Running a law firm, even more than most businesses, requires keeping track of a lot of information. You've got appointments with clients, appointments with courts, and assorted deadlines and milestones. You have to keep track of how many billable hours you and your colleagues spend on each matter, and you need to make sure to actually bill for those hours and track payments. The whole time, you're also juggling emails and other communications with clients and each other, and that's just scratching the surface. It's no wonder that most firms use some kind of software to help them manage it all.
But often firms wind up dividing management tasks among several different general-purpose programs. Yours might use Microsoft Outlook for email and calendaring, Excel to track deadlines, and Intuit's QuickBooks for accounting. And though these programs all do a fine job on their own, the problem is that they are on their own. Michelle Lyons, owner of EsqWired Computer Consulting in Los Angeles, says, "A lot of attorneys are entering data into two, three, even four different programs."
Even within each program, sometimes extra effort is required. You can set up a mailbox for each client in Outlook, for example, but you'll have to remember to put a copy of your sent mail in each mailbox manually-and what if you want to sort messages by case instead of client?
These are the kinds of reasons you might want to turn these tasks over
to practice-management software. The term generally refers to a package or suite of interlocking applications aimed specifically at the needs of law firms. As one user of such software put it, "The important thing at my company is the practice of law, so the focus has to be on that, not on the technology."
Of course, running a successful law firm entails a lot more than day-to-day management. You can also get software to help with client development, research, document management, and business analysis. But for this article, practice management will be narrowly defined to include the more routine tasks, which can be divided into components for the front office and back office. Some vendors sell packages that handle both ends, while others specialize in just one-or even part of one. (For a partial list, see "Practice-Management Software Vendors," page 37.)
From End to End
The front-office portion of management software deals with time tracking, calendaring, communications, and case management. In some ways, the most important of these aspects-or at least the one that can most automate procedures for a law firm-is calendaring. One vendor cites studies showing that missed deadlines are the leading cause of malpractice claims in California. That means keeping track of what has to be done when is among a firm's most critical management tasks.
The main benefit of calendaring software is that it "knows" the dates associated with a given procedure. In California, for example, a trial can have as many as 80 deadlines associated with it. Keeping track of those on your own (in Outlook, for instance) raises huge opportunities for human error, especially when dates are changed and the changes ripple through the schedule. Calendaring software works with optional rules packages for each jurisdiction, so when you schedule a court date, it will automatically fill in all the associated dates, taking into account holidays and court schedules. "If you calendar Smith v. Jones for trial in three months," says Steve Dollar, managing partner of the San Jose office of Ericksen, Arbuthnot, Kilduff, Day & Lindstrom, "it will automatically give you all the upcoming deadlines. We use our package to calendar all of our physical appearances."
When vendors talk about the back-office component, they're referring to software that addresses the financial aspects of running a firm: billing, accounting, and cost recovery. Most businesses have some kind of accounting package, but again, there's an advantage to having one that's designed for the needs of a law firm. For example, with a complete package, information entered into the front-office component, such as time spent with a client, automatically tallies into the accounting and billing package, once again eliminating the need for reentry and at least one opportunity for error.
Some practice-management software packages come as a complete system, while others focus on working with the software you already use. So, for instance, a small firm might continue using Outlook for its email but let the management package capture messages and sort them by matter, attorney, client, or whatever. Andrew Kohn, CEO of Pettit Kohn Ingrassia & Lutz, describes his firm's package this way: "It's not software that helps you create a document. It helps you link contacts from Outlook, documents from Microsoft Word, and events in its own calendar to a particular matter."
Those firms in the 40- to 50-lawyer range are more likely to look for packages that handle everything, vendors say. With these packages, email can be generated from within the management software itself, as the calendaring module feeds into each attorney's to-do list, and so on.
The biggest firms, ironically, often focus on integrating the software they already own, because of the sizable investments they've made. But no package does everything perfectly, and very large firms want the "best of breed" software in each area: the best accounting package, the best document-management program. In these cases, the vendor might provide some components but will also provide integration services to tie all the separate packages together.
Making the Move
So, when is it time to get a practice-management system? When the human effort required to manage information with the software you have starts to have costs: When you or your clerical staff are spending excessive time transferring data between applications that are basically working in parallel, rather than together, it's time to look for something else. As consultant Lyons suggests, "Ask yourself, 'What can I get that will allow me to enter data once? Or what program will save me having to hire another person?' "
As your firm grows, you'll eventually want a financial tool that integrates time-and-matter data. That's when you'll want to start looking for products that specifically address law firm needs.
To begin the buying process, Lyons advises first asking your friends and colleagues what products they use. Ask them how easy they were to set up and learn. Then ask yourself how much you're willing to spend-that'll narrow down the field.
The cost of a system can vary widely, depending on how many people will be using it (the number of licenses you need) and what modules you decide to purchase. But plan on spending a bare minimum of several hundred dollars per person; more-complete systems can run several times that amount.
Then plan to roll out the system gradually. Lyons recommends allowing up to three months to get used to the system and enter all your data into it. She acknowledges that the data entry can be a lot of work up front, but insists that the more time you spend entering data at the start, the less time you'll spend looking for things later.
The results are worth it. Lyons tells of one client who "was upset for months because of all the initial work. But she recently told me she now had three times the number of clients and was recovering three times the money." Having all the data in the system enabled her to present insurance companies with complete, bulletproof packages of information, which led to larger settlements.
More clients and more money-now that's how you manage a law practice.
Jake Widman is a San Francisco-based freelance writer.