As an attorney or managing partner, you know what’s needed to practice law – that much is undeniable. However, law firm management is much more than just showing up to court. It’s about staying profitable and keeping legal operations efficient and within the confines of your practicing areas of law. How do you ensure client satisfaction while also maintaining proper recordkeeping? How do you overcome some of the biggest challenges around timing and tasks that aren’t bringing in profit? Covering your tasks well so you can focus on profitability versus tedious admin to-dos is key to improving your day-to-day law firm management. It’ll also keep your staff happy and feeling motivated toward a common goal.

In this blog, we’ll cover the best ways to improve your law firm management – so you can boost profitability and make the most of your operations.

What Makes a Good Law Firm?

The short answer is finding the sweet spot between profitability and quality of client cases. A great law firm can deliver results and resolve cases in a clear, concise, and equitable manner. That said, a good firm also needs a well-structured, organized system that acts as an ecosystem, working together to solve cases. In 2021, you don’t get that without law firm management that’s driven by communication and constant vigilance and upkeep. With how fast things are changing digitally, and how competitive legal services have become, you can’t afford to be complacent. A great law firm must adapt to the changing times, and be willing to constantly improve procedures and processes.

How to Manage a Law Firm

Depending on the size of your firm, there are basic building blocks you’ll need to have in order to start creating these processes. Always work from the top to bottom, with high-level essentials that will be easier to implement and more impactful in the long term.

Organize and Audit Monthly Billing Statements

Having visibility into your funds between accounts and trust funds is a necessity for proper management in your law firm. This happens with proper scheduling and a practice management system that doesn’t follow a “lite,” or freemium trap that nickel and dimes you for every additional feature. The ability to run reports regularly, and with customization options, provide agility and insight when you need it most.

Provide Convenient Payment Options

No one wants to write checks anymore or wait the processing period in the bank for the funds to clear. Offering ways to pay instantly such as credit cards through a secure practice management system means you get paid faster, and easier. 

Prioritize Client Satisfaction

Making sure clients feel heard is a big part of dealing with legal cases. This is a collective effort that must be followed by your entire staff, in a systematic and human way. Most people are distressed and uncertain during a legal matter, so practice compassion and be prepared to explain the steps of the case at any point. For larger firms, hiring someone whose sole job is focusing on clients can be a surefire way to keep them heard and informed. 

What are the Law Firm Procedures and Hierarchy?

Part of law firm management is knowing what duties are attributed to what department. While these lines can certainly blur in a smaller firm, having a handbook that details these can help be a point of reference in the event things become problematic or missed. It also ensures alignment between everyone, as a collaborative environment is essential. 

The below hierarchy gives you a structure for staying organized – but additionally, you’ll want to have procedures that are attributed to each role. Creating an accountability chart will help you delegate appropriately will save you headaches and issues with “too many cooks” later. 

Legal Services

• Managing Partner: One of the most important things you can do as a partner is to know the financials of your firm, so you have a baseline on how to improve performance and make big picture decisions. You’ll be able to ascertain profit and loss, productivity, and other important KPIs that may need to be adjusted. 
• Legal Assistants/Paralegals: From scheduling trials to meeting other court deadlines, these employees schedule trials, file paperwork, and meet all deadlines needed for cases (litigation and otherwise). 
• Attorneys: One step down from the big picture, your attorneys have input on firm operations but also are the conduit between clients and opposing counsel. They go to court, sit with clients during depositions and other meetings, and are the main authority figure for assistants and other support staff. 

Accounting and Finance

• Accountant: Your billing specialists ensure everything gets paid, and the lights stay on. Whether it’s a single accountant or an entire team, the more efficient your billing cycle and pricing, the more visibility you’ll have into the health of your firm’s financials at any given time. For smaller firms, rather than shelling out money for a full-time employee, look into a contractor or outsourced bookkeeper to track financials until you’re larger and have the budget.

Marketing

• Marketers: Whether you function as a marketer in the beginning or hire a freelancer, investing in being seen always pays off. Finding that desired potential clientele and attracting new audiences to your firm is useful as you grow. Having a brand that sets you apart can be critical when people are looking for legal services.

Law Firm File Management

Equally important to your human management is how you store files and client matters. To drive efficient law firm management, utilizing software that has easy data retrieval and organization can save many headaches down the line. While it’s still almost impossible to go completely paperless, there are many digital tools that ease the paper load considerably. Some tips and tricks that you can look out to improve are:

Mobile App

Most law firm management software includes a secure mobile app that clients can access information regarding their case. They’re also able to view invoices and pay any outstanding bills – making it an agile asset in your toolkit. Even better, your attorneys can actively track time on the go so all billable hours are accounted for. 

Secure Backups

Cloud-based software keeps your information secure and tiered based on staff permissions assigned. The worst thing that could happen with on-premise hardware – which was largely the standard up until recent years – is losing mission-critical information and documents attributed to a client’s case. As you know, all the digital notes and scanned paperwork must be kept available for a certain amount of time after a case is resolved. Don’t take the risk; have a system that runs daily backups so no power surge or natural disaster puts you in a bind.

Train Staff on File Best Practices

If you’re in the neighborhood for law firm software, having an ambassador who can work with you to use it to its fullest potential will be a big boon moving forward with matters. Having a go-to expert for software, while being able to train everyone else, ensures procedures are followed and there’ll never be any ambiguity when it comes to filing retrieval or recordkeeping. Standardizing simplifies, and saves time, even if it takes a while to adopt across your firm.

Law Firm Time Management

Some of the above-summarized methods to save time, but there are more ways to build on these solutions to help your staff feel more empowered and give minutes and hours back in their day. 

