Advertorial: Managing a Practice for Success
In an increasingly competitive legal sector, law firm decision makers must now work harder than ever to ensure that each area of their practice is functioning in the most effective way. However, that responsibility does not come without challenges. Deborah Edwards, Director & Head of Training and Support Services at Insight Legal explores the role of modern legal practice managers and offers a best practice guide to managing a productive and profitable law firm.
What do you think are the main challenges in managing a firm today?
Juggling the many aspects of managing a law firm can undoubtedly be a challenge! The term Practice Management can cover areas as varied as financial management, human resources, facilities and equipment, IT, marketing and business development, client relationships and compliance. Every practice manager gets pulled in different directions and will find themselves taking on many and varied tasks. There will often be the temptation to take on these tasks yourself. This can be anything from fixing a printer to recruiting a new member of staff, or from designing a new company logo to drafting office procedures. You may look at the cost of having a third party or an outside agency to complete this work for you and then decide that, instead, you will do the work yourself. What it is easy to forget is that cost doesn’t always equate to value. I am certainly not saying that you have to spend a lot of money, but it can certainly sometimes be the case that spending money and saving yourself time can be more cost effective.
When it comes to managing your staff, you will undoubtedly ensure that they are offering the best possible service to the firm’s Clients, but you must also make sure that they are providing the same level of service to the firm itself. What I mean by this is that you need to make sure your staff are doing enough – but not too much – work; working efficiently and effectively rather than spending hours of chargeable time that cannot be recovered. You don’t want to stand over them as they work and you won’t have time to review every file every day, but you do need to understand just how much work has gone in to recovering your professional fees. This is where firms need to look at the case and practice management tools available to them.
Compliance rules and regulations are constantly changing and firms need to be abreast of these changes in order to survive, let alone thrive. The accounts department of any law firm is crucial to ensuring compliance in many areas but, of course, the partners and managers within the firm must do their own checks too. This is where firms must look to their accounting software and the compliance reporting available to them.
What tips and advice would you give to someone when it comes to leading a firm effectively?
The first thing to remember is that Law is not just a profession; it is also a business. When it comes to driving the business forward, it is important to remember that there are many ways to generate new work. Examples can include creating an attractive website and building an engaging and trustworthy brand to make your Client want to spread the name of your business through word of mouth. Other cost effective ways to drive growth for your firm can be to establish a presence with active social media platforms, and to plan relevant advertising and publishing of thought leadership pieces where potential new Clients will see you as an expert.
Responsibility for meeting compliance requirements and for operating effective systems and processes lies with those leading the firm. It can be difficult to balance the pressures of practice management with the responsibilities of Client work, but that is something that every successful law firm manager must do.
How can decision makers execute this without taking away from fee earning time?
The most successful practices are those that learn and adapt quickly. If you haven’t already, it is vital to ensure that your financial staff are fully trained and up to date with the relevant accounts rules, especially when changes are brought in. In 2019, the SRA accounts rules undergo their first major overhaul in years and there are significant changes that all legal cashiers and practice managers will need to be prepared for.
In addition to changes by the SRA, there are other regulatory changes to be aware of too, such as HMRC’s Making Tax Digital initiative taking effect on 1st April 2019. Every law firm needs to make sure that their legal accounting software is up to date, compliant and fit for purpose. Having specialist software to prepare your management accounts and compliance reports will save many valuable hours.
Developing firm-wide case management processes to guide staff through the running of their cases can also be invaluable in reducing supervision time. Of course, you need to remember that you and your legal staff are the experts and not a computer system, so you shouldn’t rely on a prescriptive workflow that leaves your staff simply ‘painting by numbers’ or ‘joining the dots’. However, systems that allow you to streamline your chosen working practices can ensure the delivery of high quality, tailored, efficient service.
Can you share any direct experiences of dealing with these issues and what you learned from this?
In my work, I speak to law firms everyday about case and practice management systems. I always ask the question, “Do you time record?”. Some will say yes with no hesitation, however most will either say, “We don’t, but know we should” or even “No, because most of our work is either agreed or fixed fees.”
In my experience, if you are a firm that doesn’t time record due to fixed or agreed fees or charging agreements, then you really have no accurate way of telling how the work you and your staff do compares to what you are charging and in turn what you recover. Analysis of your billing success (cost v charge out rate v recovery) is invaluable for any practice and if you have a good practice management system then it is very easy to achieve.
I also find that many firms dismiss the idea of case management because they use very little in the way of standard letters and correspondence. I wholeheartedly agree that the management of legal matters is not just a process to be followed, but what I would encourage every firm to do is to look at how you want your matters to be run and to use the available software tools to optimise your efficiencies.
There are many resources, services and software tools available to practice managers. They offer varying levels of automation and assistance, with different offerings being suitable for different law firms of course. Use them to your advantage.