How to increase the productivity of your law firm

The productivity of law firms is a common problem.

Raise your hands if you have ever had a similar day at your law office:

You work on an urgent brief when a senior partner enters your office. Hey, how’s the brief going? Stop, smile, and explain. Your body language says Let me get back on with my work.

The phone rings five minutes later. Your assistant is on the line. “Hey, are you ready to have me format that brief?” Aww. You tell them you will email the document as soon as it is ready.

Your cell phone buzzes as you continue to type. You receive a message from another colleague. “Hey, dude. You’re almost done with your ?” brief.

There’s still more! As you’re about to finish your brilliant argument, an IM appears on your screen. Your department head reminds you of a marketing luncheon for law firms in five minutes. She hopes that you will be there. You reluctantly attend the meeting and find out it is 60% personal chatter and 40% lawyers who don’t understand marketing.

You realize later that you forgot the billing stop during lunch and have to correct your time record. Over half of your day has passed, and everyone has told you they need a completed brief. Yet no one has given you the time to complete it.

You’re not the only one. There are ways to improve the efficiency of your law firm (and, therefore, increase its profitability).

Let’s get started.

What is the state of law firms in today’s world?

A Wells Fargo’s Legal Specialty Group report states that U.S. firms are struggling to keep their attorneys busy because of a decline in demand. Wells Fargo’s survey revealed that the need for law firms has declined by 1,9%, and those with the highest grossing firms have seen a drop of 2.9%. The survey included over 140 law offices, including 68 of the 100 largest U.S. firms.

The decrease in demand is because law firms retained most of the lawyers hired in early 2021 or 2022 to deal with the surge in mergers & acquisitions work. According to the report, the number of lawyers will increase by 4.5% in 2022. The M&A market, however, cooled down in 2022. It dropped by 37% from the $5.9 trillion global announced deal work in 2021.

In 2022, lawyers logged less billable time than the year before. Each lawyer averaged 1,568 hours of billable time, 102 hours fewer than 2021. Owen Burman is a senior consultant with Wells Fargo. Given the slowdown, he was surprised at the low number of layoffs in the industry.

Productivity in law firms is now more critical than ever

In this uncertain environment, it is more important than ever for law firms to focus on productivity and maintain a tight ship.

This evaluation should be focused on the timely delivery and cost-effectiveness of services, as well as identifying areas for improvement. In order to achieve better results for both parties, two areas are particularly important: partnership (including pricing and scoping) and legal technologies.

For optimal partnerships, it is crucial to have both the firm and the client give constructive feedback. The effectiveness of partnerships can be improved by identifying areas that need improvement. Pricing, scope, and project management are the three areas that need to be optimized.

To achieve cost certainty, law departments are increasingly looking for more innovation in pricing by law firms. Scope improvements can also optimize client experience and cost certainty. The importance of project management, both internally and externally, is crucial for increasing efficiency. An increase in the demand for legal project managers can help bridge the productivity gap between current aspirations and actual delivery.

Legal technology is a key component of optimizing law offices. More than half of departments are actively using legal technologies, including eFiling and legal research systems, as well as contract and document management software. The impact of investing in roles for legal project managers or empowering current roles can be positive on pricing, scope, and project management. Legal project management technology is underutilized and presents an opportunity for departments in this area.

Let’s start with some practical steps you can take to increase productivity in your firm.

Use project collaboration software

Remember when we started this article by describing a common working frustration?

In this day and time, it is impossible to see why any person who has asked you a question about your brief would need to interrupt in order to get the answers they want. You can use a project collaboration program to allow all of these people to view your progress without interrupting your flow.

Team members can track the progress of a project using platforms like ActiveCollab. Slack. Trello. It’s not necessary to pop in or call.

The Legal Technology Survey report of the American Bar Association found that lawyers who use practice management software or document automation tools have more billable hours and are more efficient than those who rely solely on manual processes.

By keeping your team informed at all times about your progress, you can avoid wasting time worrying about where you are or when you will be done.

Project management systems are also a great way to stay organized and do your work more efficiently. You can pick up right where you left off, and you will all know what to do next if you are working with others on the same project.

These tools are only effective if they are used regularly by everyone in the company. It may be difficult to transition, but the effort is worth it once you have everyone on the same page.

Know your firm’s productivity metrics

Many law firms are doing amazing things. But there is one thing they do wrong: They don’t run their firm like a real business.

Firms spend a lot of time wondering about what they are doing wrong or how to improve but do not measure their performance. If you don’t keep track of your efficiency and profitability, how can you know if you are being effective or profitable?

In the same way your doctor monitors and improves the health of your body by monitoring vital signs such as blood pressure and cholesterol, businesses can maintain and increase their profitability.

It may seem difficult to create a list of data that can be tracked in a law office. Do not worry. Others have already thought about it. There are many key performance indicators that law firms use to measure their efficiency.

Moreover, you can use KPIs to make important business decisions in your firm, such as whether to hire a lawyer or improve client service or how to increase efficiency for certain daily tasks.

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