Track Billable Time

A mobile app or software like mentioned previously that can automatically track the length of time for certain entries and matter tasks. This will let you know what cases are most profitable for you, so you can make the big picture decisions on which ones you should prioritize. More than not, a more quality case versus taking lots of smaller ones can be more profitable – and easier on your staff. 

See how Centerbase can speed up your billing cycle by 30% every month

Prioritize and Collaborate

A team works best and saves time if they’re aligned and communicating on what the biggest priorities are. While billing needs to get done at a certain time, perhaps a legal assistant can help with filing or report retrieval so one of your accountants can focus on getting invoices out on time. Having a team that works closely together will improve management and drive the efficiency of your operations.

Here are 5 Ways to Improve Your Law Firm Management

There are a few things you can examine to manage a firm that’s more successful overall:

1. Have a vision: This may not seem obvious, but without a common goal and mission, you and your staff may feel unclear on what their ultimate objectives are. Sure, it’s usually “complete the case, get the settlement,” but many employees want a leader whose goals can help boost their goals as your firm expands – and that loyalty will help your firm’s reputation and efficiency excel in the long run. 
2. Know your firm’s baseline: You don’t know what you don’t know. Establishing regular reporting on the past year, quarter, or month (or all of the above) to see where you may have the biggest delays in payments can be a valuable tool in knowing where to improve performance and incoming revenue. 
3. Use digital marketing tools: Many smaller firms may rely on word of mouth and referrals to continue the business, but that’s simply not sustainable on its own anymore. This is especially true since there are so many channels you can advertise through social media and sponsored content. Be sure to take inventory of your clientele and invest in a website and social media strategy that brings you in front of new people for ongoing traffic and cases. 
4. Listen to your staff: You probably aren’t in the day-to-day operations of your firm – but your staff is. Foster an open door policy and meetings that encourage feedback and ways to improve directly from them. After all, you hired them as experts. Billing specialists will have considerable more insight into what may be a bottleneck than you, even from reporting access. You’ll find management will be a much smoother and agreeable process when the staff feels like you’re on their side to help them do their jobs.
5. Give accolades: Everyone likes feeling appreciated! Most firms are high volume, high-pressure environments, so show them you notice and credit their performance – especially if it’s above and beyond. Without proper acknowledgment, many employees and attorneys will leave and go elsewhere that has a better culture and environment. Law firm management is about just that; managing people, as they are your most prized asset, and should be treated well. 

We hope this was a helpful resource for you to reference as you continue to explore law firm management. It’s never a “one and done” duty, and iterative improvements will always need to be made over time. If you’re looking for a way to instantly help streamline processes and payments, consider looking into practice management software that simplifies day-to-day processes and helps keep everyone aligned. 

If you’ve heard of Lean management then you know its origins come from Toyota’s revolution of the manufacturing world. In the late ’80s and ’90s, Western manufacturing companies were getting crushed by their Japanese rivals, especially Toyota. At the time, it was no secret that the United States and Europe had lost their competitive edge. The pressure to regain their spots at the top was certainly on.

It was throughout this time that several improvement methodologies rose to existence. Those methodologies included: Total Quality Management, Theory of Constraints, Just-in-Time, and Six Sigma.

Now, fast forward to the emergence of two men by the names of Jim Womack and Dan Jones. They took the principles behind those methodologies and used their differences to create something new. What resulted was a monumental shift from copying specific practices to understanding the principles that made the whole system work.

That all sounds great right? But how do their Lean management principles translate into today’s market and how do you apply them to your firm?

Before we jump into that, let’s recap the seven types of waste that we discussed in Running a Lean Law Firm: How Eliminating Waste Can Drive Revenue. Remember, eliminating these waste types are fundamental to the ideology of Lean management.

Defects- This could range from filing errors, calculation errors, or even sending a client the wrong set of forms.

Over-Processing- Are you spending an excessive amount of time on a particular work item? If yes, you’re over-processing.

Motion- One word: ergonomics. If your work environment is not set up to allow you to move around efficiently and access what you need, you’re producing motion waste.

Waiting- It is what it sounds. Waiting breeds lost time and whether you’re waiting for an action item to be returned to you or you’re experiencing delays within other verticals of the firm, you’re waiting.

Inventory- Your matters or inactive files that have not been closed out or paid on.

Transportation- How much time do you estimate you waste driving to and from client meetings? Probably a lot. How much time do you end up wasting on excessive manual file movement? Also probably a lot.

Over-production- If one part of the firm produces more than others can handle, or if you’re doing too much of one thing, then you're over-producing.

Now that you’re refreshed, let’s jump in.

7 Principles of Today’s Lean

The claim could be made that one of the hardest challenges that businesses face today is the speed at which they must constantly be innovating to meet the pace of disruptive competition. Luckily, the Lean system that Womack and Jones ironed out can be applied to any business or any team because the applications of its principles were designed for exactly that.

The most common metaphor that is being used to describe Lean is fitness. It's the notion of building sustainable muscle and athletic stamina over merely cutting fat.

To start, it is true that if you’re overweight, the first thing you have to do is lose that weight. But once those pounds have been shed, you can’t stop there. Sure you can try to starve yourself to fitness, but inevitably the number on the scale will start to increase again. That, or you’ll just lose your mind in hunger. To become truly fit and sustain a healthy lifestyle, you have to create a system of healthy eating, a balanced workout program, a good night's sleep… you see where this is going. At the end of the day, you have to understand how your body works, what it needs, and how you can optimize your journey to becoming and staying fit. If you just look at each part of the process individually, you’ll be in for a rough ride.

Optimize the Whole

Depending on the size of your firm, you may be working with different partners and stakeholders across a variety of channels. Your goal, whether you’re a small or large firm, should be to create an ecosystem where all those parts could work both dependently as a collective whole and independently as standalone pieces. No one part should be more efficient than the rest.

