Using legal technology is a major key to your law firm’s success

Considerations about financial and matter management software for decision makers

Over the years, technology has changed our lives in myriad ways. We have more options than ever for tools that help us get our news, buy our coffee, navigate our morning commute, and run our organizations.

Law firms have unique businesses, and often what works well for other kinds of companies is not suited for the specialized needs of the legal industry. Through the use of legal-specific software for financial and matter management, firms can become more efficient and productive, and enjoy greater success.

Decision makers at law firms have a lot of information to consider when thinking about software solutions. Is your current system for financial and/or matter management the best for your firm? Was it built specifically for law firms? Has it been customized to suit your needs? How would changing your system impact your firm?

This article aims to provide some information and raise some thought-provoking questions about the billing, accounting and matter-management solutions that law firms rely on to run their businesses.

Legal-specific financial software

To customize generic accounting software to the point where it is effective for law firms can be very time-consuming and costly, and still may not provide an ideal solution. With special, legal accounting requirements, and potentially significant penalties for compliance failures, law firms can benefit from software developed specifically to assist them with their accounting and billing needs.

Legal-specific financial software is intended to help law firms to:

• Streamline their finances with integrated billing, accounting and reconciliation tools.

• Capture more billable hours with intuitive timekeeping options.

• Automate certain functions to allow firm staff to use their time more effectively and efficiently.

• View insights through detailed reports and dashboards on a variety of financial matters.

• Manage client trust accounts and IOLTA accounts, maintaining clear separations between these and the firm’s general operating accounts.

• Avoid issues by use of legal specific features and functions (such as preventing overdrafts on client trust accounts).

• Prepare reports and documents to assist in the case of an audit by a Bar Association or other such entity.

• Produce customized bills and statements for clients using various fee structures, billing cycles, and rates, depending on specific needs.

• Set targets for billable hours and analyze productivity.

• Allow various levels of access to financial information, activity, and transactions to individuals at the firm, based on their roles.

• Provide individuals with secure access to system data either remotely or on-premises.

Since many law firms work with accountants, it is also important that the software will provide accountants with the information they need to achieve their objectives. Many accounting firms are much more familiar with generic accounting software, and may not be aware of the advantages that legal-specific software can offer. Fortunately, some law firm billing and accounting solutions can export data to these more generic software formats if needed.

The advantages of legal-specific financial and accounting software solutions are numerous. The systems are designed to much more closely match the specific needs of law firms. Many such software tools are very customizable, and can be tailored to optimize processes for firms based on their size, practice areas, staff preferences or other unique requirements.

Matter management software

Successfully managing a large number of legal matters simultaneously requires a sophisticated coordination of information, communication, and activity. Without digital tools to assist, law firms would spend far more time and effort on organization, and less on serving their clients. Specially designed matter management software can help firms to keep proper schedules, meet deadlines, keep clients informed, reduce malpractice risks and more.

Matter management software is intended to help firms to:

• Keep contacts, emails, documents, meetings, tasks and appointments organized and associated with matters.

• Be more efficient by use of automation for tasks and workflows.

• Regulate access to information and documents to preserve data integrity.

• Maintain records of work related to each matter.

• Manage document retention.

You can expect a quality matter management system to offer:

• Calendaring, scheduling and tracking of billable time.

• The ability to set up triggers and reminders to help firms comply with statutory requirements and deadlines.

• Document management with shared access to files.

• Contact management.

• A shared database that facilitates fast, easy conflict checks.

A good matter management solution, specifically crafted for legal use, can help firms reduce the risk of human error in several ways. It should do things that a general office system will likely not, such as using a court rules database in its electronic calendaring system to assist a firm with scheduling and meeting mandated deadlines. Since attorneys are ultimately responsible for the accuracy of their calendars, setting up a dual-entry system is a best practice, and a legal-specific software system can help safeguard their compliance.

Changing your approach to billing, accounting and matter management

When considering a new approach, and possible software solutions, there are many things to consider, and to someone who is not familiar with legal technology, it can be a bit overwhelming. It can be very worthwhile to get an expert opinion by working with a software consultant or legal technologist. There is not a single right answer or approach to technology that fits all firms. You need to find the system that works best for your unique needs – one that will bring your firm maximum efficiency and productivity to help you achieve your goals.

Some items to consider when planning your approach include:

• Your firm’s current processes for billing, accounting and matter management.

• How you would like your firm to operate, ideally, and if the software can facilitate that.

• What other software your firm uses, or will be using, and if a given system would integrate with it.

• All the individuals who will use the software, how they will use it, and for what purposes.

• How sophisticated, or simplistic of a system you prefer.

• If you have special requirements for trust accounts, and if the solution will accommodate them.

• If the pricing agrees with your firm’s budget and expectations.

• The software’s ability to be customized and to grow and change with your firm.

A few quick recommendations about legal software

Whatever solution you may be considering, here are a few suggestions to help you get the best results.

• Be sure to ask for a demo of the software, so you can get a better feel for how it works, and if it suits your firm’s needs. Ask any important questions.

• Have a disaster recovery plan for your data, consider worst-case scenarios and know the specifics about how your software manages backups and where information is stored.

• Prepare your firm for success with a new system by providing training materials and clear communication to attorneys and staff about how it should be used, right from the start.

Technology solutions designed specifically for law firms can make them more effective and efficient in a multitude of ways. By adopting tools and processes that fit their unique needs, firms can work smarter, faster and more accurately, leading to greater success and client satisfaction.