Current economic pressures pose significant challenges to law firms just as they do to many businesses around the country. A confluence of issues, including a tight labor market and rising costs, challenge firm leaders to grow revenue and profits without spending more money or adding staff.
Moreover, clients’ expectations around convenience and the use of technology are undergoing rapid changes.
Challenges Law Firms Face in 2022
Here are a few of the challenges we hear from our law firm clients:
- Lack of qualified hiring prospects
- Rising costs of supplies and compensation
- Clients expect efficient, modern, technology-infused means of communicating and collaborating
- Increasing cybersecurity risks
- Greater need to support remote workers
- Objectives that include growing topline and bottom line results
How the Right Practice Management System Can Help
Business leaders love it when one project or strategy can deliver multiple benefits. Adopting a modern practice management system is one of those undertakings that can do just that. In fact, when we assist a firm in evaluating and more fully leveraging SaaS solutions, we usually find that there are wins for both the firm and its clients.
Benefit #1 - More Billable Time
It is common for lawyers and other professionals in a firm to only bill two or three hours of each workday. Especially given the challenging labor market, maximizing the amount of time each revenue-generating staff member can focus on client work is critical.
Here are a few ways that the right practice management system can increase available billable time:
- Streamline administrative tasks. Comprehensive practice management systems are able to house all client information and digital records, eliminating duplication of entry into multiple systems. Additionally, features that allow clients to complete intake forms electronically themselves dramatically reduce the need for firm staff to perform data entry.
- Generate standard documents quickly. A real win/win for law firms and clients alike, document automation tools can rapidly populate standard templates with client and matter details. Lawyers and staff can focus on review and customization, clients recognize higher value from billable time spent, and the firm increases its capacity for work.
- Automate client billing and collection. When time and expense tracking are handled within a comprehensive practice management system, the whole invoicing to collection cycle can be optimized to not only reduce the amount of effort involved, but speed up collection and reduce bad debt. Firms that accept credit cards, for example, get 85% of their invoice paid within 1 week, according to Clio’s 2019 Legal Trends Report.
Benefit #2 - Improved Client Experience
There is no question that the COVID-19 pandemic has permanently altered how accepting consumers and providers are of electronic communication and technologies that enable remote collaboration, such as video conferencing.
Clio’s 2021 Legal Trends Report confirmed this notion. According to their survey, the percent of law firm clients that look for remote options when hiring a lawyer jumped from 23% in 2018 to 79% in 2021. While in-person meetings and live phone calls are still highly-valued, this leap in interest for working with an attorney remotely was true for the client intake phase of the lawyer client-relationship as well as throughout the matter resolution phase.
Some specifics for how adopting a practice management system can enhance the client experience:
- Intake process speed and security. Materials from the client can be entered and/or uploaded directly into a secure document management environment, complete with access control and tracking. Moreover, having the client enter details directly into the system eliminates manual data entry steps, saving work and allowing the lawyer to start assisting the client sooner.
- Increased value delivered for the cost. When billable time is concentrated where the impact is greatest, instead of on administrative tasks, clients will get more help faster, perhaps even experiencing lower bills in the midst of increased billing rates for firm lawyers and staff!
Improving your clients’ experience stands to position your firm as the modern, efficient, go-to practice for future matters and referrals.
Benefit #3 - Improved Security for the Firm and Its Clients
No businesses, including law firms, are exempt from cybersecurity risks. In fact, studies show that law firms, small and medium size law firms in particular, are some of the most frequent targets of cyber attacks. Why? A breach of a law firm likely yields an attacker greater value because they would gain access to information of multiple individuals and companies. Plus, smaller businesses and firms are perceived by hackers to be easier targets to penetrate.
While essentially all businesses have strong incentives to develop cybersecurity protections and hygiene, law firms have an enhanced level of responsibility. For example, The American Bar Association spells out obligations of competence, diligence, confidentiality, and supervisory responsibility (which extends to the suppliers to your firm) that have cybersecurity implications. In addition, there are Federal, State, regional, and local regulations to consider, including breach notification laws and California’s Consumer Privacy Act.
How a modern practice management system can improve cybersecurity for both the firm and its clients:
- Secure environment for documents. When coupled with good policies and practices, reinforced by training, client documents can be more safely maintained. Access controls and logs offer greater security and traceability than paper and electronic copies stored on personal computers.
- Secure environment for client communication. Practice management systems, designed for law firms, are equipped with secure client portal environments that allow for communication and collaboration.
- Secure payments. When extended to include online payments capabilities, practice management systems securely manage transaction and payment method information.
For more information about how to effectively mitigate cybersecurity risk, check out Cybersecurity Controls in Your Law Firm.
Selecting and fully implementing the right practice management system can be transformational – allowing your firm to increase productivity and profits while delivering an enhanced experience for your firm’s clients.
We put together a presentation with Clio highlighting some of the latest features in practice management software. Watch it here: