. This road often leads them to consider cloud-based software much earlier than a reactive firm.

Maximizing cost savings/increasing revenue

If a firm’s goal is to increase revenue, the initial reflex for many is to try to hire more attorneys. But, if you leverage the right technology, you can increase revenue by capitalizing on features that allow you to capture more billable time. This can be as simple as the ability to enter time on your commute, or it can be complex like being able to instantly track and create billable events for text messages, calls, and emails as conversations occur.

On average, attorneys only capture 2.3 billable hours a day, so automatically capturing your time as it happens is the easiest way to grow your business and increase revenue without hiring more staff.

Improving client service

Your clients expect three basic things from you:

• Their information is locked up and secure.
• They are able to access that information at any time without having to jump through hoops.
• They are able to reach you.

Your firm needs to be available. No one hits the panic button faster than a client who either doesn’t feel heard or can’t quickly get the information they need. When you go with software with advantages like a client portal, you help reduce the number of client calls your staff may receive while helping your firm stand out by giving your clients a quick way to access what they need.

A client portal also helps you achieve autonomous accessibility, which has the added benefit of reducing the time you spend answering their questions.

This responsiveness can be translated into new business as well. When people are searching for representation, oftentimes, it is the firm that responds to their call or email first that wins the business. Not only are these firms setting the tone right off the bat, but they are also making the client feel prioritized – a huge factor when it comes to converting prospects into billable clients. Legal software is the best place to start if you want to improve these aspects of your client experience.

Going paperless/reducing paper

As we all learned these past couple of years, the ability to access files from any location is imperative to today’s practices. Firms that were paperless before the pandemic were able to continue their practices without missing a beat. The advantages are valuable outside of a pandemic as well. Digital case files allow your attorneys to access them wherever they are – from court, a client’s office, or home.

With all file information hosted in the cloud, firm attorneys and staff can access the files from any location with internet access.

 Improving efficiency and productivity

The bottom line: Proactive firms are motivated to meet the current state of technology. They take active steps to adopt modern solutions that may not have existed five years ago, taking note of their current pain points and strategically planning out how they can alleviate them. Generally, they set out to improve current processes, become more efficient, and implement software that allows them to be agile, grow, and develop.

What is law firm accounting?

Most law firm leaders do not enter the legal industry with an accounting background, but a basic understanding is important to inform decisions about billing processes, the acceptance of payments, and trust accounting.

Simply put, you need to know about your law firm’s financial performance. But, you also need to be able to meet your legal, regulatory, and ethical obligations, such as preparing your federal and state income tax returns and managing your clients’ money. Accounting practices enable you to prepare financial statements, capture expenses, and create budgets and forecasts. The better you understand your law firm’s finances, the easier it will be to make smart decisions for your business and avoid legal and ethical headaches.

A lot goes into navigating the world of law firm accounting. Let’s explore some of those vital components:

Choosing the Right Bank

The wrong bank could create financial complications for your firm and result in serious legal problems.

When choosing a bank, consider the following:

• Is the bank approved to handle client trust and IOLTA accounts under applicable state guidelines and regulations?
• What security and fraud protections does the bank have in place to protect firm and client funds?
• What fees and limitations are associated with the banking accounts and related credit cards, including ATM, minimum balance requirements, and transfer fees?

Law firms typically need a business checking account for the management of general business revenue, a savings account to set aside money for taxes or emergencies, and an IOLTA account for holding client funds in trust.

Some law firms also choose to open a money market account to take advantage of a higher interest-earning rate, as well as a business credit card for strategic practice growth.

The Intricacies of Trust Accounting

For law firms that hold client funds in trust, the IOLTA trust account comes with its own set of detailed accounting rules and risks. Noncompliance can result in severe penalties, so it is important to understand the complexities of trust accounting.

With so many different rules in place, it can be challenging to stay on top of all of them. Even still, some mistakes show up more often than others, with the most common stemming from these IOLTA rules:

• No commingling of trust and business account funds
• No borrowing of money from the IOLTA account
• Avoid misapplying service fees
• Keeping inaccurate records
• Maintaining adequate reconciliations

Tax Obligations

As businesses, law firms must stay on top of their federal, state, and local tax obligations. The specifics vary based on the type of practice, but most firms have a responsibility to pay the following types of taxes:

• Income taxes on law firm profits
• Payroll taxes for all firm employees
• Federal self-employment tax for attorneys who are self-employed

This is not an exhaustive list and firms may have a variety of additional tax obligations. As such, firms need a tax professional in their corner to help them navigate these vital responsibilities. For firms that do not have an accountant on staff, a contracted Certified Public Accountant (CPA) can offer valuable guidance for limiting tax liability.

Payroll

Legal time tracking is not an easy task, so law firm payroll poses challenges that do not exist within other industries. Firm members may have varied pay structures, which requires a payroll process that offers flexibility.

Payroll accounting includes components such as:

• Federal, state, and local payroll requirements
• Employee withholdings
• Reporting and depositing payroll taxes
• Disability and worker’s compensation insurance
• Employee benefits

The rise in outsourced legal work adds another layer to payroll duties. Law firms should carefully categorize employees and independent contractors for taxation purposes.

Payment Processing and Collections

Once the invoices have been sent out, law firms need processes in place to actually receive payments and manage collections. After all, there is nothing to manage if revenue is not going into the firm!

While most firms still accept cash and checks as payments from clients, online payment methods have become more common within the legal environment. This requires having a system in place to accept these payments, and the choice of provider could mean the difference between accounting success and failure.

Invoicing

Invoicing is arguably the most important part of law firm accounting, as it is the mechanism by which firms bill for the legal services they provide. Improper invoicing can have many negative consequences, including unbilled tasks, sporadic billing, and unpaid invoices.

Law firms can choose an independent legal billing system to handle invoicing tasks, but the most streamlined option incorporates legal billing into a legal practice management system. With these platforms, firms benefit from advantages such as simplified approval processes, tracked invoice changes, and the ability to process numerous types of fee arrangements.

Some legal practice management software options include extensive data reporting capabilities so firm leaders can quickly access financial reports with just a few clicks of the mouse.

Should my legal practice management software include accounting features?

There’s no doubt that your legal practice management software should include accounting features within the larger platform. In fact, this is one of the most common reasons that law firms choose to implement cloud-based software.

Legal professionals spend time tracking billables and nonbillables. Management spends time reviewing revenue statements, budgets, pricing, and law firm expenses. Billing administrators spend time generating invoices and following up on delinquent accounts. By having legal practice management software that includes both billing and accounting features, you can streamline some of the most time-intensive, manual processes at your law practice. This software also lets management review billing and accounting data within the larger context of other law firm metrics.

