A recent survey of the performance of the legal practice in the United States in the year 2020 revealed that there are three main challenges law firms face today:
- Lawyers and the legal profession resisting change
- Difficulty in equipping staff with the latest technological knowledge
- Implementing new efficient and agile remote work systems
These three issues have been brought to the surface by the COVID-19 pandemic that completely upset how people work and interact. The legal industry is known to be very conservative, especially when it comes to adapting traditions to change. These three factors emerged as the greatest challenges to a typical legal business’ model and the economic conditions that have changed client expectations and demands.
For a legal practice to remain competitive and profitable, it must future-proof all its operations and approach to business. Growth or expansion is inevitable for law firms that can radically transform in a disruptive market.
Here are five areas in which a forward-looking legal firm can focus on improving in order to streamline its operations and improve profitability.
Poor Client-Focus Systems
Today, every client expects their law firm to be efficient and deliver high-value and timely legal services regardless of the circumstances. People are very impatient and can become emotional quite fast, especially when dealing with pressing legal matters.
In an age where public ratings and reviews matter, legal firms must work harder to get client approval. One of the most effective ways is using client portals that improve communication between the firm and the clients.
A legal firm can score higher client satisfaction rates and increase its profitability by improving its communication platforms. Clients and staff expect top legal professions to have secure 24/7 open communication to get updates without resorting to phone calls and reference numbers or emails and passwords.
Luckily, many technology companies are developing tailor-made client-focused portals for legal firms. The right employee-client portal may incorporate such tools as timesheets, group announcements, or case tracking. It should not only bring all organization communication in one platform, but it should also enable real-time cloud access.
Lawyers’ Resistance to Change
Every lawyer would agree that there is a need to embrace modern innovation as it transforms the legal profession. However, the process of digital transformation is often very slow, more so in the services-focused sector. A 2018 survey by the Aderant Business of Law and Legal Technology revealed that about one in every three legal firms in the United States have consulted a technology company or hired someone to upgrade their technology.
A third is still a very small number. Small firms, in particular, have been slow to embrace disruptive technologies that, while they may be costly to install and train staff to use, will ultimately improve the firm’s efficiency. The report also pointed out that experienced and niched lawyers are less motivated to invest in learning to operate with the new technologies interrupting how legal services are delivered.
The best starting point for legal firms and law practices seeking to digitize their operations is choosing an off-the-shelf legal service platform developed by a third-party service provider such as LawBillity.
Investing Too Much in Administration
As a legal firm grows and takes on more clients, its operations become more complex and demanding. Many traditional firms naturally expand their resources to accommodate the growth of the practice. Law firms with a handful of clients may be able to manage all their paperwork the old way. A single computer in the office may be all the firm needs to run.
However, as it grows, the firm will eventually find it challenging to handle all the administrative tasks such as document filing, billing clients and time tracking. It becomes a challenge to manually keep timesheets on spreadsheets, calculate overtimes, generate client invoices, and chase payments.
A simple tool such as LawBillity is designed to handle all the hard work. The handy tool will track travel and court times, calculate worksheets, send out invoices, track expenses, and generate reports. This will free the lawyers in a firm to focus on what they are good at – practising the law.
The LawBillity app is particularly useful for legal firms struggling to keep all their finances in one place. The app will go a long way to improve utilization, streamline income and tax calculations, and generate comprehensive reports.
Failing to Future-Proof Their Business Plan
The COVID-19 pandemic and the resulting social distancing rules and lockdowns were a clear indication that person-to-person interaction will never be the same. No one could have foreseen this. Organizations that offer mainly in-person services, such as the legal services industry, have had to adapt fast to protect their operations and profitability. Most firms are yet to update their business models to accommodate the latest disruption in the way of life and business.
Looking into the future, legal firms will need to use new techniques to practise – whether they choose to grow by specializing or diversifying. The operations methods a firm adopts will depend on the risks it faces, and the opportunities presented to it. The key to identifying these factors is investing in the right technology and tools that facilitate a smooth operation of the firm.
The foundation of the IT framework on which a legal firm runs must be both adaptable and sustainable. If you run a legal firm, enhance its chances of growth and profitability by updating its future path now.
Cybersecurity and Data Protection
Law firms have become a prime target for cyberattacks because they handle a large amount of sensitive data. This is also why legal firms are held to higher standards as far as data protection is concerned. The heavy emphasis on data protection has made it obligatory for firms to meet GDPR compliance standards and invest heavily in data protection.
The cost of protecting personal client data and a law firm’s proprietary information can be quite high. The firm must invest in proactive data security that includes crisis management and business continuity systems. Reputed technology vendors have developed cloud-based practice management tools that a legal firm can subscribe to manage all the practice IT and data.
To maximize its profits and remain competitive, a forward-looking law firm must anticipate the needs of its clients and strive to exceed their expectations. The biggest challenges law firms face today can be resolved with specially developed software. Try LawBillity legal time and billing software today and discover how efficient running a law firm should be in 2021.