The best and easiest way to create firm-wide optimization is by automating your processes with technology. From capabilities like centralizing your matter related information, Automatic Time Capture, and firm-wide calendar syncs, you’re going to be able to improve your efficiency and maximize profitability.

Lean law firms know that they must constantly review their services to ensure they’re bringing the most value to their clients. With automation, you will decrease human error and you will gain greater visibility into the operations of your business.

Eliminate Waste

We discussed the different waste types in Running a Lean Law Firm, but it is important to reiterate that although Lean isn’t only about cutting, it is important to be constantly improving.

Think of your waste as anything your clients wouldn’t willingly pay for if they saw it on their bill. Would they be okay with paying for the extra time it took for you to find documents in your file cabinet? Or an error made in the pre-bill approval process? Probably not. Your business fundamentally exists to serve your clients. If you do that poorly your business will fail.

Deliver Fast by Managing Flow

A finished matter is valuable for both you and your client. Until then, it isn’t.

In a world that expects results in an instant, it’s important to deliver those results as fast and seamlessly as possible.

Not only is extra work in progress (WIP) not valuable, it’s slowing you down. Your firm is a value stream that takes in raw materials of some sort, processes them through a series of steps, and delivers an end result. You may not own a physical factory, but you at least have a virtual one.

Somewhere along the line of that value stream is at least one bottleneck. That’s not a criticism; it’s just a fact. Some step in your process has a maximum capacity that’s lower than other stages before or after it. That constraint is the limiting factor for the delivery capability of your entire system. For example, if you’re a lobbyist in DC and have been hired by three large corporations who want to split your fee. What’re you going to do? Spend hours manually splitting each line item? No. Invest in a service that offers the capability of split billing and eBilling. Ultimately, the goal of a Lean firm is to balance the work in the system to the capacity of that constraint.

Build Quality Into the System

The goal of a Lean law firm is to create a system that is incapable of routine errors. In Japanese, this is described through two overlapping concepts: Poke Yoke and Autonomation. Poke Yoke is error proofing as you do new things and Autonomation is the automatic identification of errors in your operations. Both of these allow you to quickly intervene to solve specific problems instead of wasting your time monitoring for problems to happen. Make sense?

If you invest in legal software, your matters will be expedited, you will have more billable hours, and a reduction in human error throughout your pipeline. The bottom line is: your revenue will increase. End of story. Oh, and not to mention the continuous integration of code, automated unit and UI testing, and rigorous monitoring that are all hard at work so you can sleep peacefully at night.

Create Knowledge

A Lean law firm works to absorb knowledge about their field from the outside world. But knowledge, as it applies to innovation in your specific context, can’t be learned. It has to be created. You and your firm gain knowledge best by doing. And when you do something and fail, what happens? You learn. If you don't learn from your mistakes and figure out how to improve what went wrong, you’re wasting your time and your client's time too.

Much of what you learn will be tacit. You can and should invest in tools for documenting knowledge. But ultimately, your tools will function as a backstop for the experience of the rest of your team. If you can create policies and cadences that allow you to build upon what you’ve learned, you will retain high-quality employees and offer stability even through times of change.

Defer Commitment

This isn’t the greatest name for a principle, but don’t stop reading.

What this means is to keep your options open for as long as possible. By the time the decision needs to be made, there is a greater chance that you will know more about every possible option and every potential outcome. Essentially, you are providing yourself with the greatest opportunity to take the most optimal route. It also gives you time to explore different options in more depth and experiment with solutions that may help bring you to the best conclusion.

In areas of complexity or uncertainty, things are very likely to change. Give yourself the opportunity to make the best choice by deferring your commitment.

Respect People

One of the misconceptions of Lean is that it is mechanistic and impersonal. The painful realities that came with having to reduce waste through massive cost-cutting at the dawn of Lean in manufacturing didn't help with this misunderstanding.

But at its root, the waste that Lean truly aims at removing are the layers of overhead between the client and the people who are directly working on that product for the client. Lean firms recognize that the vast majority of the value generated in their organizations is by the people with their hands on the matter.

The best ideas for improving how you work and deliver value to customers come from the place where the work happens. This should go without saying but, treat people kindly, listen attentively, respond promptly, and most importantly, have empathy.

In Sum

The Challenge

Lean requires a culture change within the partners and the workforce. Because of this, leadership must be proactive in practicing and implementing the system. Support for the method must come from the top-down. If you’re investing in new legal software to begin this change, partner buy-in through training must be evident or adoption won’t happen. If you’re wondering how your firm can get the most out of your tech investment, check out this webinar.

The Opportunity

The benefits of adopting the Lean system are endless. Your firm may see dramatic reductions in cost through waste elimination, improvements in quality and consistency, and faster legal processes through the improvement of client services. And most importantly, your firm will see revenue-driving results, and a sustained culture of ongoing improvement and higher staff retention.

Training is one of the leading factors that creates the largest gap between buying and utilizing technology.

For many people, even the word “training” triggers a whole host of negative feelings from angst, stress, and even dread.

But training doesn’t have to be such a pain point. At its core, the key is to look at technology training as an investment rather than a cost. To foster a mindset that training is a piece of a holistic project versus an unavoidable burden.

Let’s take a look at 5 key questions that can help you get the most out of your tech investment.

1. What are the elements of an effective, successful training program?

Leadership Buy-In

First and foremost, the leaders in a firm need to be the advocates for the training. Partners and firm administrators know exactly what they want to achieve with the software, and that information should always travel from the top down. Overall success can largely be controlled by the expectations that upper management sets early on. Clearly defined goals and objectives will naturally promote a sense of direction and purpose for the training.