Legal practice management software without any billing or accounting features leaves a gaping hole that management usually needs to fill with multiple platforms. This can confuse the data and your employees, and it typically creates more work for everyone. Plus, it usually results in an added expense for the law firm.

What are the most important features that law firm accounting software should have?

As you’ve probably gained from this post, law firm accounting can be challenging. But, it doesn’t have to be another headache on top of the stresses of your law practice.

The first step is to put down the pencil and paper - or even the Excel spreadsheet. If you want to get really serious about your accounting, you need to ditch small business accounting platforms, like QuickBooks that aren’t designed specifically to meet small law firms’ needs.

You need a legal practice management platform that includes full billing and accounting capabilities, making sure that you’re able to track every last penny and satisfy your ethical obligations to your clients. To find a tool that’s able to resolve your biggest accounting challenges and meet your firm’s needs, look for a platform that is equipped with the following accounting features:

Organize the chart of accounts and trust accounting

Given the number of financial accounts in a law firm’s financial ledger and the potential number of firm clients, it can be daunting to track them all in a standard bookkeeping system. Law firms must track assets, retainers, receivables, revenue, equity, expenses, and much more. A centralized repository that puts all of your bank accounts, operating accounts, and related information at your fingertips in real-time is essential.

Every lawyer knows that closely managing client trust accounts is an integral part of ethical (and legal) law firm billing. Billing and accounting software must be able to effectively manage lawyer trust accounts that hold clients’ funds before they are earned. This includes tracking interest-bearing accounts (IOLTA) and three-way reconciliation with the asset sheet, trust asset account, and trust liability account.

Facilitate timekeeping and billable hours

Legal accounting and billing software must be able to accurately track billable hours and support LEDES e-billing practices. It’s even better if the software has features to automatically detect timekeepers’ billable hours, such as the ability to capture time for appointments or communications sent through the same platform.

Support flexible fee arrangements

Some law offices use flexible fee arrangements, depending on the client or type of case. To be effective, the accounting software should recognize various fee arrangements like fixed fees, contingent fees, and subscription-based payments.

Generate automatic invoices and payment collection

Generating invoices and collecting payments is one of the most time-consuming parts of legal billing. Software that can automate the billing process by automating and sending invoices to clients, facilitate edits and changes to bills directly within the system, and collect credit card payments through a secure system will cut down on the time that administrative staff spends on billing.

Prepare Billing and Accounting Reports

It’s important for billing and accounting software to synthesize data and generate reports that give law firm management insights into the efficacy of billing procedures. These reports may include billable and nonbillable hours per timekeeper, client, or case as well as measures of attorney profitability.

Track expenses

Law firm billing and accounting are important because they tie directly to the financial success of the business. Legal practice management software must be able to track metrics related to big-picture finances like expenses, overhead, and cash flow so that management can pinpoint areas of success and opportunities for improvement.

Provide customizable features

Perhaps the most important feature of legal billing software is that it can be customized to support your unique business goals. For example, a legal billing solution might offer add-ons like billing templates, an app, a customizable dashboard to track relevant billing and accounting metrics, or the ability to create one-of-a-kind financial reports.

Features like these can make the difference between an inefficient accounting process that’s prone to errors and bookkeeping and accounting systems that run like clockwork, enabling you to meet your ethical obligations and client trust account reporting requirements.

Takeaway

Mastering law firm accounting is no easy feat. However, the right legal accounting software can help you streamline these critical accounting functions.

If you keep the above components in mind and put them into practice, you’ll be well on your way to navigating your firm’s finances successfully and without penalty.

Table of contents

What is legal workflow?

Process vs. automation vs. workflow

Benefits of workflow in a law firm

Areas workflow can be used in a law firm

Types of workflows found in legal practice management software

Legal practice management software that includes workflow

How to implement workflow software

What if we told you about a technology that would relieve 50% of the administrative burden from your legal operations professionals... would you be interested in hearing what we had to say?

Of course you would!

That’s why many in the legal tech community have become fascinated by workflow technology. For many attorneys, finding tools to free up more time to bill is essential to growing their practice. Based on a recent report, law offices responded that they spent 40% of their time on administrative or manual tasks.

In this blog, we’ll introduce you to workflow, explain what workflow is, some of its benefits, and the different workflow tools available in legal practice management software to help you streamline your law firm.

What is legal workflow?

If we go back to the basics, workflow itself is defined as the sequence of industrial, administrative, or other processes through which a piece of work passes from initiation to completion.

Process vs. automation vs. workflow

Process, automation, and workflow are terms you’ll hear people refer to as synonyms or married together such as “workflow automation” or “process automation”.

Though they sound similar, the three terms refer to different things:

• Process refers to the act of defining a series of steps to reach a desired outcome or goal.
• Automation is the use of technology to complete otherwise tasks.
• Workflow brings manual processes 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, if you’re trying to improve your client intake, here’s how each term would be defined:

Process:

A prospective client contacts the website > someone from the firm contacts the prospective client > an initial consultation is scheduled > an attorney meets with the prospective client

Automation:

A webform populates a database, a personalized email is created and sent from information stored in the database and a document is automatically generated based on information stored in the database.

Workflow:

• 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 emailed to the prospective client thanking them and letting them know someone from the firm will be in touch with them shortly AND a task is created and assigned to the firm administrator to contact the potential client.
• Firm administrator contacts the prospective client and then completes the task, updating the potential client status to “initial consult scheduled” AND the system generates a merged fee agreement letter.

Benefits of workflow in a law firm

For many law firms, workflow can be a game-changer by creating structure and efficiencies within their practice.

Although the list is long, here are some of the most important benefits workflow processes can bring to a law firm:

• Free up time to bill: Workflow can take over a lot of your administrative load freeing up more time for your attorneys to focus on billable work.
• Clean database: It’s common to hear a law firm say their practice management database is a mess. If you’re using workflow, the system can keep records up to date so your staff doesn’t have to manually do it.
• Make your small law firm feel big: Building out your process into a workflow software will increase your staff efficiency, allowing you to accomplish more with less staff.
• Speed up onboarding staff: If you use workflow correctly, staff will be walked through different processes and prompted to enter important information. This means less training upfront for new hires because your staff has less to remember or be trained on.

Areas workflow can be used in a law firm

Workflow can be used in any area of your practice that requires administrative work but the majority of the legal practice management programs will focus on automating one of three areas:

Intake

74% of all legal consumers visit a law firm’s website to first take action. This means if your firm has a high volume of website form submissions you need a process for managing your pipeline.

Today, many firms receive an automated email from their website’s form tool with the prospective client’s information, but that doesn’t get the information into your case management software to begin managing the intake process.

These days, most legal technology offers workflow tools to help you manage your intake.

