By Jorge Sandrini
Is it more important for a law firm to do the right things, or is it better to do things right? Management gurus have long asked this very question. A common consensus declares that businesses which are able to excel at both are the ones that will eventually come out on top. While "doing the right things" is an idea that relates to effectiveness, "doing things right" is more about efficiency. Thus, when a law office has the proper systems in place, and more importantly is using these systems properly, they will see a rise in efficiency, which ultimately translates to increased productivity across the firm.
Most of the 2,200 law practices we've worked with often have much of the "doing the right things" part down pat by the time they come to us. They have an excellent team of partners, attorneys and support staff in place. They have strong relationships with long-time clients who value their service. And they've built a knowledge base from their experience within a unique set of practice areas that is both extensive and valuable. Where they typically need a boost is in the area of efficiency. And a law firm, like any other business, needs to maximize efficiency if it intends to compete and grow in the long run.
Time-saving technology tools, like case management software for instance, help law firms meet this need. But there are so many of these tools available from so many different vendors – case and document management, time & billing, accounting, scanning, reports etc. – that it's difficult to even know where to begin. That's where an integrated practice management system comes in. Law firms properly utilizing these systems gain an advantage over firms who don't, both in terms of efficiency and overall productivity. To better understand how, first let's take a look at the relationship between people, technology and productivity.
Business managers often talk about three ways in which productivity can be increased: more labor, greater investment in technology, and third, increases in the level of efficiency between the two. It's this final piece of the puzzle that is often the most elusive. You can have a strong team in place with great talent, and you can choose to re-invest your firm's profits into productive technological assets. But for many businesses, and law firms are no exception, there is often a substantial gap between how much output a business is capable of and how much it actually produces. Business analysts refer to this relationship between people and technical resources as total factor productivity, which examines the level of efficiency between these two resources. In a law office, we can take the same approach to determine whether people and technology are being properly utilized to produce the highest levels of efficiencies, and ultimately profits, for the firm.
In a nutshell, to increase the output, we have to take a hard look at the input. There's a saying "if you always do what you've always done, you always get what you've always got." What this saying lacks in sophistication, it makes up for in common sense. If shortcomings found in your management software is what you've "got", than it's time to consider what software convergence can do for your bottom line.
Unless your law firm is entirely different than most, there is a good chance from a people perspective that your lawyers and support staff are already doing all they can, regularly putting in long hours in order to stay on top of large and ever-increasing case loads. After all, lawyers have long had a reputation for being among the hardest working professionals of any industry. And given the high costs associated with adding additional staff, it would be no surprise that the greatest available margin for improving efficiency within a law office is often found on the technology side of the equation.
When we talk about efficiency, of course, what we are really referring to is time. After human resources, time could be considered the next most precious of all resources within a law firm. Squander it, and you'll soon find yourself struggling to stay afloat. Manage time to its fullest, however, and you'll reap the benefits in the form of higher profitability. Practice Management systems are designed primarily with this goal in mind – to help law firms work more efficiently in order to save time and produce higher profit margins.
The simplicity of these systems can be deceiving. A Practice Management system, by definition, encompasses a number of operating areas: case and document management, accounting and financial management, business intelligence and reporting, and even marketing and business development. For defense and transactional firms, time & billing functions are also included. For plaintiff/contingency firms, a system might include call intake and settlement processing features.
So much functionality under one roof can seem daunting. In fact, nothing can be simpler. All of these functions are central to the daily operating needs of any law firm. Inefficiencies can arise when a 'best-of-breed' approach makes it necessary for staff to utilize multiple systems running on separate databases, especially when there is the potential for incompatibility between them. Further, the need to input data multiple times across various systems can have a draining effect on the productivity of a firm, and increases the risk of error. As a result, time is wasted, and your technology fails to live up to the reason it was implemented in the first place.
Taking a look at some of the time-saving benefits helps us get a better understanding of what can be gained with a fully-integrated practice management system:
1. One System Equals Greater Efficiency
All-inclusive systems eliminate the need to evaluate, purchase, link and maintain assorted software products from a variety of vendors. Firms save money on IT costs and reduce the time and effort required to train employees. Furthermore, these systems utilize only one database. This eliminates duplicate data entry and helps ensure that the information in the system is always accurate and up-to-date. Attorneys and staff work more efficiently in this environment because there is no need to work across a disparate variety of software systems.
2. Direct Access Tools for Timekeepers
Defense and transactional-type firms highly benefit from advanced time entry tools offering enhanced review and pre-bill capabilities. With these systems, timekeepers have direct access to all of the time entry data they've entered into the system, allowing them to make changes and corrections as necessary before submitting for final billing.
3. Instant Access Financial Summaries for Case Management Users
Practice Management systems allow front office (case management) users to access views of outstanding invoices on the fly. Attorneys and staff are enabled to better understand the financial history of a client they deal with on a daily basis. Information that typically requires individuals to submit requests for data to the accounting department can be viewed easily by authorized users. There is no longer a need to call or email accounting for trust balances or aged accounts receivable information related to client accounts or cases.
These time-saving benefits represent only the tip of the iceberg. Case costs, for instance, are easily managed through features that allow attorneys to enter costs into the system. That information is automatically sent to the accounting department which can then issue payment at the press of a button. Plaintiff and contingency-based firms can also enjoy time-saving benefits by being given easy access to case costs, referral fees and an assortment of pertinent financial information via automated settlement statements. These systems help streamline negotiations between parties. At settlement, funds are automatically processed and disbursed, saving significant amounts of time and effort on behalf of the firm.
Closing the Output Gap
By focusing on the relationship between people, technology and productivity, law office managers can zero in on the factors preventing the firm from realizing its true potential. It's simply not enough anymore for firms to focus on being highly effective without emphasis on being highly efficient as well. Managers must measure the current gap between potential output and real output, and take actionable steps in the right direction.
Technology, once overlooked by many law firms, now offers the best opportunity to close the gap. Benefits acquired in the form of real time-saving dividends provided by integrated practice management software will ultimately enable firms that are doing the right things to also do things right. If you've considered shedding the excess baggage and implementing a single all-inclusive software system that handles all of your management processes under one roof, let me conclude with this double entendre: Isn't it about time?
Learn more about how Client Profiles Case Management software can provide real value to your practice. Schedule a demo at www.ClientProfiles.com/demo.asp.