Law firm “worst practice”, and how to avoid it
As anyone working in the legal industry will know, remaining competitive year after year requires a commitment to innovation, and the right technology choices. For smaller practices, especially start-ups, this is especially true. Driving profit and sustained growth should be less about working long hours and more about doing things more efficiently. For firms of all sizes, success or failure often comes down to making (or avoiding) the same mistakes time and again.
Here are four of the most common “worst practice” mistakes made by law firms, and how to avoid them.
1. The lack of innovation
‘We’re a law firm, we don’t need to innovate’
Just because law firms have operated profitably for decades, doesn’t mean that business models can’t be improved. Increasingly, legal professionals are embracing the Silicon Valley attitude of disruptive business strategies and relentless innovation. That means firms using technology in new ways to increase their profitability and their efficiency to reduce their overheads. We’re already seeing the emergence of ‘virtual’ law firms that operate in multiple, disparate locations; truly mobile-enabled lawyers operating independently from a physical office; and innovative new service delivery models. Whereas smaller firms, being more fleet-of-foot, are arguably best placed to drive innovation as the source of genuine competitive edge. An ability to innovate and adapt is essential to the survival and growth of firms of all sizes.
2. Poor document management
‘Our practice management strategies work just fine’
One of the biggest inefficiencies we see in law firms relates to their practice management processes; whether that’s recording billable time, organising and filing documents, or sharing and collaborating on cases. Lawyers have a habit of sticking to what they know, and this is particularly true in relation to document management.
Relying on ‘legacy’ paper-based methods when filing and searching for documents in a cabinet, or coming up with naming conventions can have a huge time cost. Conversely, storing all files related to a matter in electronic folders facilitates collaboration and document sharing within firms and enables current and past matter information to be quickly located. As an example of the collaboration benefits, many tools allow users to share notes appended to uploaded documents. Poor practice management strategies can also cost a firm more than just time. It’s not uncommon for lawyers to inaccurately track and recover time spent on matters. Electronic practice management tools allow professionals to maximise revenue by fully recording and invoicing every billable minute of their day, even when they are off-line.
3. Sticking to old pricing structures
‘Our existing billing and pricing models are future-proofed’
Clients have never been more clued-up and challenging of traditional legal billing structures. Historically, time based billing rewarded firms for their inefficiency. Today, clients are quick to challenge firms if they perceive them to be “running up the bill”. Consequently, law firms need to increase their focus on the efficient delivery of legal outcomes and reflect this in transparent and defendable bills.
In parallel, firms need to embrace alternative pricing structures to remain competitive and drive improved client satisfaction and, as with innovation, small firms are extremely well placed to lead industry change in this area.
4. Failing to invest wisely
‘We don’t need to invest in technology’
In the legal market, the only constant is change, and this has never been truer than in today’s era of fast paced technology transformation. To mitigate downward pressure on billing rates, the right technology can provide legal professionals with the ability to do things more quickly, accurately, and with less effort. That might mean using tablets and smart phones to enable mobile working, it might mean embracing electronic knowledge management - allowing for quicker and more efficient research practices.
A failure to effectively leverage technology is not a badge of honour. It is the equivalent of working with one hand tied behind your back. To ensure your firm is appropriately technology enabled, you need to be receptive to change and seek out proven technology solutions from trusted providers.