This includes sending personalized response emails out once someone contacts the firm, scheduling follow-up tasks, merging new client agreement documents, or keeping the status of the potential client updated.

Matter

If your firm deals with a high volume of matters, such as an insurance defense or personal injury firm, workflow within matter management software can be used to help you juggle all the balls in the air.

On a matter, you can use workflow to do things such as schedule follow-up tasks if a member of your staff hasn’t touched a matter within a certain number of days, automatically email updates to clients or generate/email medical records requests for you with the click of a button.

Billing

Using workflow to manage the pre-bill process and collections can help dramatically improve cash flow.

Pre-bills

For pre-bills, workflow can flow the pre-bill through an electronic approval process. If your firm requires the associate then responsible attorney to review a pre-bill before posting it, the workflow can move the bill from one person’s approval list to the next, before finally updating the status once all the approvals are completed. Your billing team can then receive a notification that the bill is ready to post and send out.

Collections

Collections are another pain point for a lot of law firms. It requires the staff to constantly manually send out reminders to your clients. With workflow, you can have reminders automatically sent out to your client once a bill is overdue and continue sending the emails until the balance is paid off.

Types of workflows found in legal practice management software

Task workflow

If you work with a team, there is a good chance that you assign tasks to different staff members at different stages of a case.

Think about when you open a new case. If you don’t have activity workflow, you either:

• Manually assign tasks to your staff.
• You send an email out to inform your staff of a new matter and everyone hopefully remembers their tasks.
• You do everything yourself.

This can be automated using a calendaring workflow within practice management software.

Some legal practice management programs will let you create prebuilt lists of tasks and then quickly assign them out.

Other programs will automatically assign tasks to different staff members you’ve designed once a matter is open.

Or finally, programs will give you a list of tasks and let you fill in the staff you want to complete the task.

This is helpful to any firm, but especially to firms that have a high volume of cases, new potential clients contacting the firm, or if you have a high staff to attorney ratio on your team.

Appointment workflow

Similar to tasks, many firms have a set of internal deadlines or meetings they want to schedule once a new case is opened or reaches a certain stage.

For many firms, this requires a paralegal or assistant to manually calculate relative dates based on a certain deadline. It’s time-consuming and error-prone.

Many legal practice management software programs have a feature built in to solve this problem.

The technical term for this feature is chain calendar events. These are all appointments with relative dates based on a trigger date such as “date of trial.”

This isn’t to be confused with a scheduling order designed by the courts but rather, a list of internal deadlines.

Automated workflow

Automated workflow expands beyond activities and allows you to flowchart your processes into software automation. This type of workflow will keep your case status up to date and offer your staff different options based on the process you’ve defined for that stage of a case.

Your process for opening a new matter might look like this:

1. Run a conflict check.
2. Send then receive the engagement letter from the client.
3. Open the matter in your practice management software and send out the initial retainer bill.
4. Collect the retainer from the client.
5. Set up an initial meeting with the client.

Throughout this process, your system could use workflow to take the burden off your staff by automatically merging the engagement letter, sending out an emailed retainer bill to the client, and even opening the matter file in your system.

With workflow, the software will bring you down the path you set up and automate certain tasks, but your staff will still be required to prompt the software to move to the next stage by marking tasks as complete or clicking on the next step.

Advanced automated workflow

Advanced automated workflow is like having a robot assistant.

The difference between automated workflow and advanced automated workflow is in an advanced automated workflow, your staff doesn’t have to click a button to make something happen.

Advanced automated workflow can be triggered by the creation of a record, updates to a record, or queries.

Your possibilities become endless with advanced automated workflow, but it does require the most setup.

Legal practice management software that includes workflow

ActionStep

ActionStep is a cloud-based, legal practice management and billing and accounting software. Within ActionStep, you’re able to build a matter-centric automated workflow.

Their tool lets you create different workflows based on the type of matter. The individual workflows are broken into linear stages of a case. Once a matter is moved into a certain phase of the case by a staff member, the workflow can perform tasks such as generating appointments/tasks, creating merged documents, or sending emails.

ActionStep also allows you to purchase prebuilt practice packs that have already been set up for you if you want to plug in and go.

Centerbase

Centerbase is a cloud-based, legal accounting, billing, and practice management software. Within Centerbase, you’re able to build advanced automated workflows on any record type.

Each step of a workflow can automatically or manually trigger different events to occur such as creating a record, updating a field, merging a document, sending an email, or creating a calendar appointment/task. Workflows in Centerbase are not linear, they instead let you move throughout the workflow based on your needs.

Clio

Clio is a cloud-based, legal practice management and billing software. Within Clio, you’re able to create intake workflows.

Clio’s intake workflow allows you to create forms for clients to fill out. Once the form is submitted, internal tasks can be assigned and personalized emails can be sent to the prospective client.

Rocket Matter

Rocket Matter is a cloud-based, legal practice management and billing software. Within Rocket Matter, you’re able to create calendaring workflows on matters, based on status updates. These workflows can create tasks assigned to different members of your staff or the workflow can create calendar appointments based on relative dates.

Zapier

As Zapier put it, they’re “the glue that connects thousands of apps.” Their software is used to connect different applications in your technology stack, based on certain events occurring. If you’re using different siloed programs within your firm, this is a great option to integrate your processes and curb duplicate entry.

For instance, if you enter a new potential client in your practice management software, Zapier can create a task in your task management software for someone to follow up and add that contact to a specific marketing bucket within your email marketing software.

How to implement workflow software

As soon as you pick a workflow tool, it's natural to want to get started right away.

However, it may be beneficial to take a slower approach to implement your new process automation tool. If you’re implementing a new practice management software that includes workflow tools, get into the software first before you start designing workflows.

By delaying your workflow implementation, you’re able to better understand how the new software works. Many firms jump right into implementing workflow by designing their workflow process around how their previous software worked, which in turn makes the workflow effective.

Another common recommendation is to build your workflow out in pieces. Start small, use what you’ve built for a few weeks and continue to build from there. It’s common for a flow to sound good during implementation but isn’t practical once you begin using it. If you build your workflow out in pieces, it’s easier to tweak these changes as they come up.

Finally, if you’re new to workflow, work with a legal consultant. There are many in the industry that have spent their careers helping law firms implement workflows and can guide you through designing the right workflow for your firm’s processes.

As a lawyer, you’re no stranger to legal research and analytics. Data drives your practice and law firm as you review dockets, draft briefs, search SEC filings, and find deeds. But is your firm intelligently conducting research on and reviewing the analytics related to its bottom line? If not, it’s time to get started.