Micro-Learning

The hope of any training is that your staff retains what they learn. Studies today show that our retention rate for audio/visual material is about 20% in any given session. And if that training surpasses one hour, we retain less than half of the total information presented. Crazy, right? So, how do we combat this? You guessed it, with micro-learning. The key is to break your training into sessions. Never do everything all at once or you can guarantee that your staff's retention will be less than noteworthy. A common complaint is that training takes time away from completing day-to-day work. With micro-learning, you can not only prevent mind drifting, but also reduce the stress associated with not finishing work or meeting specific deadlines.

Relevance of Information

Break your training out by content and who it specifically pertains to. The best way to maximize engagement is to provide training material that is relevant to the work each person has to produce. Matching training content with staff roles will also encourage specific questions that will allow for deeper discussions on pointed topics within the training. Everyone’s work and expectations of producing that work are all different. Keeping that in mind throughout your training sessions will lead to a happier, more attentive team. Another key to utilizing relevant information in your training is to import your firm's own data into the system prior to the training. You can combat the foreign nature of a new software with the familiarity of known data. When people see information they know, they will not only grasp the concepts you’re teaching faster, but they will naturally be more inclined to learn.

Reinforce

Now that you have gotten through your initial steps of training, you may think the most important part is over, but don’t be fooled! Reinforcing that information is just as crucial to ensuring you are implementing it correctly, avoiding bad habits, and maximizing the potential of your investment! Simple steps like hosting a Q&A session once a week or providing a resource library with videos and guides will go a long way in making sure your team is less reactive if issues appear down the road. Most importantly, make it fun! Training and review sessions don’t have to be as awful as they sound. Bring food, have giveaways, create an atmosphere that makes it easier to learn the new material. If you are constantly reviewing best practices and streamlining your sessions to focus on specific questions, you will see an overall faster adoption time and run into less user error in the future.

The Positive Change chart above shows the emotional cycle of new users and the effect the technology adoption has on their mood as they go through the training process. Reinforcing relevant material will help reduce that drop between Uniformed Optimism and Informed Pessimism.

The Staff Emotional Cycle of Change chart gives a high-level view of the unavoidable stages a team will typically go through in the period of a new technology adoption. The pit between stages one and two can be minimized with effective training.

2. What are a few different types of training and which is the best for law firms?

Instructor-Led and Group Discussion

There are a variety of ways a firm could structure how they train their team. From hand’s on individual coaching, group lecturing, and instructor-led training, the style you choose is entirely up to your discretion. However, for law firms looking to adopt the best practice of a new cloud management system, instructor-led training and group discussion are the two most ideal types of training. Instructor-led is the most beneficial if you’re in a remote environment. If everyone is on Zoom together, it is important to have one leader who can direct the group, answer questions, and have a specific roadmap for that session. This style of training is also great for efficient micro-trainings on specialized material. Group discussion is also a preferred method of training because you will be able to break your team out into a variety of segments based on attendance size, relevant content, and personality of the group. Group discussions tend to boost participant engagement and foster an environment that is better suited for questions and suggestions.

Superuser

Superusers are composed of individuals from different departments within a firm who have the strongest grasp of the new software. The goal of these users is to be prepared and make sure that the objectives of each training session are being met and discussed. These superusers, whether they’re partner’s, firm admin’s, or tech-savvy paralegal’s, need to prioritize discussions around various decisions, procedures, and facilitate the overall configuration of each training. All training decisions will be made by this group of superusers prior to attorneys and other staff members getting involved. Superusers provide a unified voice to the rest of the team and offer immediate support for the staff on go live. Superusers are critical to helping keep the internal environment calm and minimize that emotional dip of informed pessimism.

The Timeline for a Training Roll-Out

Superusers should be involved in the training process from day one all the way up to go live. Typically, attorneys can be up and running with the software after an hour and a half of initial training, however, paralegals, secretaries and firm admins may need more time. Training time largely depends on whether utilization is streamlined or more manual, and how active leadership is in encouraging their staff to view training as more of a benefit than a hindrance.

3. How do I evaluate a trainer?

Successful adoption of a new technology will largely be determined by training. A great trainer is someone who is empathetic, patient, and can adjust their teaching methods to best suit the learning styles in the room. It is important that your trainer is someone who will go through all the ups and downs with you throughout the process. You can ask your technology vendor who will be training you and ask them to come to the office as soon as possible for initial discussions. Don’t be afraid to interview the trainer, make sure their skill set is at a level you need it to be, and make sure they understand the preferences and personalities of the people they are going to train. Some software vendors offer free training, but don’t let the word free deceive you. With free training, you will simply get what you get. You won’t have much control over when the trainer comes in, nor will you have much flexibility to select a different trainer if the one given to you doesn’t meet your needs. Getting the right trainer is half the battle in ensuring you’re getting the most out of your technology investment. If the person isn’t the right fit, it could lead to poor adoption of the material.

4. How do I evaluate the success and effectiveness of a training program?

This question largely depends on how deeply you want to analyze the training. You have to decide whether you’re going to do a general cost-benefit analysis or a long-detailed cost-benefit analysis to determine if the training is meeting your ROIs. Prior to the start of your training, ask yourself what you’re trying to measure. Are you looking for more billable hours? Trying to create an environment more appealing to younger attorneys? Attract new talent? These goals will help measure what you’re looking for. The easiest way to evaluate the training is by getting your staff involved. Create surveys, have pre and post-training assessments, and self-evaluations. Giving your staff a voice will not only decrease inefficiencies but will allow you to change strategies and pivot approaches when need be.

