Your law firm cares about its clients. Retaining information for those clients while keeping matters organized and accessible is critical to providing optimal client service and maximizing billable time.

But client management is often a nightmare for law firms. We both know that keeping hard-copy records is an inefficient use of time and space. Plus, you never can find what you need just when you need it. And setting up an individual spreadsheet for each new client can prove tedious and frustrating.

Enter client relationship management (CRM) software (also known as “customer relationship management” software outside the legal industry).

CRM systems can help your law firm create a client-focused environment where your clients feel valued — while your firm reaps other benefits. Through organization and enhanced efficiency, CRM software helps your law firm maintain and strengthen business relationships. CRMs can help you keep your eye on the prize by prioritizing clients and ensuring that no growth opportunity goes unnoticed.

But it can be hard to decide which CRM is right for you. Multiple law firm CRM options are available today in the market. Below, we’ll guide you through what to consider as you evaluate the best solution for your law practice.

What is CRM software, and what does it do?

Put simply, CRM software helps law firms manage wide-ranging business development functions. These functions include client intake, client scheduling, and follow-up, automated marketing tasks such as email campaigns and reminders, revenue tracking, and workflow simplification. The right CRM software can help your law firm systemize its approach to maintaining client relationships. It’s a critical piece of your overall marketing plan and, in turn, essential to your bottom line.

In sum, CRM software can help your firm turn potential clients into retained ones while also helping you strengthen relationships with current clients. Think of it as a magical Rolodex.

How can a CRM help with client intake and with providing a better client experience?

You never get a second chance to make a first impression. For your law firm, intake is the first communication with a client and the perfect opportunity to impress with your firm’s client-centered approach. As you already know, legal practice management software streamlines procedures like client intake forms and onboarding new clients. Consider a CRM as another piece of this efficiency pie.

A pivotal part of growing your firm is understanding the client lifecycle. With this knowledge, your law firm can personalize and systematize each step within that lifecycle, maximizing efficiency and profit. This is where CRM software excels.

CRM software can help your law firm streamline the intake process, including client communications and correspondence, document exchange, internal data sharing, and even processing bills. You’ll eliminate duplicative tasks, have more time to do substantive legal work, and ensure that your first impression is flawless.

An improved intake process and the right integrated tools can help your law firm start working on a matter as soon as possible. These, combined with CRM software, will provide your clients with the best possible experience.

How can my firm get started using a CRM?

It’s easy to get started with a CRM. The first step in getting oriented is understanding which CRM best suits your firm’s needs.

Take some time to consider where your firm’s biggest inefficiencies are and where you see the most growth potential. The right CRM solution can help with efficiency while also helping your firm grow. Then consider these four options.

Are certain CRMs specifically designed to help law firms?

When conducting your research, you’re likely to find there are endless CRM options. We recommend taking your time and thinking about your law firm’s needs (including its budget) and how CRM software can meet those needs.

Be sure to consider which CRM best supports your legal practice. For example, Salesforce is an immensely popular CRM across all industries. But Salesforce might offer more features than you need if you’re a smaller or midsize law firm. And if you’re still exploring your technology options, you may think a solution like QuickBooks is all you need because it stores your clients’ information. But it doesn’t do anything to manage your client pipeline.

Here are five options that you should consider.

1. HubSpot

HubSpot is one of the legal field’s most popular CRMs. It’s free and useful, and if your firm grows in the future, HubSpot can also support expanded operations and needs. HubSpot allows your firm to track social media hits and interactions. It also offers valuable workflow functionality, including marketing tools such as email automation and scheduling follow-up emails based on website hits. HubSpot will provide your firm centralized access to important client insights and assist in better managing your sales pipeline.

2. InTapp

InTapp is a CRM solution built for the corporate world. It’s used by many of the biggest and most prestigious law firms. With Microsoft, email marketing, and billing system integrations, it has much to offer midsized and small law firms looking to up their game. InTapp also offers social media functions and various mobile apps to allow your lawyers to stay connected and bill on time.

3. InterAction

InterAction is LexisNexis’s CRM software that turns your firm’s contacts into business opportunities with client contact management and data collection. InterAction focuses on building client relations and generating leads through easy-to-use CRM applications that leverage client data. With its comprehensive approach to data control and quality, InterAction also helps your firm create a more efficient workflow that will help it develop opportunities for growth.

