You hear about law practice management software, legal practice management software, legal office management software, and it’s all confusing. So what is a law practice management software anyways?
In this article, we will dissect what is a law practice management software and how it can be relevant for managing a legal practice, if not absolutely essential.
In this post, we will cover the following topics:
- Managing workflows and business operations
- Ensuring the efficient progression of a legal matter
- Legal practice management as a central repository
- Legal document management capabilities
- Accounting, billing and time tracking capabilities
- Streamlining of client communications
- Law firm management and reporting
A law practice management software, or a legal practice management software, is a software solution designed to help lawyers manage their client matters and help law firms manage their business.
Your legal practice, at its core, is the provision of legal services to your clients in a strategic, timely manner and of high quality.
To run a successful legal practice, you must allocate significance to your legal operations and the administrative duties required so you can provide valuable legal services to your clients.
The administrative duties are not always harmonized in such a way that you will get pulled into a quagmire of inefficient processes and undesirable delays ultimately impacting your ability to serve your clients. When we say legal processes, we can most certainly also talk about process optimization.
Typically, legal operations are administration-heavy. If the back office activities are not managed adequately, they can lead to missed deadlines, misplaced or lost client information and costly errors.
To increase your law firm’s efficiency, minimize operational costs and to give yourself more time to actually practice law, you can turn to leveraging a practice management software to streamline all your law firm processes.
Let’s see how a law practice management software can help you streamline your business.
1- Managing workflows and business operations
It may be of no surprise to you that lawyers spend a lot of time on non-billable and administrative tasks.
According to Clio’s Legal Trends Report, a lawyer will spend on average 2.3 hours in a day on billable activity and the rest of the day on non-billable and administrative tasks.
71% of a lawyer’s time is spent on non-revenue generating tasks!
This is staggering!
There is no doubt that there is a significant opportunity for lawyers to increase their overall productivity and directly increase the operation’s profitability.
While individual lawyers are bogged down with administrative tasks, the law firm as a business is also burdened by endless operational procedures and tasks. With time, the processes keep piling up leading to operational bottlenecks that end up adversely impacting your clients.
Your law practice can benefit by adopting a law practice management software to automate and streamline tasks and processes consuming your lawyer’s time and creating unnecessary processes.
If you break down your law firm’s administrative tasks and business processes into its basic components, we can identify the following main areas:
- Case management
- Managing contact information
- Scheduling and calendar management
- Document management
- Task tracking
- Time tracking
- Recording billable time
- Payment processing
- Legal accounting
- Client communications
- Management reporting
- Deadline tracking
A legal practice management software can increase your firm’s overall productivity by allowing your lawyers and supporting teams to handle non-billable and administrative tasks more efficiently so you don’t have to stress about everything hampering your ability to give a great legal service to your client.
2- Ensuring the efficient progression of a legal matter
Another way that a legal practice management software can come to your rescue is by allowing you to ensure the efficient progress of your legal matters.
To be successful in your law business, you want to be in the driver’s seat when dealing with your client cases. You want your cases to be processed fast, quick and efficiently.
You want to have the ability to prioritize your tasks, keep track of your client’s information, easily access matter-related information, track your client meetings, identify the relevant deadlines applicable to your case and make sure that your case is advancing smoothly.
Most legal practice management software available today in the market offer such capabilities and that’s why they are so powerful in helping with your legal operations.
By ensuring your lawyers and support staff collaborate and pool matter-related information in the same centralized system, you can save time in looking and tracking down information about your file so you can make better day-to-day decisions.
In essence, a good case management system can provide you a significant return on investment no matter the size and type of legal practice that you manage.
3- Legal practice management as a central repository
With the volume of data and information that we generate every day, law firms are now under significant pressure to be more and more organized so they can keep track of all the information they have in their possession.
It is nearly impossible to operate an effective legal practice without having a central repository where you store all your legal and business information.
When you think about it, not so long ago, we had to manage a paper-based legal operation. The challenge we faced was to combat accidental loss of paperwork, destruction or even theft.
As a result, we made multiple copies of our paper records to ensure we had backup copies but ultimately, the paper copy was available only to the custodian of that piece of paper or file.
Those days are long gone. Now we are in the electronic age and that’s not going to change for the foreseeable future.
Your legal practice management software allows you to modernize your business and go paperless.
The electronic data and information coming into our possession can be stored immediately in your central repository. If you get paper-records, you can scan them and file them in your repository so you can have access to all your data.
You may need to keep some documents in paper format such as a negotiable document but this should not represent an important volume for most legal operations.
4- Legal document management capabilities
Legal document management capabilities offered by law practice management software are truly incredible.
Since your client and matter information is housed in a central repository, you can automate tasks such as assembling your legal documents or letters by leveraging the client information already stored in your platform.