5. Why should I measure the effectiveness of my training program?

There are so many metrics to gauge performance, from marketing reports, KPI’s, and applications with metric dashboards at a glance, a firm can measure their performance on many levels, but what we aren’t measuring is how teams are really doing with their software. Could they be doing better? Are they using the most effective strategies? Are they streamlining the process? Additionally, users are now working remotely, so how can we measure performance in a way we’ve never had to measure it before? All of those answers will point to the areas where you need more training. If you can measure your learning objectives, you will be able to measure your efficiency metrics a little better. Everything is being broken down and analyzed these days and training shouldn’t be an exception. At the end of the day, if you can locate your efficiencies, you can increase your competitive advantage. For example, let's set a goal of increasing your billable hours. What do you do next? Well, you can invest in technology that gives you features like Automated Time Capture (ATC). ATC functions solely to help you bill more hours. But what if you don't know how to use the tool? Looks like you won't be reaching your goal.

If you have the tools but they are never used, you’re not going to gain the efficiency and you might as well not pay to have the tool in the first place.

Training is essential. Proper training that fits your firm's needs is crucial. You will get the most out of your technology investment by embracing training, tailoring it to your firm’s needs, and evaluating its overall effectiveness.

***

We want to thank Laura Kennedy, Co-Founder of Circle Management Group, for providing the Positive Change and the Staff Emotional Cycle of Change charts. Laura was also pivotal in conducting the webinar, How To Get the Most Out of Your Tech Investment, hosted alongside Centerbase's own, Rob Joyner, VP of Sales and Marketing. This blog was written based off their discussion on how proper training can make or break the successful adoption of any technology investment.

Laura has over thirty years of specialized technology training and change management experience. Her approach to training has helped thousands of professionals adopt new systems and processes.

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The most common misconception of Lean or Lean management, is that you have to expeditiously cut costs, maintain a small staff size, or use as little resources as possible. Fortunately, none of that is the case.

Before Lean became the methodology that it is today, the initial concept was created by Taiichi Ohno, an industrial engineer and manager at Toyota Motor Corporation. Following WWII, a group of American professors went to the Toyota factory in Japan to study what they were doing to rebuild their economy and industry. What resulted was a summarized theory of the Toyota production system that Taiichi invented. They then took these findings back to America and labeled it Lean.

So what is Lean? How can being a Lean law firm drive up your revenue or improve your overall efficiency? Simply stated, a Lean business is a business that maximizes value while minimizing waste. A Lean business model focuses on improving processes across the value stream in order to eliminate waste and deliver optimized value to the customer. This can help teams and organizations achieve their goals in smarter, more sustainable ways.

Lean is being used in the software industry, government organizations and healthcare, but it is not being used in the legal space. The most fundamental concept of operating under a Lean principle is being able to pinpoint and eliminate waste. For law firms, the key is to understand the difference between this waste and the value you bring to your clients. If your firm can understand what brings value to your clients versus what is waste, then you can eliminate that waste and focus on bringing more value.

Throughout the creation of Taiichi’s production system, he took into account seven kinds of waste and identified them as: overproduction, inventory, motion, defects, over-processing, waiting, and transport. Now, within these waste types you have what are called bottlenecks. Bottlenecks are composed of constraints that cause points of congestion in a process that slow down your firm’s flow of income, case load, daily operations, etc. Typically, bottlenecks are caused by the activity that requires the longest time in operation. So for your firm, that could be billing, timekeeping or any essential task whose process is slowing down the rest of your legal supply chain in a given case flow.

So the question remains, how can you optimize your law firm? Let’s take a deeper look at these seven waste types and learn how your firm can minimize or eliminate them entirely to improve your practice and increase revenue.

 

Seven Types of Waste

 

Overproduction

This type of waste results from producing more than what your client or the specific matter is requiring at any point in time. Overproduction leads to work pile ups that prevent efficient law firm operations and time management. To determine if you’re falling victim to overproduction, ask yourself these four questions:

 

• Is one part of the firm producing more than others can handle?
• Is there a way to help supplement the slower workers to leverage that production?
• Are you doing too much of one thing past the point of it being productive?
• Does what you’re working on have to be done right now?

By answering these simple questions, you can pinpoint the areas in your firm that are overproducing and eliminate the bottleneck effects that are caused by unsynchronized work production.

 

Inventory (your matters) and Waiting

It is a common thought that more clients equal more money. Which in a sense is not wrong. However, the money spent on marketing campaigns and inbound leads to get those clients add up very quickly. More often than not, there are matters in progress that aren’t closed and collected on. In the process of waiting for these matters to close, you are losing time and income. In order to optimize your workflow, think about these three questions:

 

• Are you closing out cases promptly? (If not, is anyone at the firm holding up the process?)
• Are you collecting payments as promptly as possible?/Can your billing be faster?
• Are you making it seamless and for your clients to pay you?

Automation is the easiest and most reliable way to ensure these two waste types are being minimized. Allowing your clients to pay online and setting up recurring payments will ensure your billing process is optimized and the income you’re waiting on is collected as efficiently as possible. Before you spend money to increase your workflow, look at ways to improve your current process. This will not only save you money in the long run, but it will make you more too.

 

Transport and Motion

One of the biggest waste of resources for attorneys is the amount of time lost searching for documents or information. Using technology to quickly navigate through documents and instantly pull information is crucial. Eliminating the time and effort that’s wasted from manually sifting through file cabinets will speed up your operation and lead to an increase in revenue.

Adopting technology that will also allow you to go paperless will reduce these two waste factors. Simple steps like capitalizing on electronic signature programs like Docusign, emailing your bills, and meeting your clients virtually to reduce commute and travel time, will all aid in your production and efficiency. Even things as simple as setting up your workstation in a way that will allow you to quickly move around and find the information you need faster will contribute to eliminating transportation and motion waste.

