3 ways to improve your firm's margins
Operational excellence via technology
The right technology could help boost the productivity of your firm. There is a vast number of legal tech applications on the market that could free up your time and increase productivity as a result. In this part we describe what technology – everything from document and practice management systems to time tracking and business intelligence software – can do for your law firm.
Firstly, technology could help your lawyers transform their non-billable time into billable time. Tasks such as billing, client intake, data entry and business development take up a lot of valuable time. While these are necessary evils, they won’t elevate your firm to the next level. By automating some of these tasks, you will have more time on hand during the day. Not only that, but these technologies enable you to access all of your important data from anywhere and any device. In other words, it will allow you to do things you otherwise could not.
Now that you know what technology can do to help move your firm forward and stay ahead of the curve, you may be wondering what some of that software looks like. As well as document management systems and practice management systems there are a lots of other tools available. Some noteworthy options include time capture software (TIQ) and billing systems, practice management software and CRM systems.
Maybe your firm has already achieved operational excellence, but the overheads are dragging your margins down. There are a few areas you could look at to improve this. For example, you could set up a virtual office for some – or even all – employees. This will reduce or eliminate the costs of that expensive downtown office. On top of that, you could cut down on supplies and services you hardly ever or never use.
When reviewing your profit and loss statement, don’t just cut costs. Think tactically about cost reduction and prioritize and develop specific strategies. Here are some things to take in account: headcount, compensation, benefits, in-house vs. outsourced costs, rent and space size vs. virtual office, telephone bills, marketing costs vs. return on investment, supplies and purchases.
Reducing wasteful spending ultimately results in increased profit. It all boils down to making careful decisions and implementing strategies to cut careless spending, which leads the way to increasing your bottom line.
Defining and prioritzing specific tasks, and the frequency with which they need to be carried out, makes it easier to allocate human resources. Delineating your internal processes allows you to determine job duties and outline appropriate expectations and benchmarks for performance. Having documented procedures makes training much easier and gets new employees fully integrated and functional in a shorter time frame – getting you a quicker ROI on each new hire. Documented policies and procedures also result in consistent performance of tasks across all employees, which increases overall efficiency.
Whether your firm decides to invest in their people or technology, or cut down on expenses, large strides can be made to improve your firm’s margins in these areas. There are both short and long term advantages for your firm, and we hope this article gives you a push in the right direction.