Law Firms Must Become More Business Focused

The legal industry is more and more under the pressures of economic and client demands. Every law firm is unique so cookie-cutter solutions don’t work in most cases.
The term most ofter heard is that the firm needs to "function more like a business."

This pressure will be addressed by one of two individuals. Either business people with other industry experience or those who’ve only worked in the legal field. Business people will focus on profitable, efficient operations where performance metrics guide the process. Those with legal experience will take a more traditional path that is somewhat restricted by past practices.

Those firms that take the metric approach will inevitably outperform those seeking to keep traditions in place that restrict the ability of the firm to maximize revenue. This is born out by the significant number of major legal firms that have ceased to exist in recent years. Change or perish is an applicable term for the legal industry.

This leaves firms to tread a narrow path between implementing changes to survive and preserving the unique aspects inherent in the practice of the law. Does a law firm move forward proactively or does it react to challenges?

If firms wait until outside influences demand that they change, the results may be less than optimal. The nature of reactive system changes done quickly is usually a level of unintended consequences with ever expanding complications.

Those firms that listen to those who have experience outside of the industry understand the benefits of working proactively to minimize the unintended consequences of changes we require or desire to implement.

So what’s next? How can a law firm better prepare for imminent changes, no matter what?

Every law firm needs to better understand every aspect of it operations. What is assumption and what is fact?

Management of any company can be accomplished a number of ways. Management either feels they know, don’t need to know or are not held accountable for what’s happening because it’s in another department. Getting a complete single view of the entire is almost impossible, especially if the goal is real time so that proactive management decisions can be made.

There are always excuses such as we’ve tried to do this before with surveys, interviews, focus groups and job requirements but it’s never worked. None of these is comprehensive enough to develop a complete view of the organization.

Another excuse is that department and other senior leaders completely understands everything about the organization. While they may think they know about everything happening in their department or area of focus, which is highly doubtful, it’s always been almost impossible for a manager to know what’s happening in other departments that may have an impact on the success of his efforts. Understanding the operations of the entire operation during the decision making process has been obtainable as witnessed by the time lag that it takes to get information about the overall operation of the company. That’s why quarterly reports aren’t available for weeks after the end of the quarter. Up til now, there has been no way to see a view of the overall single view of the organization in as close to real time as possible.

Yes, senior leaders and departmental managers, each focusing on their area of responsibility, have a general understanding of what activities individuals in their respective departments perform. However, systems are often not in place for this information to be gathered and compiled allowing it to be effectively referenced during their decision making processes. Additionally, where individual departments collect performance data, systems do not exist that correlate and compile the data with data from other departments providing management with a holistic view of the firm’s operation.

Examples:

We understand each attorney’s role by practicing with them and reviewing their time sheets.

The problem is that an attorney puts only about 75%- 85% of their time on a time sheet. They spend as much as 25% on non-chargeable tasks. How can better understanding this time contribute to a better bottom line? What are they doing that could be done by lower cost employees? Are the things they’re doing the best for the firm? Are there patterns where multiple attorneys are performing tasks that can be better completed by a single attorney or other employees? Should the firm hire a specialist who could complete these non-chargeable

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Our secretaries and support staff are utilized to the maximum for the success of the company.

Up till now there has not been a way to analyze the time utilization of all of the support staff in a firm. How many hours of support time is the firm expending on specific activities? Is there redundancy? How is each task managed and accounted for? Are the right pay grades performing the most appropriate tasks?

In today’s competitive legal environment, having an "adequate" understanding of the operations is a recipe for future events that may be unpleasant. It’s imperative that a modern firm have a deep and overall knowledge of exactly where the money is going and where it’s coming from.

A firm must first understand that it really doesn’t have an adequate way of viewing the operations in as close to real time as possible. Without this, it can’t make the very best decisions about the path necessary to achieve maximum success.

There is a way to begin to bring a firm to a level where the path to success is better understood and attainable. It’s called Business Intelligence and it’s not that difficult to implement when the decision has been made that the firm wants to survive.

We can help when you’re ready.

Inteneo Systems – Business Intelligence Expertise from Big Sky Country http://www.inteneosystems.com 406-531-8119