 

Overprocessing

Overprocessing is the act of doing something in a more complex way or adding complexity to a process that could be much simpler. For example, it is no secret that billing is a burdensome process, but there are ways to make it easier. Let’s look at these four questions:

 

• Do you send out paper or electronic invoices?
• Are you sending them out in batches?
• How do you generate invoices?
• How do you create documents?

Utilizing technology to automate your billing and document creation will not only reduce human error, but save your time! Manually printing a bill, folding it into an envelope, addressing, and then mailing it is inefficient. Becoming a Lean law firm means losing those inefficiencies and adopting strategies that will maximize your time. That is Lean management!

 

Defects

Quality errors that cause defects invariably cost you far more than you’d expect. Every defective item requires rework or replacement, it wastes resources and materials, it creates paperwork, it can lead to lost clients. How often do you have to redo work? Have you ever gotten into trouble with a judge, client or your bar? Utilizing a system of automation will reduce these errors and produce more uniform results.

Now that we have covered the seven types of waste, how do you quantify your success? The Lean method won’t work its magic on your firm overnight. Do not expect to eliminate your waste all at once, instead follow a practice of continual improvement and watch the results follow.

 

Quantifying Success

The best way to eliminate waste is through automation. Most, if not all of the waste types can be solved with technology, but how else can you determine if the Lean method is right for your firm? Let’s look at a few terms to help quantify your efforts.

 

Cycle Time

Think of cycle time as being the total duration, from start to finish, of a process that’s defined by you and your clients. For law firms, cycle time is the amount of time it takes you to start and complete a matter. Kanban cards or platforms like Trello, allow you to track your matter progress and measure how long it takes you to move through the entire process. Invariably, shorter cycle times will lead to more revenue.

 

Throughput Rate

Throughput is used to measure your business process flow rate. This metric is important to gauge the effectiveness and efficiency of your operation. For law firms, this could be the number of finished matters in a designated amount of time. So, how do you increase your throughput rate? By decreasing your cycle time. How do you decrease cycle time? By eliminating waste and adopting the Lean principles. Is it all making sense now?

 

Average Case Unit Value (ACUV)

ACUV is the average value in dollars brought to your firm from each matter “unit.” If you know on average, how much each case brings in, and how many cases you take and finish within a given amount of time, you will be able to predict what your yearly revenue will be. Just remember this formula: Income = Throughput Rate x ACUV. With all models, it is important to remember that there will be an element of simulation.

A lot has been covered here. But don’t worry! Your first step should be replacing your manual processes with automated ones. Although that may seem like a pain at first, the amount of time you will save and efficiencies you will create will help significantly increase your revenue. Eliminating the seven wastes is something that can be done through the implementation of Lean and the various Lean tools.

Remember, use the principles of Lean to identify the value you bring to your client first. Only then can you identify and remove the waste hindering your firm’s ability to drive revenue.

Want to learn more about how your firm can become Lean? Check out Principles of a Lean Law Firm: Creating a Framework to Optimize Your Business

 

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For one-third of law firms, a 2019 survey revealed recruitment is among management’s top challenges. There’s no doubt about it: the dip in specialized talents, as well as the pitfalls of education in recent years, are simply not meeting the needs of the modern firm. Certainly, attracting the next generation of legal talent has its fair share of demands, especially when it comes to new needs in technology.

Of course, you’re well aware of that. It’s a matter of what those changes are – and how to implement them smoothly and effectively – that becomes the bigger obstacle. Because not only do you need to hire that talent, you want to retain them to be your future leaders, too.

Here are some tips on how you can incentivize new talent to join your firm:

Align With Their Core Values

Most firms function similarly, so it won’t be day-to-day operations young talent look at when job hunting. Instead, these stars are searching for a place that aligns with their morals and values. These values, indicative of your company’s culture, are going to be your “secret sauce” to distinguish yourself from other firms.

Pinpointing your values originates in two key places: flexible work policies and sustainability efforts.

Flexibility

Millennials and younger generations prefer versatility in their workday. Gone are the days of eight hour workdays sitting in front of a computer pushing paper. The more effective technology available that takes manual, iterative work out of young lawyers’ days, the better. These workers want fulfilling careers that move the needle for clients – so balancing that desire with a flexible work schedule rewarding dedication with remote hours is sure to make your firm more appealing than others out there.

Many law firms are now offering flexible work policies, so if you haven’t yet, consider implementing work from home days as a perk to the job. It goes a long way with this new workforce, and you could get passed up for a firm that does have it.

Corporate Social Responsibility (CSR)

Championing social and environmental causes outside of your firm is an important aspect the younger workforce holds in high esteem. Keep any notes of causes you support in your job descriptions and recruitment notes, and prospective employees are sure to take interest.

If you aren’t currently making monetary donations, consider a volunteer day at a local soup kitchen or a toy drive during the holidays to help your local communities. Current employees may have ideas on who to reach out to through Facebook groups or other Instagram pages. This is all part of the desire for emerging talent to make a difference bigger than themselves – and what better way to do that than through helping the environment and future generations?

Technological Efficiency

Gone are the days of legacy, on-premise dinosaur computers that aren’t mobile or user friendly. Like many industries, firms are going digital, and new lawyers are going to covet systems that work with their flexibility, not against it. The easier your systems are to learn and use, the more people will use technology to make their jobs better (your accounting department will also thank you when they regularly enter their billable hours and client matter notes).

Of course, nothing happens overnight, so if you are in the market for revamping your system, notify new lawyers about the process during recruitment and add their input is valued in order to bring in the best possible new upgrades to the firm. This new generation loves knowing their feedback is taken into account, and it makes them feel like they’re being part of a positive change.