4. Lawmatics

Lawmatics is another law-focused CRM software. It offers solutions by practice size, so whether you’re a solo practitioner or a small, medium, or large law firm, Lawmatics has software designed to help your firm thrive. This CRM includes many basics you would expect, like enhanced automation options and customizable emails to help with marketing campaigns. It also offers graphic-forward systems, including a pipeline management system to track the nitty-gritty of client acquisition, advanced custom fields to capture comprehensive client information, and a built-in suite for e-signatures.

5. Law Ruler

Law Ruler is a CRM solution that collects and organizes information about a law firm’s leads, prospects, and current clients. It includes marketing automation tools, including personalized emails and text messaging for lead nurturing. It also supports client intake with custom form building and templates. It rounds out its offering with a robust set of analytics and customizable reports.

The next step is integrating your CRM with other legal technology

Any of the CRM tools mentioned above can help your law firm optimize and streamline daily operations while keeping an eye on your growth. Coupled with an improved intake process and the right integrated client management tools, your law firm can spend more time focusing on its top priority: serving clients.

The right combination of legal software, including CRMs, case management software, document management systems, and invoicing solutions, can help your law firm give clients the best possible experience. The key to ensuring use is integrating your systems as much as possible, reducing the administrative burden on your lawyers and your clients. Look for a CRM tool that works with your firm’s existing legal technology suite, and you’ll reduce implementation and adoption headaches.

Recently, we wrote a blog about the timekeeping, billing, and accounting features you may want from your legal practice management solution.

However, those requirements likely don’t include anything related to calendaring and task management, document and email management, workflows and automation, or communication tools.

When evaluating new technology, you should also think about your firm’s day-to-day operations and how those procedures lend themselves to your practice management software requirements.

Practice Management

A practice management system creates a hub for the entire firm to find information about your cases, which makes you more efficient and allows you to provide better client services, answer questions faster, and gain a better grasp of your data.

Practice management is a feature-rich component of legal technology with two overarching features: calendaring/task management and document/email management.

Calendaring and Task Management

Calendaring. It seems so simple – trivial even. Yet nothing is more critical to your firm’s day-to-day operations than an accurate and up-to-date calendar.

Practice management software gives you a centralized calendar that is backed up and allows you to choose from multiple views along with a matter-centric view. You can even create workflows and automated tasks that are built into each calendar view. This is great for collaborative firms or those that have a heavy workload and need help juggling a multitude of tasks.

All of this sounds great, right? But how does it fit within the complete picture of your firm? Start by asking yourself these questions:

One of the major benefits to a firm-wide calendar is that you can see everybody’s calendar and schedule multiple events with several attendees all at once, or select only the peoples’ calendars you need to see – no more having to do it manually one at a time.

The point of task management is to make it easy for your managing attorneys to check the progress of their cases. How easy is it for them to do this now? Can they see at a glance what has or hasn't been completed? The goal of any task management platform is to be able to present an overview of where any case stands at any given point in time.

Document and Email Management

Essentially, you have two options: You can either go with practice management software or you can use an integration dedicated to document management. When you’re evaluating document management, you need to look at a few things:

Storage is another important factor. How big is your drive now? How much would it cost for additional storage? These are the things you need to evaluate when thinking about document management systems.

Email management is a related priority. Some practice management systems let you save emails directly from Outlook or Gmail into the system itself. If you’re planning on going this route, how easy is it to do so?

Once you have learned how saving emails works within the system, the next step is to ask how the system will store the emails you save. Is it making copies of the emails or simply linking to them? Is it converting them?

Workflows and Automation

Workflow itself is defined as the sequence of processes through which a piece of work passes from initiation to completion. For many law firms, finding tools to free up more time to bill is essential to growing their practice.

Essentially, workflow brings process and automation together. Workflow takes a process, adds highly defined inputs and outputs, and uses automation to complete the tasks on your behalf.

For example, a client fills out a form on the website which triggers a potential client record to be populated in the database. Once a new record is created in the database, an email is automatically generated and sent to the prospective client letting them know someone from the firm will be in touch. Then, a task is created and assigned to the firm administrator to contact the potential client. And there you have it, workflow in a nutshell.

