How to Effectively Manage Your Law Firm
Law firms need to be effectively managed, just as any other business needs to. With all the challenges and distractions that the managing partner and board of directors have, doing so can be difficult. These five tips can help to improve on the management process and make for a more effectively run business.
A legal case management software program can help a law firm to organize information on their various cases and clients more effectively and allow for better overall management of these cases. Using a Legal case management software program can help to store information that is relevant to the case and to avoid having to try to find the right information over and over again. A differentiated case tracking program
will help to make sure that you pull the right information for your case such as reports from the legal information institute
or direct communications from the director of state courts
. Having this easy to access information at your fingertips makes this software an efficient and effective software option for your law firm. Organization and saved documentation can help to improve your outcome in cases and improve the efficiency of staff members.
Using a Legal Billing System
Law firms need to bill their hours to clients in order to earn and collect their revenues for services extended. A Legal Billing software system in which employees record their time and make notes for their charges in order to bill clients with the least possible friction with them possible. By using a Legal Billing software system law firms can accumulate valuable information on their customers and employees so that they can effectively charge them. Many are also integrated with their accounting systems to make invoicing simpler to handle and with better information attached to each invoice as support for the charges on the invoice to improve chances that the invoices will be timely paid.
Developing Key Performance Indicators for Your Business
Key performance indicators, or KPIs, can help the management of your law firm to quickly understand the results of the organization and to identify areas to examine for potential improvement. While the law firm itself will have to determine which KPIs are important to fund management, here are some KPIs which might be important to the management of your law firm:
– Billable hours per employee to gauge staffing levels and productivity
– Revenue per partner to see if they are over or under utilized
– Hours and total charged by case including pro bono and hourly billable cases
– Administrative costs for escrow balances maintained
– Hours spent on charitable cases
– net income and profit
– profit per employees
– g&a costs compared to total costs to show efficiency of operations
– revenue per lawyer versus the payroll cost of each employee
– billable hours for each partner and client and case
A law firm case management software program can make it easy to accumulate relevant information so you can track the appropriate KPIs in an more organized way. Over a period of time these KPIs may indicate the impact that different measures you put in place had and provide information on whether a different course of action is needed.
Developing Strong Accounting Department and Financial Reports
Law firms often don’t invest much in an accounting department but a quality bookkeeper and easy to use accounting software can be a real difference maker when it comes to generating useful reports to use in managing your law firm. If you don’t have the resources to bring in the right internal talent hire a cpa firm to provide your firm with the tools to gather the appropriate financial information for decision making.
Understanding that Improvement is Gradual and ongoing
Rome wasn’t built in a day and you can’t expect your law firm to become a perfectly managed entity that quickly either. Strive for continued repeat and regular improvement and give employees and partners of your law firm time to get onboard. Of course, if there are any bad eggs in the law firm you should remove them immediately but if there are simply those that need effective guidance and organization for improvement then be pateient with them and provide them with the tools that they need to thrive.
Managing a law firm is difficult, similar to any other business. While the right billing and law firm case management software can help, regular management processes like monitoring and training employees is needed as well.