Career Advancement and Mentorship

Offering non-monetary incentives during recruitment is crucial for young workers. In this Robert Half Legal survey, one in four (25 percent) of lawyers interviewed said that leadership or advancement opportunities are the most attractive incentive. Like most careers, lawyers will need to learn on the job, and learn how things work at your firm specifically. The best way to navigate the twists, turns, and mistakes and turn them into victories for your firm is to have top associates and talent guiding them.

Show your aspiring talent you will prioritize their ongoing growth, and you’ll have loyalty and commitment from them to work hard.

Continuing Education

Not everyone you’ll hire will be lawyers, but they’ll still need to know the requirements of law they’re working within. There’s been an uptick in one-year master’s programs offering Legal Studies, which helps prepare students for the business aspects of dealing with courts and law. This could be a useful incentive for employees.

Of course, take time to assess the needs of your current workforce first, but when you look to other positions, you could offer tuition reimbursement for a certain amount of tenure at your firm. Not only will this help with retention, it will demonstrate your commitment to their ongoing improvement and career excellence.

Competitive Salaries

While money is not the end all be all when it comes to hiring new talent, it certainly can get their attention. As stated in the aforementioned report, a competitive base salary can make a huge difference when looking to recruit top talent. Be sure when recruiting to offer salaries that meet and exceed the job market trends – this will help attract star players who have the potential to enrich your firm’s services.

This isn’t a one time thing, either – as salary trends are constantly changing, it directly affects employees’ feelings of worth about their jobs. When it comes to promotions and market level compensation, if you’re not adjusting based on their performance and worth, there’s a chance they’ll end up going somewhere else that will.

Find Top Talent and Keep Them

In order to survive through the digital age, you’re going to want talent that will drive your business and its clients forward. Since this educational gap doesn’t look to be filled in the near future, it’s up to you to create incentives and help bolster your incoming talent to be the very best.

We hope these tips helped you keep on top of recruiting top talent for your firm, and that you’re ready for the continued digitization of day-to-day processes.

Have questions on digital services for your firm’s matters? We’re here to help. Centerbase works with hundreds of law firms to improve processes and speed up the billing cycle while still keeping true to accuracy. Learn more by subscribing to our blog or contacting us today.

Peruse any standard law school syllabus, and you’ll find a class – and a curriculum at large – that rewards individualism. An attorney’s entire career rides on their sole expertise to attract clients. With this in mind, from test scores to days in court, it’s no secret attorneys often prefer to practice separately. It’s easier, not to mention they don’t have to rely on someone else – and thoughts of “What if they steal my client?” can be put to bed.

But it’s lonely and risky at the top. We’re seeing the narrative is starting to change with the advent of successful collaboration and the value it’s bringing to law firms. (Who knew working together could pay off so well?)

Legal collaboration “involves specialists working together substantively to deliver a project rather than experts working separately in disciplinary silos.” (Source)

Distinguished Harvard Law School Fellow Heidi K. Gardner uncovers the empirical, often unlocked potential of collaboration: that “clients served by multiple practices are far more likely to retain their law firms for longer – even when the client-relationship partner leaves.” The higher margins brought on by attorneys working together are often ignored due to the inherent risks and lack of competency trust. After all, as we mentioned before, attorneys are led to their profession on the efficacy of their own work; their own test scores; their own intellect. It’s far easier to trust yourself than another associate in an area of law you’re not well-versed. And what if they take your client?

On a surface level, matter collaboration may not seem palatable to risk-averse firms, but the long-term payoff reaps considerable rewards for attorneys by helping them gain a wider breadth of experience and higher payment margins – often by hundreds per hour in a few short years.

So let’s demystify the stigmas around collaboration and discuss how you can take actionable steps toward adoption of its practices in your firm:

Traditionally, law firms only replace their practice management and billing software every 10-20 years, so evaluating new products after all that time can be overwhelming.

Not only have all the software products changed since the time the firm purchased their current system, but the underlying technology has also changed; so the questions they should ask a software vendor have changed as well.

Over the past few years, I’ve put together a list of ‘gotcha’ questions I provide law firms transitioning to new legal software. Firms usually only ask a few, if any, of these questions when they’re speaking with software companies, but it’s important you ask each software vendor ALL of the questions below:

1. Is the software fully cloud-based?

Some cloud-based practice management and billing software packages require you to install applications on a computer for administrative purposes or in order to use specific tools. Make sure you understand the technical specifications for using their software. For instance, at Centerbase we have Microsoft Outlook and Word add-ins to track time that only work in a Windows environment. If a firm uses Mac computers, they won’t be able to use this feature properly. If you want more information on cloud-based software, check out our white paper 10 Mistakes to Avoid When Choosing Cloud-Based Software.

2. Do a vendor’s security and data redundancy policies match the law firm’s clients’ requirements?

Make sure you fully understand how the software vendor works to protect your client data. Request a security and data redundancy whitepaper. If you work with large corporations, insurance carriers, banks, or health care providers, check if the software vendor’s security and data redundancy practices match the standard practices you’ve agreed to with your clients. Also, look into your liability insurance and the level of data security they require.

3. How can we import our current data? And better yet, how can we export our data from your system?

If your firm is like most firms, you’ve used your current software for 10-20 years and over the years, you’ve built up a lot of historical information on your clients. Talk to the sales representative (or better yet, have someone from their implementation team on the call) about what information they can import into their software.