For many law firms, workflow can be a game-changer by creating structure and efficiencies within their practice. Additionally, workflow can free up time to bill, keep your database clean, and speed up the onboarding of staff.

Communication Tools and Portals

As important as it is to maintain thorough internal communication, it is just as essential to be able to communicate externally with your clients. Does your current system allow you to text and call your clients? Does it track and record the time you spend communicating with those clients?

Client portals have become a standard feature that your future clients expect. What does your client service like now? Does your team lose billable hours answering questions that could easily be answered through a client portal? Do you give your clients the autonomy to pull the answers they need on their own or do they still rely on getting in contact with you?

In order to improve client communication and create a client-centric approach to your day-to-day tasks, prioritize file storage and data security to promote a seamless, positive experience that clients will recommend to others.

Client Intake Process

Another make-or-break process for client satisfaction is the intake process. The client intake process looks different from firm to firm, but at its core, you need to be able to track data efficiently and access it whenever you need it, from wherever you are.

Your practice management software should help facilitate:

A huge part of the client intake process is cultivating the relationships that are most fruitful for your firm and tracking the progress that comes from those leads. The ability to pull lists and reports on current and potential new clients is paramount to your firm’s growth.

 

To understand the full history of legal industry practice management consultants, you’d have to go back 30+ years. Back then, all programs were server-based (not cloud-based) so law firms needed someone with enough technical expertise to understand how to load new programs onto their servers, install all the updates when they rolled out each year, deploy those updates to the firm servers, train and teach staff how to use the software, and ensure everything functioned and was maintained properly.

Obviously, things have changed quite a bit. Technology has progressed and law firms that are evaluating cloud-based programs don’t necessarily need someone to download their data and upload it to new software on a new server. Why? These days, the technology vendors will do all that leg work for you.

Over the course of the last several years, we have seen firms work directly with practice management software vendors and we have seen firms utilize practice management consultants. We’re not here to lead you one way or another, but rather to give you an overview of what both scenarios could look like.

Evaluation Process

When it comes to evaluating different programs, the first step is always going to be evaluating your firm’s needs.

The first thing a consultant is going to do is come in and interview you and your firm to understand your technical needs. They’ll probably be familiar with the program you’re already using as they begin their process. After conversing with your stakeholders, they’ll make a recommendation based on the information they collect.

If you’ve ever felt uncomfortable speaking directly with a vendor about what you need, or if you feel like you lack the technical expertise to make those judgment calls, we recommend bringing a consultant into the conversation.

Juggling Multiple Systems

Today’s consultants typically work with multiple systems. This can be both a good and bad thing.

The good thing? Their experience with multiple systems can prepare them to bring multiple options to the table for your firm, providing the pros and cons of each of the recommended services.

However, if a consultant works with multiple systems, they’re probably not an expert in any single one. So, if you’re evaluating multiple software systems and end up going with a specific one, your consultant will not necessarily be an expert in that chosen system. What this means is that they will likely have the foundational knowledge to initiate the basic setup for you but may lack the granular details to help you flourish and excel. In this scenario, working directly with the chosen software vendor specifically for implementation will be more advantageous because the vendor knows more about its own program, and will be better equipped to help you overcome any issues you may encounter.

Cost

Vendors and consultants operate under two very different business models. The vendor is a software company and the consultant is a service company. Software companies view services as a means to get you to use their software and to ensure your success with their program so you remain a happy and loyal customer. Service companies sell services as a way to make money.

Typically, working with a consultant is going to be more expensive than going directly to the vendor. The right consultant will offer a lot of value, but some firms don’t need those services. Think about whether or not it makes sense for your firm to hire a consultant in order to get from point A to point B.

If your main concern is cost and keeping expenses as low as possible, you may want to skip the middleman and think about working directly with a vendor.

Conclusion

Most software vendors today are set up for you to work directly with their team throughout your migration, go-live, training, and ongoing support period; however, they will also accommodate your firm if you choose to work with a practice management consultant.

Ultimately, the decision is up to you and what you think will not only best fit your firm today but your firm’s future needs as well.