Your law firm likely already has some kind of reporting system, or at least a CRM, in place. The question to ask yourself now is whether your system is working and whether you’re taking full advantage of and properly reviewing all the data it produces. By putting the right tools and systems in place, your law firm and its administrators can have aggregated key performance indicators (KPIs) on important data at their fingertips. Reporting and legal analytics will give your law firm real-time, actionable insights into your productivity and profitability.

We understand that these concepts may be new to you. That’s why this article offers helpful tips that will help your firm maximize the value of your law firm data with the right legal analytics tools.

What is legal analytics?

Legal analytics is the process of collecting, organizing, and then applying data to the practice and business of law. The goal is to use the data you have to make more informed decisions that enable you to better manage your firm’s performance.

With the right analytical tools, your law firm can assess its own data and numbers to create helpful reports on all aspects of its business model and then take actionable steps to streamline workflows and increase its profitability. In sum, data analysis is a magic wand that can help your legal practice sort through the chaos and drive toward better performance.

How can analytics give my law firm a competitive edge?

Analytics gives your firm a competitive edge because you’ll be able to unlock the value within your data and gather business intelligence that you otherwise wouldn’t have. Your administrators will be given that magic wand to help maintain, improve and, if needed, transform your law firm.

For example, legal analytics can help you, your law firm, and your legal professionals and administrators forecast the ebb and flow of certain matters, strategize financially based on facts, and manage internal resources and teams more intelligently. You can view user-friendly data visualizations that graphically represent billable hours, money going in and out, and invoices.

We already know your next question. This all sounds great, but how does it apply practically to the nuts and bolts of my law firm’s practice and operations?

How can law firms use legal analytics and reporting?

Legal reporting software offers adaptive, real-time reports. Basic data points for legal reporting include billing, accounting, productivity, and compensation.

Through reporting and analytics, your law firm will be able to identify, for example, its highest paying clients and matters, figure out where the money is being made and where it’s being lost, manage staffing and track lawyers’ billable hours, ensure accuracy in origination credit and compensation matters, and use other raw data points to build complex spreadsheets and pivot tables to aid your firm’s decision making.

This translates to using legal analytics and reporting to set pricing, stick to realistic financial performance standards and targets, make informed hiring and employment decisions by knowing which specialty groups are growing and need more help and which are falling behind, track key client relationships, and allocate resources between departments appropriately. Financial reporting helps your firm reduce risk and identify cost-saving opportunities.

By reviewing internal data and creating customized reporting, law firms can use analytics in nearly all of their day-to-day operations, improving their profitability and functioning in both the short term and long term.

What types of reports should my law firm be running?

Each law firm has unique needs. A real estate boutique will need something different than a large litigation firm, and the types of reports run will vary based on those individual needs (and also show why customization is so very helpful).

Below is a list of examples of the types of reports your firm should consider when building out your reporting structure across all departments and practice specialties. For more detailed information regarding what these reports include and how often to run them, check out our legal analytics and reporting guide.

• Billing and accounting: These reports provide a detailed look at your firm’s finances, including cash flow and other assets. Given that the longevity of your firm hinges on its financial position, paying close attention to what these reports have to say is pivotal. Law firms must know whether they are cash positive as well as whether business expenditures are benefitting or hurting their bottom line. With regular financial reporting, your firm can track important value metrics, including bank account journals, accounts payable, accounts receivable, timekeeper and matter budgets, and bank reconciliations. Keeping close weekly, monthly, or yearly tabs on these matters can make or break your firm.
• Firm productivity: Lawyers are a firm’s biggest asset, and monitoring their productivity and efficiency is important. Your law firm should proactively track billable hours, and reporting will help you do that intelligently and objectively. In addition to monitoring straight billable hours, reporting and data analytics will also help your firm keep tabs on nonbillable hours, timekeeping procedures, matter timelines, billing processes, attorney profitability, and matter origination and production. These issues matter to law firms and their employees alike. Reporting can help you track performance for yearly bonuses and ensure the retention of your firm’s key talent and high billers. All of the above will aid your firm in promoting efficiency, finding cost savings, and maximizing profitability.
• Law firm marketing and business development: Intelligent business development and marketing efforts are the future, and reporting and analytics can help your firm get there. Many law firms spend substantial amounts of money on their marketing strategies and campaigns without collecting, retaining, or analyzing any data on effectiveness. Your firm’s long-term growth is intrinsically tied to gaining new clients, which itself is tied to marketing and business development. 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. Monitoring this data will empower administrators to evaluate which approaches are working and which should be adjusted.
• Practice area performance: Law firms have learned a lot from COVID, including that they must be malleable and able to evolve. Many firms started new practice areas in response to pandemic-related market changes, including health, employment, and bankruptcy. Your law firm should review the performance of its practice areas at least annually (and ideally quarterly) to determine their profitability levels. Reporting can help your firm review both internal and external data to make these determinations and help guide your firm’s practice of law.
• Custom reporting: Building custom reports is a powerful skill. With customized reporting, your law firm can create financial, calendar, matter, and client reports specific to its business and key functions. Your administrators will feel empowered to combine and review raw data to build new spreadsheets and tables, leading to specific, actionable insights.

Legal analytics and reporting can support your law firm’s financial success

The right reporting and analytics will help your law firm administrators evaluate the health of your firm. They must be able to identify KPIs that speak specifically to the firm’s unique needs and determine how often these metrics should be monitored: weekly, monthly, quarterly, or annually. Firm leaders will be empowered to make more strategic decisions because they’ll know just where the firm can and should grow and where it should scale back.

Legal reporting and analytics will undoubtedly help your law firm optimize its performance. Choosing smart legal analytics solutions and reporting tools makes it easy to develop a competitive advantage and keep your firm running smoothly all year long.

Once you implement the right analytics tools, you’ll find your firm is running smoothly and efficiently. To accelerate your progress, download our legal analytics and reporting guide, which will give you a deep dive into different types of reporting so you can choose the right reporting options for your firm.

It has been a challenging couple of years for the legal industry, requiring law firms to make unprecedented administrative shifts.

For many firms, business interruptions resulted in financial challenges that left leaders hesitant to invest in additional technologies. Far too many uncertainties remain and leaders recognize a need to be cautious with spending decisions.

Even with this reluctance, you can leverage legal technologies to your advantage by taking a critical look at your current usage and assessing what will be needed in the foreseeable future.

Every firm, regardless of size, can maximize its current technologies, but it takes strategy and analysis to make that happen. With evaluation, training, identification, and planning, you can get the most out of your current systems.

Evaluation

The first step for maximizing your current law firm technology is an evaluation of existing systems and how they are benefitting your firm.

Many firms implement technologies with a “set-it-and-forget-it” mentality without an ongoing evaluation of utilization, but important questions need to be asked on a regular basis, such as:

• Are all features being utilized? 

