It’s no secret that good practice management is the key to a happy, strong and profitable firm. However, poor habits and shortcuts can, over time, make inroads into best practice, culminating in lower profits, higher risk and stressed employees. If this sounds like your firm, these five steps can help get things back on track.
1. Cut unnecessary costs
Unnecessary spending represents profits that could be going in your pocket but currently are not. Actively monitoring expenditure over a given period is a good way to reveal areas in which spending can be reduced or eliminated altogether.
Solution: Avoid targeting one particular area or practice group. Take a methodical approach to examining the expenses of each department within the firm. Be balanced! Making an expense examination for the first time need not result in a rampage of budgetary restrictions that prevent employees from doing their jobs properly. Ensure any cost cuts are sustainable in the long run.
2. Optimise fee estimates with on-hand data
One reason many firms resist the transition to fixed-fee billing is that they may underquote projects and lose out on fees. Similarly, a leading cause of client dissatisfaction is being billed heavily in excess of the initial quote. The solution? Learn to price jobs accurately.
Solution: The basis of a good pricing plan is understanding what the matter involves, the level of fee earner required to do it and how long it will take. Rather than relying on recollections of the last time a similar type of transaction was handled, take the time to review hard data on previous client rates, time spent and how close you came to delivering on your estimate. This allows fee earners to be more confident about their estimates and hit the mark more often.
3. Manage dates and deadlines effectively
A major cause of professional indemnity claims against lawyers is missed deadlines. In the majority of cases this results from an inadequate diary and reminder system. Failing to properly manage dates and scheduling places a firm at high risk of liability due to the possibility of pleadings or appeals not being filed within the prescribed time, expiration of a limitation period or inadvertent contractual breaches where time is of the essence.
Solution: Employ an electronic diary system with automated alerts that’s accessible to all staff, and maintain a database that’s dedicated to tracking key dates. In addition, consider using workflow software that requires fee earners to check off a step as it is completed and warns them if it is not completed by a certain date.
4. Manage client funds appropriately
Due to trust accounting requirements, a client’s cheque can often take a convoluted path through a law firm’s accounting books. Therefore, keeping good clerical and billing records is vital both to ensure compliance with legal professional rules and to create fee transparency for clients.
Solution: Manage your trust account with legal-specific accounting software that enables reconciliation, easy-to-read ledgers and simple trust-transfer functionality. This will prevent overdrawing on a client’s trust funds and enable extensive reporting options for auditing.
5. Implement software to make life easier
Taking care of the first four tips can be hard work to keep track of if your firm is still working off non-integrated paper based systems.
Solution: Make practice management easier by using a comprehensive practice management solution to automate your processes. This can enable your firm to operate more efficiently and profitably, manage risk and comply effortlessly with your professional and accounting responsibilities.
Consistency is the key to making best practice stick, so remember that commitment and regular reviews of your practice management procedures can go a long way in making your firm both a wise choice for clients and a great workplace for employees.