The cloud has become a standard part of our lives. From streaming video platforms to smartphones and smart home devices, we rely on cloud computing to make our days exponentially more convenient. But individuals are not the only benefactors of cloud services. Over the last 10 years, business leaders around the world have incorporated cloud-based technologies, recognizing their greater efficiency and cost savings potential. Though it has taken a little longer, the legal industry has also started embracing the cloud.

As reported by the 2018 American Bar Association (ABA) Legal Technology Survey Report, less than 55% of all surveyed law firms utilized some aspect of cloud computing. The hesitation among law firms typically stems from three main reasons: worries about security, limited understanding of how the cloud operates, and ties to traditional methods of practice management. Many of these law firms still rely on filing cabinets and in-office servers, but the disruption of service that took place over the last couple of years made the drawbacks of this decision painfully clear.

As a result, law practice management software is meeting the cloud. Why are more and more law firms adopting cloud solutions?

Let’s explore in more detail the benefits of cloud computing, and why more and more law firms are adopting this cost-effective, more secure option for their legal technology solutions.

If you are a law firm leader or administrator who is frustrated with the inconvenience of premise-based software, this blog post is for you. It will explore four reasons why your law firm needs cloud-based legal practice management.

Why Law Firms Are Moving to the Cloud

Legal practice management software helps law firms keep all aspects of their practice organized and running efficiently. Firms have been using them for years to handle such needs as document storage, contact management, calendaring, and task management. They become the backbone of a practice, and when they are not available – whether due to a server crash or office inaccessibility – firms can experience debilitating process failures. After all, practice management software is only beneficial if a law firm can actually use it.

With in-office options, the practice management software is installed on a local computer or server located within the physical office space. Those servers are usually only accessible from computers also located within the same space, which limits the capabilities of the practice management software.

Cloud-based legal practice management software is not installed locally on your office server. Instead, it is web-based, using a remote server maintained by the software provider. Access occurs through the internet, which makes the software convenient and virtually 100% available for use.

1. Consistent Availability

With cloud-based legal practice management software, legal professionals can access all of their data at any time and on any device. This includes everything from documents and emails to time tracking tools and invoices. It eliminates the need to be located within the physical office because all data is stored in the cloud, which can be accessed remotely with the proper credentials or through secure mobile apps.

Even when a firm member makes changes to a client file or administrative document, other firm members maintain access to the most recent version. Working with cloud-based legal software gives attorneys and legal support staff the ability to retrieve case data and work on matters in a secure environment without the need for those antiquated network connections that confine them to the four walls of the office. Remote work becomes easier, with greater efficiency, productivity, and accountability.

2. Decreased Downtime and IT Issues

Law firms need an IT infrastructure that they can consistently rely on to meet their practice management needs. Recurring problems and excessive downtime limit productivity. They can also threaten a firm’s ability to maintain confidential client data in an adequately secure environment.

In-office servers are notorious for their unreliability. They break down often, especially without regular maintenance and updates. They are also known to be extremely glitchy which frustrates firm members as they try to complete time-sensitive tasks.

Firm administrators that choose an on-premise legal practice management software must prepare for continuous maintenance needs and repairs. Many firms find these tasks so challenging that they either keep an IT expert on staff to address server problems or contract with an outside IT consultant. Yet, even with the most proactive measures in place, servers can still go down, leaving firm members unable to use them.

Cloud services obviate all of these headaches. There is no requirement to manage expensive servers because the software provider automatically performs all necessary updates, regular maintenance, and backups. They also quickly address any repair needs, often before firm members even recognize that a problem occurred. Every technical task related to cloud-based practice management software is supported by one centralized team solely dedicated to its performance.

3. The Right Tools for Internal Changes

Changes within a law firm require a practice management system that is flexible and quick to adapt. Whether you are the administrator of a mid-sized firm that is scaling up or you are downsizing your firm’s physical office space, cloud-based legal practice management software adjusts with the changing landscape of your law firm.

Cloud-based practice management software offers a variety of modules and features, and many providers allow administrators to choose which options best meet the firm's needs. As the firm grows, so can its practice management software. There is no need to start from scratch with a new system when you can easily make adjustments to what already works.

It’s no secret that office relocation can be a pain in the neck. But it’s even more challenging with an on-premise server. Moving the server from one location to the next will likely require the assistance of an IT technician. It can also result in a period of inaccessibility to important firm and client data.