Technologies like legal practice management and legal billing software offer users a variety of features related to various aspects of law firm management. They also routinely introduce new features as innovations develop. One legal practice management software may include more than 20 features relating to everything from timekeeping to document management. With so many options, it's quite possible that many law firms only use a portion of what these platforms have to offer.

You should review each of your current technologies and their individual features. That information should then be compared with your firm’s needs to ensure that each technology is being utilized to its fullest potential. Upon doing so, administrators may ultimately find no use for additional technologies.

• Are staff members adequately utilizing technologies? 

Another boundary to maximizing current legal technologies is a lack of usage among law firm personnel. There can be any number of reasons behind these discrepancies, including a lack of proper training, discomfort with new technologies, or an unwillingness to change traditional processes. Whatever the cause, firms can maximize current technologies by identifying usage obstacles and addressing them.

• Which technologies can be eliminated? 

A technology analysis may reveal that some platforms are no longer vital to a law firm’s success. For instance, a recently implemented software may offer a feature that law firms once relied upon another platform to provide, making the older software no longer necessary.

Analysis may also reveal that a firm is still paying for technology acquired years ago even though it is no longer being utilized by firm members. This may occur because payments are automated or the firm administrator may routinely approve payment with no knowledge that staff members have stopped using the system.

Under both of these circumstances, firms may be able to find substantial financial savings by leveraging the most useful software and ending subscriptions for unnecessary platforms.

Training

Inadequate training creates another impediment to maximizing legal technologies. Employees cannot effectively use technologies if they do not understand how to navigate them. Law firms need systems to evaluate the employee skill base for each of its technologies. When deficiencies are identified, a training strategy should be implemented that addresses the need in a way that empowers employees to leverage technologies.

One of the first determinations that a firm administrator should make is from what source the training will commence. That includes who will conduct the training, the time commitment, and how much money will be allocated. The most cost-effective and timely resources for employee training are often found with the technology provider, where employee training programs may be included within the subscription packages. This is a useful resource for training staff members on a specific technology platform.

Training takes time and, especially in a law firm setting, time is a precious commodity. Administrators need to determine how much time will be set aside for necessary training, as well as how it will be managed among employees. Firms must be cognizant of their members’ already-full plates and develop a training schedule that does not overwhelm employees. Details such as training techniques and rollout methods should also be considered under the training umbrella.

The final consideration for the training piece is the cost of the training. Firms must recognize this expenditure as a necessary expense for maximizing current technologies. It is an investment in the firm’s growth that pays off with greater efficiency and increased productivity.

Identification

Part of assessing current technologies is identifying trouble spots that may be getting in the way of full maximization. The problem may lie in employee training, but the following impediments may also be at play:

• Employee technology resistance – Particularly within a traditional law firm setting, some firm employees may resist the usage of technology when performing firm tasks. They prefer to use methods they are more accustomed to and may even feel intimidated by technology. To address this obstacle, law firms need to implement guidelines for tech usage and strategies for overcoming this resistance. Less traditional approaches like peer-to-peer training and usage incentives can motivate employees to utilize current technologies.
• Inadequate platforms – Law firm administrators may find that the firm’s more recent technology acquisitions do not synergize with legacy systems that are also in place. These compatibility issues can actually get in the way of efficiency instead of supporting it, especially if some firm members are using the newer platform while other firm members prefer the legacy system. Legal technology is a marathon, not a sprint. As new innovations are developed, firms may find that systems relied upon for generations can no longer meet current legal tech needs. Part of maximizing current technologies is recognizing when a current platform prevents greater efficiency instead of supporting it.
• Fear of technology – Administrators also experience a general law firm culture that resists technology out of fears or beliefs. Some firm leaders worry that innovations like automation may replace the need for actual attorneys. They fail to recognize how legal technologies can enhance the practice of law. Instead, they see it as a threat to the profession.

Firm administrators should acknowledge these concerns and find ways to address them. Messaging is key when dealing with this type of pushback. Leaders need to understand the benefits of legal technology and how it can better position the firm for financial success.

Planning for Future Needs

After completing a detailed assessment of current technologies, you will have a more accurate view of your firm’s needs moving forward. You may determine that weaknesses identified during the analysis are best handled through new technologies, or law firm forecasting may demonstrate a future need that will require a different tech specialty.

Armed with the information gathered from evaluation, training, and identification, you can thoughtfully plan and make decisions about moving forward while also maximizing the firm’s current technical resources.

The billing department is the lifeline of a law firm, ensuring that the practice effectively bills and collects compensation for services rendered. Its reach extends from the time tracking phase to reporting on key financial metrics. If the billing department proves unsuccessful at fulfilling its duties, the entire firm may suffer fiscal losses, including inadequate cash flow and an inability to manage overhead costs.

Law firm billing departments typically have two major goals in mind. One is to streamline the invoicing process, so that timekeeping administrators can spend more hours on billable client tasks. The other is maximizing billing accuracy to promote timely payments and reduce client disputes.

Unfortunately, three common challenges may get in the way of these goals:

1. Billing departments often lack the level of skill and functionality necessary for effective invoicing because billing experience can be spread throughout the firm. The billing department may have some limited expertise, as well as the administration and some of the attorneys. Even the highest level of experience can be useless when it's scattered and disorganized.
2. Inadequate billing technologies lack the necessary tools and structures that firms need to maintain an invoicing process that meets the needs of their most sophisticated clients. Law firm billing departments require resources that match or exceed the demands made by their clientele. Particularly for firms working with corporate or third-party billing clients, comprehensive technology is vital.
3. E-billing is still a relatively new concept for some law firms, requiring a level of knowledge that many firm members have not previously acquired. Therefore, billing departments are constantly seeking ways to strengthen critical skills and keep their staff members up-to-date with new technologies.

Practice management software can play a significant role in helping law firm billing departments overcome their challenges and meet firm goals. Keep reading to learn how.

Maximizing Department Manpower

Many law firm billing departments rely solely on a limited number of people to manage the entire invoicing process - from time tracking to invoicing and payment collections. If that handful of people becomes overwhelmed or unable to fulfill essential tasks, the entire invoicing process can suffer, creating a financial risk for the firm. This type of narrow setup is also vulnerable to personnel changes. The separation of even one member of the billing department could mean that a vital piece of the billing machine grinds to a halt.

Law firms cannot afford to trust such an important, business-critical process to only a couple of employees without safeguards in place that standardize the processes so that they can be learned and applied by other members of the firm when necessary. Tools like automation and e-billing help law firms create a systematic process that can be understood by managing partners and administrators, as well as easily taught to new members of the billing team.