Here are a few examples of ‘gotcha’ situations:

• Emails – Most software companies can’t import emails from a previous practice management system, so you’re left with referencing the old system or losing that history. If this is something your firm uses heavily, make sure you understand the options.
• Calendar – Do you need your current calendar entries synced with the new system? A lot of software vendors can only link your software with new entries created after you move over. This means you’re stuck looking at two calendars for a few months or even years.
• Billing History – Do you need all of the billing history from your previous system? Many vendors won’t bring over history, instead they’ll bring over starting balances. If you’re tracking compensation or origination from reports in the software, you’ll have a hard time calculating those numbers without the billing history.
• Accounting Data – I can count on one hand the number of legal billing software vendors who can bring over accounting data from a previous system – this includes journal entries or accounts payable history. Most small firms don’t bring this type of information over, but midsize firms sometimes want to.

Take a deeper dive into what features you'll want to consider importing in: What Should Be Imported Into Your New Legal Billing Software

Now on the flip side, what does an export from the new software look like?

This is a question many firms forget to ask or overlook when speaking with a practice management or billing software vendor. When you’re evaluating new software, you’re typically excited and not thinking about the potential breakup. With a cloud-based system, you don’t have access to the database (for security purposes), so the export is only as good as the tools the vendor provides you to export data.

We’ve dealt with a lot of firms migrating to Centerbase from our competitors and we routinely run into issues with billing data. Does the system link billing entries to bill records in a way that you can reconstruct bills with history? Typically they don’t, but it’s worth asking and understanding ahead of time.

4. What integrations do I need to purchase in order to do everything you’ve shown me in the demo?

I once had a client tell me they started a game while evaluating practice management and billing software. Every time they heard “we offer an integration for that” or “we have an open API” they’d take a shot (I don’t think they actually took shots since the demos were in the morning, but it makes a good story).

Sales representatives are trained to show you a cohesive demo and if the demo is going well, they sometimes forget to mention that what they’re showing you is an additional integration that requires you to pay more. At the end of the demo, make sure to ask them about all the different software they’ve shown you and how much each piece costs. Integrations can be game-changers if they’re done right (shamelessly throwing in a sales pitch: check out the Centerbase and NetDocuments integration) but typically, you have to buy both software packages in order for it to work. But don't stop there! Check out What Features Do I Need In a Billing Software.

5. How do you do [fill in the blank] in your software?

Make sure you think through all the firm’s processes and needs before your demo (or request additional demos). Then go over them with the legal practice management software vendor.

DO NOT let them tell you they can do something, instead make them show you how they do it. I’ve personally seen this happen many times, especially around billing requirements and features. If they don’t show you, there might be a difference in how their software operates and how your client needs to see something. A good example is how the software handles flat fee billing.

Overall, you’re making a big decision and you want to make sure you’re covering all the bases. No question is a bad question and a good sales representative should be willing to find the answer for you. Your legal practice management software is central to the entire firm’s operations, so make sure you do your homework.

If you think your firm is ready to take the plunge and pursue a practice management software, check out this blog about the 3 Types of Legal Practice Management Software to Consider for Your Firm.

There are many similarities between managing a practice management implementation and being a coxswain on a rowing team (for those who don’t know what a coxswain is, it’s the person who sits on the end of the boat and motivates the team to row faster) – your job is to make sure everyone is working in unison to achieve a common goal. If everyone rows hard together, you win the race, but if everyone is rowing at different speeds, the boat gets turned around in a different direction.

Over the past few years, I’ve been watching law firms successfully and unsuccessfully adopt practice management software. Very rarely do you get everyone “rowing” at the same speed right from the starting gun, but there are things you can do to make the transition smoother for your employees and increase your adoption rate.

1. Begin with the highest value changes

If you’re at the point of implementing practice management software, you should have a list of the features you wanted to implement because you had to pitch this list of features to the management team by explaining the benefits. If you don’t have a list, stop what you’re doing and make one right now!

Take this list and begin putting together a plan of attack. Personally, I like to first implement the features that bring the highest value and are the easiest to implement. This way, your team members quickly see the benefit of the software and your team morale is heightened.

If you’re having a hard time prioritizing, make a list of the features. Next to the list of features create two columns, one for “highest impact” and one for “easy to implement.” For the highest impact column, take the total number of features you’ve listed and begin to number them with the lowest number as the least impactful feature and the highest number as the most impactful. Next, do this same exercise for the “easy to implement” column with the lowest number being the hardest to implement and the highest number as the easiest to implement. Then, add up each row and begin implementing the row with the highest total first.

2. Roll it out in stages

I’ve seen law firms do entire practice management, billing, and document management software implementation at once, and although it’s possible, I don’t recommend it. I also don’t recommend going from 0 to 100 using practice management software either.

Why is this? It’s a big change for your staff and it can cause you a lot of personnel headaches along with a low adoption rate of the new software.

3. Pick super users at your firm

It’s always a good idea to have a few super users on staff. These super users are typically staff members that are more technical and well-respected amongst their coworkers. These super-users will do a few things at the firm:

• They’ll help troubleshoot problems once the software trainers finish.
• They’ll communicate with the software vendor when there are support issues.
• They’ll help boost morale when employees get frustrated with the software because they can’t figure out how to do something or a feature takes one more click than it did before.
• They’ll conduct ongoing training for staff to make sure there is a high adoption rate.
• They’ll take in all the ideas staff members have for making the program a better fit and either customize the software themselves or contact the vendor with a slimmed-down list of changes.

4. Invest in training

Many people view training costs as an added expense, but in reality, it is a vital investment because of its ability to boost adoption rates for any software at a firm. If this is the first time your firm has used legal practice management software, training is especially important because it’s new to your staff.

Training should be broken out into multiple sessions. In my experience, the staff begins to lose focus after about an hour.

We have a lot of great material on investing in your training and how to create a legal practice management software training program.

Implementing legal practice management software is rarely a walk in the park but if you commit to the steps above and have the right implementation specialist, I am confident your team will be more willing to make the leap. If you have more questions about implementing legal software, feel free to reach out to us – we are happy to help.