With a cloud-based system, your firm’s practice management software remains intact and ready to access throughout the entire move. Unlimited storage capabilities alleviate the need for heavy file cabinets and multiple servers. With everything stored in the cloud, firm members can settle into their new digs and get right to work without the costly interruption.

4. Improved Security

Many lawyers still doubt that cloud technologies can offer the level of security that they are ethically obligated to provide their clients. Yet, the real dangers of theft and data breaches are much more prevalent with in-office systems. A single fire or natural disaster can decimate physical documents in a matter of seconds. In addition, the responsibility to protect an on-premise server from cyberattacks falls on the firm, and that can prove very expensive. Cyber experts and server updates cost money, but law firms must take on these costs to keep their physical servers secure.

When using cloud-based document management, data is continuously saved and stored within the cloud, protecting it from physical threats like fire or natural disasters. Law firm leaders also control which members of the firm have access to the software. Some systems even offer security measures that limit the accessibility of individual cases or client information.

Cloud providers maintain a team of cybersecurity experts who are on constant guard against cyber threats and attacks. They take on this expensive responsibility so that law firm administrators feel comfortable trusting them with their law firm data.

Law Firms Need the Power of the Cloud

Law firm administrators that understand the power of cloud-based legal project management provide their firms with a valuable resource that streamlines and protects numerous aspects of legal practice. When choosing the right cloud-based option, look for features like:

As your law firm evolves, cloud-based legal practice management software can provide the continuous support and stability that your firm needs to become more productive and more profitable.

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:

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:

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:

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:

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:

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:

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:

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:

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:

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.

We’ve talked before about the importance of legal analytics and legal technology for law firms. If you’ve already made the leap to using a cloud-based legal management system, you might be overwhelmed by all the data it’s collecting. After all, most lawyers don’t moonlight as statisticians.

It’s difficult for leaders to know what metrics are the most important for the firm’s success in the long term and how to use those metrics to make higher-level decisions that help drive law firm profitability. The best way to start is by tracking the metrics with a convenient and easy-to-use tool that keeps them organized all in one place.

That tool is called a dashboard. Every law practice can use dashboards to easily track financial metrics, make informed decisions, and grow their business.

What is a dashboard?

A dashboard is a customizable page that uses simple graphs and visuals to monitor key performance indicators (KPIs) in real-time.

Usually, a dashboard is a landing page and part of a larger cloud-based law firm management platform. Dashboards provide law firm management with an easy-to-digest snapshot of the metrics and relevant data for their goals. Instead of struggling to understand the big picture, dashboards provide much-needed perspective and turn raw data into actionable information.

Dashboards are a tool to help law firms increase productivity and stay on track. They empower law practice management to monitor progress and make informed decisions that drive firm strategy, hiring, staffing, pricing, and more.

Dashboards aren’t just for law firm management. They can also help lawyers and staff monitor appointments, tasks, and individual metrics. Access to dashboards helps employees stay on task and improve their collaboration while allowing management to do a deeper dive into individual employee productivity.

What are data points?

Data points are raw numbers without any context. Data points are the building blocks for the information that is displayed on the dashboard. Data informs metrics and KPIs and the graphics that appear on your screen.

Legal technology platforms constantly collect data. For example, when timekeepers input data (like their billable hours or completed tasks) into a case management system, it is automatically populated and incorporated into other aspects of the software and may also interface with other technology solutions.

A great example of a data point is the number of employees in your law firm, the number of daily website views, or an employee’s time spent on a particular task, like billing. Data points are different from metrics because you can’t influence them. Data is data, no matter how you spin it.

What are metrics?

Metrics add meaning and context to data sources and inform KPIs. Metrics measure the overall health of a law firm. Law firms track key metrics to create KPIs that measure progress toward achieving a larger business goal.

Some examples of metrics are the actual minutes or hours that lawyers spend on particular billable tasks per week (instead of just a raw number), the lawyer turnover rate in the office, or the percentage of new clients who view the website and request a consultation.

What are key performance indicators (KPIs)?

KPIs reflect a law firm’s progress (or lack of progress) toward achieving a particular goal. They are forward-thinking data collected to analyze productivity.