Practice management software provides law firm billing departments the level of flexibility they need to maximize even the most limited staffing capabilities. It provides mechanisms for simplifying processes, eliminating the need for multiple software services, and systematically managing department tasks. Once firms set their billing processes in place using practice management software, they can ensure that their billing processes will successfully proceed, no matter what changes or limitations may occur within the billing department.

Improve Billing & Accounting Efficiency

Law firm billing departments take on a variety of responsibilities under the watchful eyes of firm managers, partners, and administrators. After all, every single firm member relies on the billing department to ensure that money earned translates into actual revenue (and payroll). With such high stakes, billing departments need streamlined processes that result in timely and complete collections.

Practice management software assists with this goal in a number of ways:

• Easy implementation of multiple billing arrangements – Law firm billing departments need to easily move between multiple billing options, including traditional hourly billing, flat fee arrangements, payment plans, and split billing.
• Streamlined client expense entry – Billing departments save a significant amount of time by billing client expenses as they enter vendor bills, write checks, or review credit card statements.
• Payment processor integrations – Software integration with LawPay helps billing departments easily accept payments. With some practice management software, payments made through LawPay are automatically entered into billing and accounting modules.
• Simplified payment options – Clients prefer convenient and simple payment options. Tools like billing portals make it easier for clients to make payments faster. They also make it easier for members of the billing team to process payments received.
• E-Billing file capabilities – Billing departments can quickly generate .txt files for compliant submission to audit houses. Automation and customization eliminate the need for manual edits.
• Efficient pre-bill approvals – Streamlined approval processes allow pre-bill reviewers to effortlessly edit prebills, alleviating the need for billing teams to enter changes before posting bills.
• One-click emailing options – Billing departments can avoid the nuisance of making manual edits with features that allow for billing emails to be sent with a single click.

Another huge benefit of practice management software is the inclusion of trust accounting resources. Trust accounting is one of the most important law firm billing department duties. Inadequate practices can place firms at risk of potential ethical violations, but the right tools help billing teams handle trust accounting accurately and in compliance with jurisdictional requirements.

Legal practice management platforms offer all of these billing and accounting solutions in cloud-based software, which provides a level of remote accessibility that has become absolutely essential within today’s law firm environment. When unexpected business interruptions occur, law firm billing departments need the ability to continue invoicing and collecting payments. Cloud-based practice management makes that happen.

Accessing Billing Data

Law firm administrators and partners want detailed billing data that helps them keep a pulse on the fiscal health of the firm. Without this information, they cannot make informed decisions about the firm’s direction. Legal practice management software helps billing departments generate the reports that the partners need.

It only takes a few clicks to generate data-specific matters, practice areas, or the general ledger. Year-over-year reporting provides detailed comparisons between current and past years, while month-over-month reporting offers shorter timeframe reviews.

Practice management software allows law firm billing departments to customize their reporting and generate data sets relating to:

• Budgeting – Reporting plays an important role in law firm budgeting. Managers and administrators need concrete data when strategizing about the firm’s future.
• Client assessments – partners and administrators want to know which clients generate the most billable activity, as well as which clients have outstanding invoices.
• Timekeeper assessments – The billing department can also generate reports that provide details about the performance of individual timekeepers, so firm leaders can reward or correct as needed.

With comprehensive reporting, partners and law firm administrators can gain deep insights into a variety of additional firm details, including average hourly rates, budget compliance, law firm efficiency, and more. The modern e-billing solutions of practice management software give billing departments the ability to extract rich data from invoices and generate detailed reports that would otherwise take an inefficiently unreasonable amount of time.

Legal Practice Management Lessens the Workload of Billing Departments so Law Firms Get Paid Faster

The expansive responsibilities placed on law firm billing departments necessitate a system that streamlines processes and promotes maximum efficiency. Legal practice management software provides the features that improve processes and drive law firm revenues.

The dictionary defines real estate as property comprised of land and/or buildings. Just as that broad definition can include various types of transactions, the practice of real estate law encompasses a variety of different matters. While some real estate attorneys primarily focus on litigation cases, others may spend the majority of their time negotiating land sale contracts. These variations make customizable legal practice management features a must for real estate law firms.

A Look Inside Real Estate Legal Matters

There is a lot to consider when it comes to real estate law, including land use, purchase, rental, and compliance issues. To get a better feel for this expansive practice area, let’s take closer look at some specific real estate practice areas:

Residential Real Estate Transactions

These matters center around the sale of single-family homes between individuals or families. Attorneys working in this area tend to focus on assisting home buyers and sellers through the transactional process of buying or selling a home. They may also represent client interests when disputes arise over contracts, titles, financing, permits, or zoning.

Commercial Real Estate Transactions

These matters focus on the sale, rental, and purchase of commercial properties. They include issues related to contract review and drafting, construction and buildout, land use, easements, and restrictions. Commercial real estate attorneys may also offer advisement about financing issues.

Property Management

These matters may involve residential or commercial properties. Law firms usually represent the property owner and assist with conflicts over nonpayment of rent, lease term violations, and property use. Property management law firms may routinely appear in court for eviction or nonpayment procedures.

Agricultural Real Estate Transactions

These cases generally involve commercial or small family operations that are primarily used for agricultural needs. Attorneys working in this practice area may provide legal counsel to farmers and other businesses working in production agriculture or other farm operations.

Green Real Estate

This emerging area of real estate law reaches the residential and commercial sectors. Attorneys may focus on environmental issues related to contaminated land, or environmental restrictions, real estate cleanup, and the protection of buyers and sellers.

Collaboration Within Real Estate Law

A single real estate matter may have numerous components. For this reason, real estate firms may organize their cases into projects, where attorneys and support staff work on teams to handle matters in a more efficient manner. When promoting a collaborative working environment, law firms need practice management features that support communication and help keep everyone on the same page. Here are some of those features:

1. Workflow automation

With workflow automation, law firms can better organize and manage the most complex real estate cases. Workflow refers to the individual steps that go into the completion of a legal matter from beginning to end. When law firms attempt to manage workflows manually, they often end up wasting valuable time and fostering inefficiencies within the practice.

Many practice management platforms include workforce automation solutions. These features help law firms streamline the complexities of real estate matters. From purchase offers to escrow details, automation tools assist with the assembly of relevant documents, the management of closing dates, and the successful completion of real estate matters.

Real estate law firms benefit from workflow automation through the minimization of errors and reduction of risk, data collection and reporting capabilities, and opportunities for continuous workflow improvements.

2. Document management

When law firm team members work in various locations, and at different times, they need the ability to collaborate remotely on documents, contracts, and forms. Cloud-based practice management systems typically offer document management tools that allow members to access and work on documents from virtually any location with unlimited data storage.

Real estate often involves vast and frequent negotiations. Attorneys need to see all matter details in one centralized location so they can create notes, track various versions, and share documents internally or externally, when appropriate.

