Law Firm Profitability and Solutions for Better Service Delivery in 2021

By PracticeLeague
March, 2021

With the year 2021 poised for a fresh outlook, the time is ripe for lawyers to recognize the role of successful technology innovation to drive client experiences and derive better billable rates.

The innovation process may involve upending the existing practices, reinventing the business model entirely. Drawing parallel from this, it can also include adopting the best professional practices as standard operating tools. Even the most reluctant lawyers have been forced to innovate and create a legal delivery system by letting technology augment what humans do during the recent past. Undoubtedly, the events triggered by Covid19 have been the tipping point to reflect on operations and overhaul the existing processes.

For any mid-sized or large law firm, technology-led transformation aims to achieve the three-fold objective:

  • To derive a better realization rate
  • Ensure streamlined legal service delivery system
  • Take timely action and mitigation of unnecessary risks

Transition Into a Client-Centric Organization

Connecting data and resources with technology integration can reshape business operations and move into a client-centric service delivery model. Collaborating using the right technology is vital if law firms have to push themselves towards a profitable model. Tech platforms for contract management, document docketing, keeping track of the workflow processes, managing matters, and litigation are core functions that technology can take to serve clients better and efficiently.

Introducing robolawyers or chatbots for responsiveness can ease the congestion in medium-size and large law firms. As the first port of call, chatbots can enable team and resource allocation. It can help teams ask for client feedback for future work processes.

Avoid the Non-Billable Tasks.

Law firms often compromise on some of the compelling legal-related work with too much time spent on non-billable work or operational and administrative tasks. For instance, they may lose a big-ticket entry when asked to do simple legal research only because some administrative work is to be attended to or a billing issue to be resolved. In such a scenario, it makes sense for law firms to use appropriate tech tools to free up the core team to do billable ones that can generate bills for quality work.

Besides the fact that the non-billable work is not usually profitable, it also consumes bandwidth and resources that are generally not even accounted for. The low realization rates for these tasks can dent the overall profitability-both, from a short term and long-term perspective.

Prioritize on Tasks, Delegate the Rest

Lawyers often have to find ways to boost their efficiency and make the best use of time. Engaging outside lawyers and freelance law professionals is one way to go about it. Delegating the non-priority tasks to these freelance lawyers or letting technology do its work can ensure no opportunities are lost. Since there are no overhead costs attached and law firms can engage freelance lawyers on a per-project basis, this strategy can prove to be a game-changer, especially to small and medium-sized law firms.

When it comes to drafting contracts and managing documents, technology offers the best possible solution. Cloud technology provides a faster, more straightforward, and cost-effective solution to store, retrieve, and access records from a single-touch repository. It can free up most of the lawyers' time, enable efficient collaboration and let lawyers take up more significant opportunities

Command Higher Rates for Specialized Work

While lawyers engaged in general law and practice make decent profits, adding a specialization or two in a particular area can let lawyers command higher rates. Having the right and complete know-how of the matter is as essential here before charging for specialization and letting clients pay 'that extra dime'.

Having Control Over Spends and Workflow Processes

The introduction of eBilling software can quickly take over the central billing spreadsheet's role and manual processes involved in the accounting process. Typically, law firm back-office expenditures include spending on knowledge and library, human resources, communications, administrative and operational costs, and IT spends to improve law firm systems. The net realization rates would then depend on the overall profits and cash-flows after all expenses are paid.

Audit Trail and Compliance

With multiple users accessing data, keeping track of every record can be challenging for any medium-sized/large law firm. An audit trail records every action, event, or activity the platform user carries out with the data including, download, creation, modification, and deletion of documents on the LPM. The automated audit logs are crucial for every organization since they can track complex actions to superficial changes.

As a compliance mechanism and to check instances of internal fraud or data breach, sensitive data can be protected with an audit-trail embedded in the LPM.

Implementing technology has to be done with a word of caution. Mindful technology and right technology. Whether it is to raise bills accurately or to ensure a seamless workflow process, Law Firm Management software has been instrumental in transforming some of the renowned law firms' core functions.

RazorLex offers a host of technology solutions for law firms for efficient collaboration and smoother workflow processes. Whether it is about maintaining counsel-client relations, tracking litigation-related matters, or control over transactional matters and documents, an efficient solution is now at the fingertips for a lawyer

Share Post :