KPIs are based on specific metrics related to different aspects of a law firm’s functionality, including budgeting and billing, education and training, overall client satisfaction, and internal processes. The law firm’s leaders identify a goal based on the metrics and then use KPIs to measure progress toward that goal.

KPIs based on our example above include reducing the time that lawyers spend on billing processes by 25% each month, generating 30% more clients in the upcoming year, or retaining employees for at least 3 years.

Data points are the foundation for a metric, which gives data meaning. Then the metric (or multiple metrics) are used to create a KPI and monitor progress towards a particular goal.

What are the best practices surrounding dashboards?

Dashboards are only as helpful as the information that they display. Even though they are simple, dashboards require some forethought to set up. Legal practice leaders should take time to customize their dashboards to be the most practical and effective.

Define your KPIs

Before using your dashboard, you’ll need to have KPIs. A clearly defined KPI helps you achieve your business goals. It keeps everyone in the office on the same page and makes your dashboard more useful. A well-defined KPI is SMART: it is specific, measurable, attainable, realistic, and time-bound, meaning that it has a specific deadline.

A great example of a KPI is to bill 25% more hours in the first half of the fiscal year. This KPI is clearly defined so that every timekeeper can get on the same page. It is a realistic goal that can be measured and tracked throughout the designated period.

Declutter the dashboard

A dashboard is designed to be a snippet overview of your progress toward reaching KPIs and the health of your law firm. Most law firms have many different business goals that change over time. It is important that you declutter your dashboard and only focus on the most important KPIs for your purposes.

If there is too much information on your dashboard, it takes away from the tool’s simplicity. The more data that’s displayed, the harder it is to quickly digest important trends and track progress. As time passes and you reach certain goals, you can re-evaluate your dashboard and add or subtract KPIs as necessary.

Use multiple dashboards

The great thing about dashboards is that you can have more than one. Instead of having a dashboard that tracks everything under the sun, you can set up different dashboards for each area of the business. For example, you should have a dashboard dedicated to financial metrics and a separate one dedicated to client metrics.

Using multiple dashboards also lets employees track the metrics as they relate to their own performance and responsibilities. To reach your law firm goals, you’ll need to rely on your staff. By giving timekeepers access to their own dashboard and the ability to track their own metrics, it keeps them focused and sets clear expectations for their work. Instead of nagging lawyers about how they spend their time, they can self-monitor and make adjustments along the way.

What metrics should my law firm track with dashboards?

Your law practice can use a legal dashboard to track just about any metric. Law firms should consistently track financial, learning and growth, client services, and project management metrics for every practice area. Each of these categories should have a dashboard that reflects the KPIs related to them.

Of course, many of these metrics tend to relate to a law firm’s financials. After all, streamlining internal processes, increasing lawyer productivity, and having happy clients all affect revenue. An easy way to start is by creating a dashboard to track financial metrics.

What financial metrics should my firm track?

Small and mid-size law firms that want to grow will benefit from tracking some combination of the following financial metrics:

  1. Billable hours by timekeeper
  2. Average billing rates
  3. Revenue per lawyer
  4. Revenue billed vs. revenue collected
  5. Realization rates
  6. Collection rate
  7. Utilization rate
  8. Law firm debt
  9. Operating account balances
  10. Annual costs
  11. Accounts receivable outstanding
  12. Net income as a percentage of the revenue
  13. Overhead
  14. Fee per ongoing matter
  15. Fee per new matter
  16. Revenue per employees

Just because law firms should track all of these financial metrics doesn’t necessarily mean they should all be included on the same dashboard. Law firms need to take the time to identify the metrics that are specific to reaching their financial KPIs. Law firm management may opt to have multiple financial dashboards that subdivide these metrics even further.

What are the benefits of a good dashboard?

A well-thought-out dashboard can benefit a law firm by driving productivity and helping the overall business development. Dashboards help law firm leaders turn data into usable information to inform decision-making. They are an excellent tool to track financial performance and monitor the firm’s finances without wasting time staring at meaningless numbers. Dashboards can also be used in conjunction with other best practices, like reporting, to increase the bottom line.

Well-organized dashboards can also keep law firm management focused on the big-picture goals for the business instead of getting bogged down in the minutiae. Plus, dashboards can help keep everyone in the office on the same page about firm performance and give them the business intelligence they need to focus on their role in growing the firm.

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.

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.