Quick document search tools save time by making it easy to search databases and documents for specific details. Real estate lawyers can quickly locate a variety of documents, including such items as disclosure agreements, purchase contracts, or inspection certificates.

With the complexities of their matters, real estate law firms must have tools that help them organize, edit, and maintain all relevant documents.

3. Calendaring

Real estate transactions typically involve numerous deadlines and important dates. There may be mediation appointments, contractual targets, court appearances, or scheduled closings. A comprehensive calendaring system helps real estate law firm administrators keep everyone informed and on track to meet all matter deadlines, from an individual attorney to an entire project team.

Features like automated notifications and secured client portals also help real estate firms keep clients informed about upcoming events and deadlines. These tools allow attorneys to spend more time on profitable tasks while meeting their professional duty to keep clients in the loop.

4. Managing Billing and Client Funds

Real estate law firms may offer their clients any number of payment structures and arrangements. From flat fee options for simple contractual sales to hourly billing options that require client retainers. Firms need legal billing systems that can handle these variations and promote the efficiency of invoicing procedures.

• Robust legal accounting helps real estate law firm leaders easily review their firm’s financial standing, as well transactional histories. Whether a firm member needs to assess all transactions from a particular quarter, or they need to access a detailed AR report, with an effective legal practice management software, these accounting tasks can be handled quickly and easily.
• Real estate law firms may hold client funds in escrow during the purchase process, so practices need effective tools for managing escrow funds and tracking multiple IOLTA bank accounts. From the beginning of representation through to the closing, the firm needs the ability to track and document all movement of funds into and out of these accounts.
• For a large real estate law firm, billing and invoicing can consistently take up an unreasonable amount of time - time that could be better spent on billable matter tasks. A comprehensive legal billing system allows firm members to efficiently handle the invoicing process. They can quickly choose line items to include in a bill, streamline the approval process, and easily get customized invoices out to firm clients.

Whether the firm is billing with a flat fee for a simple matter or through a retainer arrangement for more complex cases, real estate law practices need to ability to customize the billing systems quickly and easily in a way that efficiently addresses these billing options. They need a legal practice management system that can manage them all.

The Takeaway

Real estate law includes a wide range of specialties, from residential sales to multi-million-dollar commercial transactions. To be consistently successful, real estate law firms need practice management tools that can be tailored to the specific needs of these complex undertakings.

Complex client demands and frequent policy changes drive the priorities of an insurance defense law firm, particularly in the areas of administrative and matter processes. Handling these challenges requires comprehensive legal practice management software that offers the features necessary to successfully handle all the pressure points of insurance defense legal practice.

This post will delve into some of those issues and suggest how the right software features can help firm attorneys and administrators effectively address them.

The Unique Challenges of Insurance Defense Law

Insurance defense generally involves the representation of various legal matters related to the insurance industry. In more specific terms, these firms are retained by insurance companies to represent their insured clients who face lawsuits related to their insurance contracts. For instance, an insured restaurant owner is sued by a customer who allegedly slipped and fell inside of the restaurant. The insurance company hires the law firm to represent the restaurant owner.

While this may seem like a pretty straightforward legal arrangement, it can quickly become complicated because of the three-sided relationship that exists. Unlike other practice areas where attorneys typically further the interests of one easily identifiable client, insurance defense attorneys are forced to balance their responsibilities to the insured with their responsibilities to the insurance company.

This situation begs the question, “Who is the client?” The insurance company pays the legal fees for representation, but the firm has a professional responsibility to the insured. Oftentimes, the interests of the insurance company differ from the interests of the policyholder, leaving the law firm in the middle of the conflict. Faced with these unique challenges, in addition to standard administrative and client tasks, insurance defense law firms need specialized tools that will help them manage complex matters while maximizing productivity and promoting profitability.

Billing Tools

Billing poses a challenge to insurance defense practices due to the variety of specific guidelines and restrictions that insurance companies may place on invoicing processes. For example, insurance defense law firms may be forced to contend with restricted billing rates or fixed fee billing arrangement requirements. These types of constraints make efficient billing processes extremely important.

When working with numerous insurance companies, an insurance defense firm may need to navigate numerous billing arrangements. One insurance client may require the firm to work under a fixed fee arrangement, while another may allow for traditional hourly billing. These variations require a legal billing platform where firms can easily invoice for a variety of arrangements by customizing billing options for each individual matter.

Insurance companies often require law firms to use Legal Electronic Data Exchange Standard (LEDES) invoicing codes, which can be a difficult task without the right legal billing software in place. This type of billing is primarily used to promote uniformity within the legal industry and assist insurance companies in their processing of law firm invoices. Insurance defense law firms need systems that offer the ability to easily generate LEDES invoices in .dat or .txt file formats for proper online submission. They should also have UTBMS codes already in place and LEDES formatted templates for faster invoicing.

Document Management & Automation

It is not unusual for a single insurance defense matter to include volumes of documents. From medical records and witness statements to policy documents and insurance company communications, these case files can be quite extensive. This is why insurance defense firms need document management software that helps them easily store and organize all matter-related files and documents in one central location.

With the right software, credentialed users can efficiently view, edit, and share documents as needed. This makes collaboration internally within the firm, as well as externally with the insurance company, much easier to accomplish. Some other useful document management tools include:

• The customization of folders and sub-folders
• The ability to lock files for the prevention of alterations or updates
• Secure sending of documents through a client portal
• Tools for clients to securely upload documents
• Creation of document templates
• Document version tracking

Using a legal practice management software that integrates with a cloud-based document management system, like NetDocuments, allows insurance defense law firms to organize, secure, and find all of the documents they need right from the practice management platform.

Case Management

The intricacies of insurance defense law require a superior matter management system that tracks every aspect of these complex cases. When choosing a legal practice management system, law firm administrators need to look for features that address the specific needs of their practice area, such as:

• Matter layouts that offer customizable fields and configurable views help law firms create a platform experience that suits the particular needs of an insurance defense practice. With these options, firms can design their layouts according to the way they want to view case information, so the most important data is always in sight.
• Case ledgers provide firms with valuable data about matter billing histories, while a quick reference dashboard reports on trust balances, fees billed, expenses billed, and outstanding accounts receivable.
• Matter budgeting circles back to the billing restraints that insurance companies can place on insurance defense law firms. These tools allow firms to create individual matter budgets and set alerts for when cases reach set percentages of hourly, fee-based, or expense budgets. These tools also make it easy for firms to generate reports regarding tracked tasks, fees, and expenses.

Under some circumstances, insurance companies may call in a third-party auditing firm to conduct an audit of a particular matter. Having an organized case management system saves the extra time and resources that would otherwise go into preparing for the audit. It also presents every aspect of the matter, from intake to final billing, in an organized and structured manner, increasing the likelihood of a successful audit.

