Ways to Improve a Legal Practice’s Bottom Line
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Fourth in a series on How Small Law Firms Can Perform Better
With pressure on small firms all around — from the glut of attorneys to Internet startups helping the do-it-yourself movement to larger law firms being more willing to discount fees — a small firm that seeks to remain competitive needs to be proactive about doing so. In addition to forming a strong firm at the outset and recruiting, incentivizing, and compensating lawyers and staff appropriately, managing partners at small law firms might also be open to innovations in cost-cuttingand getting new clients.
Consider signing on with an online legal services platform like Rocket Lawyer. Even as its mission is to “make law easy, simple, and affordable for everyone,” lawyers as well as direct consumers may make good use of its services, observes Alon Rotem, general counsel at Rocket Lawyer in San Francisco. Lawyers can sign up to be an on-call attorney in Rocket Lawyer’s network, where they can have access to its platform, connect with prospective clients, and also publish legal articles, Rotem explains. When a customer asks to be connected to an attorney, a member of Rocket Lawyer’s on-call network whose practice area and geographic location mesh with the customer’s needs will be eligible to connect with that customer. “There is no charge for lawyers who join Rocket Lawyer on call,” Rotem says.
Joining the Rocket Lawyer network of on-call attorneys is a “great way for younger lawyers or those looking to expand practice areas or clientele to plug in and get access to new potential clients,” Rotem notes.
Moreover, lawyers in the on-call network gain access to Rocket Lawyer’s online content and can “use those forms the same way customers can, and can customize them even further because they are attorneys,” Rotem says. There is also an e-sign solution where documents can be distributed electronically for signatures.
Rocket Lawyer’s vast database of forms may be less expensive than alternative databases a small firm might be using currently. “Even if all they want is the forms, it’s $40 a month to have a full-member subscription to Rocket Lawyer,” Rotem says.
Small firms can reduce the costs of hiring new lawyers and staff by keeping those they already have on board satisfied. “Working to retain attorneys and support staff as long as possible to reduce the costs of recruiting and training is the first step – and the biggest one – to take, as well as being judicious about updating of office equipment, software, etc.,” suggests Wendy Sartory Link, managing partner of Ackerman, Link & Sartory, in West Palm Beach, Fla. “The latest new toy is not always the very best for your firm’s needs,” she notes.
A familiar refrain about keeping cash flowing into the any law firm is to get those bills out on time. “Lawyers are great at providing services but terrible at billing and collecting money,” says Dawn Reshen-Doty, president of Benay Enterprises, Inc.
, which has offices in Danbury, Conn. and Portland, Maine. “We urge our clients to get out all of their monthly billing on the first of every month and then follow-up on outstanding accounts receivable on the 15th of each month,” she observes. “Getting into a routine or schedule makes this process go smoother and reminds the attorneys that cash flow is everything. If you don’t bill, you won’t get paid – it’s as simple as that,” says Reshen-Doty. Firms might consider penalizing lawyers for bills that are sent late and rewarding staff for helping to get them out on time.
Outsource what will save money or ease your way. “Lawyers know the value of their time. If they look at the amount of time it takes them to do the functions that Benay can provide, such as accounts payable, accounts receivable, human resources, invoicing, financial statements, etc., then add in the costs of taxes and benefits that they would pay an in-house provider, they will almost always save money by hiring us and gain a greater level of expertise and insight than if they attempted to do it themselves,” Reshen-Doty says.
She explains how her business works. “We charge a monthly flat fee. We meet with our clients on a monthly basis, either in person or via Skype or other conferencing services, to review their financials and discuss overall strategies and concerns. Each of our clients is provided with a dedicated bookkeeper and contact with whom they communicate daily and to whom they provide the financial information that Benay works with to create the invoices, accounts payable, and financial reporting,” Reshen-Doty says. Indeed, why not choose options that are going to save time, save money, and reduce headaches?
This post is the fourth in a series on How Small Law Firms Can Perform Better. The other posts in the series are:
- Mistakes that Small Law Firms Make
- Why Choose a Small Law Firm
- Compensate and Incentivize Lawyers and Staff
- Develop Long-Range Plans that Include Talent
By: Lori Tripoli
