Managing a law firm is no small task. From keeping your clients happy to ensuring that you receive payment for your billable hours, running a successful firm not only requires high-level skills as an attorney. It also means you’ll need to know how to manage your business operations and staff.
Whether you’re just setting up your private practice or you’ve been successful as a partner for many years, understanding how to manage a law firm is crucial for your business. When you know the importance of a business plan, create systems for processes across your firm, and standardize your billing, you’ll be well on your way to optimizing your practice. Find out what these six impactful tips for law firm management could do for your team.
- What Is Law Firm Management
- What Makes a Successful Law Firm
- 6 Law Firm Management Tips
- Simplify Law Firm Management with Legal Software
- Outlook on Law Firm Management
What Is Law Firm Management?
Law firm management refers to systems and strategies that help you sustain a successful business. You can take many approaches to ensure that your firm is operating smoothly across departments and functions, including:
- Financial management
- Case management
- Attorney-client relations
- Administrative management
- Sales and marketing
Any area of your law firm can benefit from law firm management strategies, like your law firm business plan, in addition to:
- Documenting your policies
- Adopting standard operating procedures (SOPs)
- Optimizing operations, continually finding opportunities to improve systems
- Measuring your success over time
Whether you’re looking to grow your firm’s revenue, bring on new team members, or address long-term bottlenecks in your systems, you can leverage law firm management practices to ensure you take informed steps forward that can impact your firm’s future.
What Makes a Successful Law Firm?
When imagining what makes a successful law firm, attorneys will likely consider case victories, trial wins, or positive negotiations. All of which are crucial to attracting prospective clients.
However, a law firm’s success as a business also depends on a few more metrics. After all, you can win at every trial you take, but if your firm has trouble getting your clients to pay, keeping the doors open may be a challenge.
Here are a few more measurements of a successful law firm that you should consider:
- The agility necessary to change. From the rise of online consumer reviews to the availability of legal software, technological learning curves, and shifting client demand, law firms must be able to adapt to changes in the market, and ideally, ready to do so quickly.
- Adopting modern processes. New trends and technology pop up all the time, so it’s important for law firms to keep a pulse on legal industry insights and leverage resources as they become available to remain competitive.
- A client-centered approach. Your client’s happiness has a significant impact on your firm’s success. When you prioritize client communication, set clear expectations, and offer easy-to-use systems for clients to access bill payments or other digital documents, you may be more likely to see glowing reviews and get paid for your services on time.
6 Law Firm Management Tips
Set your firm up for success by practicing these six tips for law firm management.
Know the Importance of a Law Firm Business Plan
A law firm’s business plan offers you a blueprint for its future. It sets down in writing what you want to achieve and how you plan to achieve it. From determining your legal billing and fee structure, here are a few items that should be defined in your firm’s business plan:
- Setting a budget
- Establishing revenue targets and your goal case volume
- Setting your legal fee structure
- Detailing your services
- Determining a marketing strategy
- Establishing financial and non-financial goals
A business plan should account for many important aspects of how you’ll run your firm. Remember that these details can evolve as you grow as a firm, but having a place to start will help measure your business’ success over the long term.
Create and Document Policies and Processes Across Your Firm
Setting clear policies in writing is crucial for smooth operations internally and externally. Your team should have plans in place for:
- Client communications
- Setting up and closing case files
- Billing and invoicing
- Financial reporting and analysis
Your team should be on the same page about all core functions of your law firm’s business, and documenting policies for these functions of your practice will help you do that. It also ensures consistency in your approach — another necessity for a business.
The same goes for your clients. Your firm should have clear documentation regarding policies, such as for your fee structure and billing payment methods. Proactively communicating these guidelines helps reduce confusion and friction with clients later on.
Standardize Your Billing
As mentioned, having systems in place for all aspects of your firm’s operations is crucial — especially for legal billing. Have standard processes in place for:
- Tracking billable hours
- Invoicing clients
- Reviewing billable hours and invoices
- Payment methods
- Billing disputes
Prioritize Law Firm Marketing
You may wonder if law firm marketing is worth it. And the answer is yes.
In today’s competitive marketplace, having a marketing strategy is crucial to gaining clients and getting case leads. Your marketing efforts will also help ensure that you’re working to bring in the kinds of cases you want by targeting your ideal clients.
Whether you start with organic digital content, like a blog, or designate a budget for paid media ads, well-planned and executed marketing strategies can significantly impact your law firm’s success.
Monitor Key Performance Indicators
Key performance indicators (KPIs) can help law firms measure what they’re doing, determine if it’s meeting their goals, and refine their processes in the future.
For instance, you can use KPIs to track:
- Your case volume
- The cost of acquiring new clients
- Potential clients converted to leads
- The number of cases you resolved
- Billable hours
- Client satisfaction metrics
The KPIs a firm track is dependent on its definition of success. Your firm should have clearly defined in your law firm business plan and should select metrics that allow you to evaluate your performance towards meeting those goals.
For example, let’s say your goal is to convert more prospective clients per month from your Facebook ads. Your firm will need to set a budget, monitor Facebook ad spend, and track leads generated from those ads. PracticePanther makes tracking your leads by allowing you to create custom tags. Once a lead comes in, you simply tag them with the marketing channel or campaign they came from. For this example, you could tag them something as simple as “Facebook Ad.”
By tracking these performance metrics, your firm can make informed decisions about whether Facebook ads produce enough return (new clients) on the dollars you’ve invested over a defined period of time. You may even determine that this marketing strategy doesn’t work for your firm and you can pivot accordingly.
Nail Down Your Firm Structure
Attorneys are the core of what makes up a law firm. But the rest of your organizational structure can considerably impact your firm. By ensuring that you have the right people in the right roles and hiring for those areas that lack proper oversight, you’ll have the staff to execute all of these processes and goals you’ve outlined.
You may want to think about how to organize and hire for:
- Legal staff, such as paralegals and legal assistants
- Accountants and billing department staff
- Office management
- Marketing team members
Simplify Law Firm Management With Legal Software
Managing a law firm can feel daunting, especially for lawyers that may not have been looking to become business leaders or accounting masters. The good news is that you don’t have to take on all areas of law firm management yourself.
Legal software can help you ensure that your core processes and procedures run efficiently by keeping core business functions in one place like:
- Automating legal billing
- Ensuring staff operates via established workflows
- Legal document management
- Tracking your firm’s performance with reports
- Offering solutions for finance and case management all in one place
- Promoting remote work through cloud-based software
With PracticePanther, you can delegate the functions of your business that are the most time-intensive. You can set up invoice templates, determine when you invoice clients, and automate the rest. Alternatively, you can ensure that your clients have the easiest possible experience paying their bills — leading to more captured revenue for you.
Outlook on Law Firm Management
No matter your firm’s practice areas, one thing is certain: you’ll want to stay on top of changing trends and processes for law firms to remain competitive. After all, with the rise of tech spending by law firms in recent years, they’re investing more and more in improving efficiency in their firm’s management (Reuters).
By carefully monitoring and evaluating where your firm can improve efficiency and implementing the latest solutions, you can ensure that your team stays on a trajectory of sustained growth for years to come.
Take the guesswork out of law firm management with legal software solutions. PracticePanther offers legal case management, legal billing and ePayments, document management, calendaring, CRM tools, and more. Learn how you can get more done in less time by requesting a free demo today.
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