You can search through your client data, tag your documents or index them so you can enhance your search capabilities when you need to find a document or refer to something in your client file.
By making use of a software, you can implement a legal document management system that will enable you to:
- Search and index your client documents
- Operate a paperless workflow
- Achieve a greater version control of your documents
- Easily give and remove access to others
- Electronically store your client data
- Perform automatic backups
- Generate and assemble documents quickly
The above list is not exhaustive but you can already see that a well-designed legal practice management software can provide you true value in optimizing your legal operations.
5- Accounting, billing and time tracking capabilities
Keeping track of your billable time, invoicing of your customers and getting payment is bar none the lifeblood of your legal practice.
You can offer legal services by charging your client by the hour, offering fixed-fee arrangements, contingency fees or a combination of any of these arrangements.
You need to keep track of your unique client arrangement so you can invoice properly.
You want to avoid confusing your customers with errors on your invoice, charging time that should not have been charged, charging wrong rates, applying an incorrect discount or making other errors that will give your client a heartburn and delay the settlement of your invoice. It can also affect your reputation as you want to present your work as error-free as much as you can.
Once more, the practice management software can help you solve this riddle. You can use your application to generate and send your clients their invoices, correctly, with the right rates and modalities.
In addition to that, you can perform all the back-end accounting activities as well such as reconciliation of your payments, journal entries, managing your disbursements and out-of-pocket expenses, handling late penalty charges, applying the right tax rates, trust account management, or any other variable that requires tracking for the specific customer.
There are stand-alone legal billing software out there but you can also find comprehensive legal practice management software solutions with a solid set of legal accounting features that will serve your needs as fine. Check out what to expect for an accounting software for law firms.
6- Streamlining of client communications
Lawyers can attest to the fact that clients are demanding and expect to be treated with priority all the time. This is ok, to the extent you can manage it. If you are unable to manage your lawyer and client communications, then you may potentially be steering your client out the door, for good.
Client communication management is crucial to develop a solid and long-term relationship with your client.
To this end, you can make use of a legal practice management software to provide your clients with a “client portal” where your client can access his or her file at any time through the Internet. This can save you a lot of back and forth emails, phone calls and follow ups as you will enable your client to self-consume the information needed when your client needs it.
With some software systems, you can also send your client emails through the application so the system can track and organize your communication. Further, you can book your meetings through the portal and do many other activities with your client that would have normally required you to have support staff to assist you with.
You can manage the exchange of client information through the portal where your client can upload relevant documents and download material that you make available. This process will streamline and centralize the communication channel with your client so nothing is lost and everything is tracked.
A good law operation should be able to manage its current volume of client communications impeccably. A great law operation will position itself to scale and handle an even greater volume in the future.
That can be achieved. It’s a matter of leveraging the right software technology to make it happen. If you don’t, one day, sooner than later, you will hit a plateau in how many people you can afford to hire in managing your inefficient processes.
7- Law firm management and reporting
Finally, the other main component of a law practice management system is its ability to provide you with useful reports and analytics on your legal operations and cases.
You want to practice law but to practice law you need to manage a law firm. The better you manage your law firm, the more successful you’ll be at practicing law.
A fundamental feature that a good practice management software will offer you is its ability to track your matters and tasks and ensure they are done, on time.
You can monitor business and financial metrics through your practice management system to stay on top of the financial and operational health of your business and ensure your long-term success and growth.
At the management level, you can also extract reporting essential for your day-to-day decision making but also to give you relevant data to make strategic decisions in the overall positioning of your law firm in the market. Data is king!
We hope that you have a better understanding of what is a legal practice management software.
We presented to you an overview of what is a practice management software and how you can increase your productivity and overall profitability by leveraging one.
At the end of the day, you are the master of your legal practice and your operations.
If you are reading this article, chances are that you already have some challenges to which you are looking to remedy. You may also be looking to further enhance and modernize your legal practice as you’ve already experienced the powerful results of implementing technological tools to support your legal practice.
No matter where you are in your growth stage, you can no longer stand on the sideline. To remain in business long-term, you have no choice but to look at modernizing your legal operations.
Implementing a legal practice software management is a great place to start.
Having said that, the practice management software industry has evolved significantly over the past years. You now have many vendors out there and have the option to evaluate different software solutions that can suit your needs.
We suggest that you evaluate your business challenges and draw a list of things that are critical for you to resolve. Consider how much you are paying for non-billable activity, administrative tasks and clerical activity. Define what could be a reasonable budget for you to leverage a software solution to help you with your admin work and finally reach out to a few vendors to see what returns on investment you can achieve.
In most cases if not all cases, leveraging a software solution will be more profitable in the long run than using many different systems combined with manual labour.
Are you using a practice management software at this moment and wanted to give us your feedback? Your comment is important for us.