Client Management

This goes back to the most complex aspect of insurance defense law. Competing interests between the insurance company and the insured can bring up ethical uncertainties for the firm and its attorneys. The appropriate strategy for handling these sticky situations largely depends on state rules. For instance, the North Carolina State Bar deems the insured as the "primary" client in an insurance defense case, whose "best interest must be served at all times." According to the Bar, the attorney owes the insured a heightened duty of communication and loyalty at the least.

To best serve their clients and protect themselves from potential allegations of wrongdoing, law firms need a foolproof method of managing, storing, and organizing all client communications. Tools like in-app text messaging, client portals, and conversation tracking help law firms securely maintain and manage client communications directly within the matter for future reference at any needed time.

Intuitive email management is another tool for elevating client management. With email integration options, firms can save client emails to matters in a matter of seconds. Advanced email search tools help firm members quickly locate emails using properties like subject, sent/received date, or email content without the hassle of manually searching through a crowded inbox. Billing is also made easier with an email management feature that automatically creates billing entries for sending or reviewing client emails.

The Takeaway

If you're an insurance defense firm or you're looking to expand into the practice area, the goal of your operations should surround agility and organization. Specialized tools will help you manage complex matters while maximizing productivity and promoting profitability.

For more than a year now, the practice of law has looked vastly different than any other time in history. From Washington DC to Arizona, courthouses were shut down to the public and attorneys for common proceedings, greatly affecting the traditional law firm environment.

For some firm leaders, less time in the courtroom resulted in more time spent on administrative tasks, especially in situations where downsizing needs impacted support staff numbers. Attorneys found it necessary to take on a larger percentage of law office management duties.

With the world starting a slow return to normal, court systems nationwide are beginning to open up, welcoming attorneys and the public back into courthouses for in-person appearances and other court-related business. While some jurisdictions remain at partial or limited capacity, others have made the transformation to 100%, forcing many attorneys to make a quick transition.

For attorneys handling more of their firm’s administrative duties, returning to the courtroom can feel stressful. They may worry about balancing an increased workload and more time away from the office with their increased administrative duties. But legal practice management software offers these attorneys the help they need to provide clients with quality legal service while also handling law office administrative needs. With tools like automation and legal billing, attorneys can stop worrying about their long list of administrative tasks and focus on a successful return to the courtroom.

Here are some specific ways that legal practice management eases the transition back to the courtroom:

Accounting

Many law practice management software options contain accounting features, but not all platforms are the same. Law firms should have accounting tools that can manage both general firm finances and client billing tasks. General firm accounting needs help law firms with:

• General Ledger
• Profit & Loss
• Operating Account Ledgers
• Balance Sheets
• Asset Management

These tasks are typical to most accounting software and don’t necessarily require an accounting system specific to the legal industry. However, attorneys returning to the courthouse need maximum efficiency and a software that goes beyond the accounting basics to handle client invoicing.

Invoicing takes up a significant amount of valuable time when not handled efficiently. It can also lead to troublesome inaccuracies. Maximum law firm efficiency requires legal practice management accounting that saves valuable time during the invoicing process and promotes billing accuracy. Other useful legal accounting features include real-time financial insights that provide law firms with data about the firm’s financial wellbeing and vendor tools that help automate third-party vendor payments.

Trust/IOLTA Accounting

Trust/IOLTA accounting is another extremely important law firm duty. Firms need a legal practice management system that streamlines the various trust accounting processes and promotes compliance with state regulations. Accurate trust accounting requires the ability to keep record of client funds held in trust and accurately track all deductions from these accounts, including payments automatically applied to bill balances.

Some necessary duties specific to trust/IOLTA accounting include:

• Simple generation of reports required for trust account compliance
• Easy trust account reconciliation
• Quick transfers from trust accounts to operating accounts
• Separate ledgers for trust and operating accounts
• Ability to connect all trust and operating account transactions by client or matter

Calendaring

A return to in-person court hearings makes accurate calendaring an absolute necessity. Some attorneys have been attending virtual court hearings for more than a year. Making the transition back to physical appearances requires some challenging adjustments.

A firm-wide calendar helps keep all firm members in sync and on the same page, even those working remotely or temporarily away from the physical office. Personal viewing options allow individual firm members to view the day ahead with a single glance. Lawyers need a legal practice management software that offers a variety of calendaring features, such as:

• Color coding by firm member or task type
• Printable daily calendars
• The ability to create recurring members
• Customizable email reminders for important events
• Integration with calendaring systems like Outlook 365 for easy syncing

Matter Management

Legal practice management software makes it easy for law firms to track all things related to each firm matter. Real-time dashboards provide accurate updates pertaining to trust balances, billed fees, billed expenses, and outstanding accounts receivable. Spending reports and email alerts help keep matters within established budgetary limits. Firm leaders can also review work completed on a case by various categories, including specific timekeepers, fees, or expenses.

With some legal practice management software options, law firms can work within the system to build out a matter. The system can then automate the case by assigning tasks or even completing some tasks. This adds up to valuable time savings for the entire firm, and especially attorneys returning to the courtroom. Legal practice management workflow systems can also keep law firm teams updated, as well as clients.  Firms can set automated emails to be sent to clients as their matters reach specific milestones.

Document Management

Moving away from the office and back into the courtroom means that firm attorneys routinely need remote access to documents. Law firm management software can maintain firm documents in a safe and secure environment while also allowing for easy sharing with credentialed parties. Firms can organize documents by matter and save administrative time by creating standard folders to be generated for every new matter.

There are also document management options that allow clients to securely upload documents to the firm, which clients appreciate because it saves them time and effort as well. The legal practice management system notifies the appropriate firm members when clients upload documents, as well as when they download documents shared with them.

Other useful document management features include:

• Intuitive email management
• Outlook integration
• Comprehensive email search tools that let you quickly find emails based on various properties
• The ability to track billable time while emailing and create an associated billing entry
• Easily produce emails saved to a matter file. Emails are stored as native MSG files, making it easy to upload an entire email folder in seconds.
• Comprehensive document search tools
• Document version tracking
• NetDocuments integration

The Takeaway

Navigating the legal landscape since the start of the pandemic has not been for the faint of heart. From work from home to Zoom, and virtual courtrooms, firms are having to quickly learn to balance a different kind of workload.

The functionality and purpose of legal practice management software are to offer attorneys and their firms a means to provide their clients with the quality of service they expect while also juggling the back office, behind the scenes needs in whatever environment they may be faced with. As we begin to focus on a successful return to the courtroom, you can rest easy knowing that no matter where you are, you will be able to get your job done and keep your clients happy.