Legal Practice Management: How to Address the Top Challenges Faced by Today’s Small Firms
Legal blogger extraordinaire Robert Ambrogi recently published an in-depth summary of findings by Thomson Reuters Solo and Small Law Firm group. In his article, Ambrogi focuses on the challenges faced by small firms (firms fewer than 30 lawyers) and how they are addressing those challenges.
Top Challenges Faced by Today’s Small Firms
The top five issues that lawyers identified as their most significant challenges (which came as no surprise) were the following:
- Acquiring new client business (27%).
- Clients demanding more for less or rate pressure from clients (21%).
- Spending too much time on administrative tasks and not enough practicing law (15%).
- Cost control and expense growth (13%).
- Increasing complexity of technology (12%).
Of these major challenges, only a small percentage of firms have actually implemented changes to address their problems. The rest of the firms have not yet implemented plans to deal with these issues or they just simply don’t know how address them, PERIOD.
See the full summary HERE
How Can Firms Face These Challenges?
While issues concerning acquiring clients and dealing with their demands may not be outwardly controllable, there is much that can be done about excess admin time, cost control, and expense growth.
Ironically enough, these two issues can be rectified with the right technology. In this case, the right legal practice management software can go a long way to help ease some of the greatest challenges faced by small firms today.
The Role of Legal Practice Management Software
While it is true that technology today is evolving at an extremely rapid pace, there is no reason to fear or shun it. Many traditional firms shy away from technology because they fear the learning curve that is involved in using it. We’ve already explained how easy-to-use legal practice management software (or LPMs) helps firms with their time and billing and can even improve client service, so let’s take a look at how it can help with reducing administrative tasks, controlling costs, and promoting growth.
Reducing Administrative Tasks
The right LPM can significantly reduce a firm’s administrative time by offering automated tasks and workflows. Tasks such as billing and invoicing, which would normally take hours or days, can be condensed into minutes.
Even client intake and matter management can be automated to the point where each case begins with a pre-set template where most of the heavy lifting is already done for you. The amount of time saved using these features alone would be astronomical.
Rocket Matter, a pioneering LPM, offers such features as batch billing, multiple timers, client intake forms, as well as online client payments, just to name few. According to the software’s users, these features have the ability to reduce administrative needs by an average of 40%. This gives firms more time to do what they really should be doing: practicing law.
Cost Control and Expense Growth
The more a firm understands their financial situation, the easier it will be to control their spending, regulate their costs, and ultimately grow revenue.
Powerful LPMs offer in-depth reporting which allow a firm to view their key performance indicators, which indicate the overall financial health of the firm. KPI reports include:
- Utilization Rate (the amount of time you bill versus your target hours)
- Realization Rate (the amount of billable hours you capture versus the total hours you capture)
- Collection Rate ( the amount of money you collect for your invoiced work)
- Case Value ( how much a case is worth from a dollar perspective)
Running an efficient business means knowing your vitals, and the right LPM can most certainly help with this.
Ease of Use
Many LPM companies understand that technology can be extremely intimidating. Look for products which offer demos of their software before you decide to take the plunge so that you can get comfortable using the product. This should be enough to coax you into getting your feet wet with a technology that will ultimately do wonders for your firm.
The right legal practice management software is easy to use. If it doesn’t make your life easier, then it’s just not worth it. It’s not rocket science. With today’s available options, there is bound to be one that fits your firm’s needs and is a joy use.