A Complete Guide to Law Firm Management
If you want to build a successful law firm, you need to manage it effectively. The legal industry is changing rapidly, and law firm management is also changing. With improvements in communication and technological advancements making processes more streamlined, successful law office management is now easier than ever! On this page, you will learn how to manage a law firm, habits that can help you succeed, and other resources to help take your legal company to the next level.
Skills Needed for Effective Law Firm Management
Knowing how to manage a law firm is only one part of the picture. Law firm management is a daunting task and one that is definitely not for the faint of heart. So before getting into the different tips and tricks for building a successful business, make sure you have what it takes. Here are all the must-have skills for all law firm leaders that want to succeed in the legal industry:
- Communication skills;
- Organization and delegation skills;
- Forward planning;
- Problem-solving and decision-making;
- Team spiritedness and motivation;
- Integrity and honesty.
What Drives Effective Law Firm Management?
There is no single thing that drives effective law firm management. However, if we had to choose one, it would be synergy. Synergy is the idea that all team members can produce greater things together. By leaning on the strengths and weaknesses of every member within the law firm, the team can achieve more than it would otherwise. Successful management is about finding these strengths and weaknesses and using them to your advantage.
It is also about ensuring every team member knows their role and has access to the training and resources necessary to take their career to the next level. It is about growing together. With this growth will come a thriving business with many clients and good revenue.
What Is the Basic Organizational Structure of a Typical Law Firm?
For effective law firm management, there needs to be a clear structure within the business. This hierarchy ensures all employees and company owners know who their manager is and who sits below them. The basic organization of a law firm is fairly consistent across the legal industry. From top to bottom, here is a look at the leading positions and what each role entails.
The managing partners are the law firm leaders who run all business operations. This includes the day-to-day operation of the firm with a focus on the company finances. They all need to track the productivity and performance of the entire team and make changes to improve these statistics. This individual usually owns all or part of the firm.
Partners or shareholders
Partners (also known as shareholders) sit below the managing partners within a legal firm. More often than not, they also own shares in the company. They tend to be the most experienced lawyers and attorneys in the team and have worked their way up. On top of their salary, law firm partners will earn a share of the company’s overall profits.
Associates are lawyers and attorneys employed by the law firm, but they do not own any shares within the company. Entry-level associates often won’t have much time face-to-face with clients and will gradually gain more privileges and responsibilities the longer they are with the firm. An associate’s work is often reviewed by partners and shareholders.
Rather than working on legal cases, the role of a marketing director is within business development. They focus on bringing new clients in and will help create branding and a positive media image of the business. They will also work with PR companies and track how and when new customers find the branch. Their main purpose is to facilitate company growth.
Contract attorneys are lawyers that are not employed directly by the firm. Instead, the legal firm might outsource work to them during busy periods. They are paid on an hourly basis and when needed, rather than on a fixed-fee basis for entire projects. Nevertheless, most do tend to work on a case from beginning to end.
Paralegals support attorneys with their cases and have a great practical knowledge of the law. Their role is more admin-based and could include preparing legal documents, researching the cases, and providing quotes to clients. They’ll often help lawyers draft reports and prepare for trials. However, they can also interview witnesses and go into court themselves in some cases.
Law clerks are lower down the hierarchy still and are often law students or people looking to gain experience within the industry. Like paralegals, the main role of a law clerk is to help legal associates with their cases and take the pressure off. They’ll often be given time-consuming work that the associates don’t have time for.
Legal secretaries have an admin and organizational role in the law firm. It is their duty to keep the office organized, and they’ll play a big part in filing documentation and keeping track of the wealth of clients and cases. They can also assist attorneys and paralegals with any administrative tasks they need assistance with.
The 9 Habits of Highly Effective Law Firm Management
There is no single best way to manage a law firm. Managing a small law firm is drastically different from managing a larger one. Besides, what makes one business successful might not work for another. Law office management is all about finding the right solution for you and your firm.
With that being said, there are some consistent habits you should try and adopt.
1. Find a focus
For your law firm to be successful, it needs to have a focus. In the legal industry, it is much better to be a master of a specific practice area than it is to be a jack of all trades. Clients will typically pay more for companies that work in one area. When establishing your own law firm, find this one focus and communicate it to your staff and clients.
2. Provide clear leadership
We have detailed the usual law firm structure in the section above. As the leader of the firm, it is important that these roles are clearly defined and communicated to all staff, so they know exactly where they fit into the business. You also have to motivate your employees and provide clear leadership regarding the company’s direction and values. Having this shared goal that all employees at all levels of the business are working towards is a must.
3. Establish SOPs
All successful law firms will have many standing operating procedures (SOPs). Standard operating procedures are crucial, as it ensures all members of the team are completing tasks the same way. These detail the exact steps and processes used to carry out specific tasks. For example, you might have an SOP for onboarding new clients and another for scheduling appointments following the client intake process. In fact, every process should have a standard operating procedure, including:
- Tracking time spent working on cases
- How to prepare invoices and request payments
- Processes for trial preparation
- Reviewing and approving documents
- Storage of documents
- Archiving legal files at the end of the case
4. Use document automation tools
With the world’s current climate crisis, going paperless has many environmental advantages. However, using digital documents can also play a crucial part in effective law office management. You can use document automation tools to send letters and paperwork to clients on demand. Try to digitize as much paperwork as you can and have a set system for it to be stored in.
5. Rely on technology
Alongside document automation, other technological advancements can also help with successful law firm management. Relying on tech can cut the time taken to carry out certain tasks and give additional information to help facilitate business growth.
Indeed, technology is a trend among many successful businesses and can be used during processes such as:
- Having virtual meetings with clients;
- Filing and storing documents electronically;
- Billing clients that are on an hourly model;
- Generating current court forms;
- Generating referrals.
6. Keep hold of your finances
Keeping track of your finances is important for all businesses. Law firms, in particular, will benefit from vigilant accounting and law firm finance. With so many different clients and cases to keep track of, knowing what money is going in and out is crucial. Without having a firm grasp on what is happening with the business financially, managing it and making any financial decisions becomes very difficult.
7. Measure goals and targets
One part of managing a law firm has a central goal that all employees and partners can work towards. This might be to increase company revenue, bring on more clients, or grow the number of attorneys in your firm. However, this goal is useless unless progress is tracked. Measuring these targets lets, you know how your company is performing and where adjustments need to be made.
8. Spend money on marketing
Managing a law firms requires a lot of work inside the business, but don’t neglect the opinions of others outside the firm. This is where marketing comes in. You need to build a positive brand for your business, something that is crucial for drawing in new clients. You want to get across the incredible client experience and what legal services your company is offering in all your marketing efforts. Boost the profile of your company, and your revenue should boost as well.
9. Professional development
Part of being a good law firm leader is investing in professional development for all staff members. This could be sending employees on company-funded courses to expand their knowledge and experience or sending employees to legal conferences. However, something as simple as regular 1:1 meetings between senior associates can help develop their careers.
What Software Do Law Firms Use?
We’ve mentioned legal practice management software and other uses of legal technology a few times on this page. Most successful law firms use software to streamline all different types of processes.
Contracts are important written or oral agreements that your company has with third parties such as customers, employees, partners, or...
Here are just a few you might be interested in:
· RingCentral: A cloud-based communication solution that allows you to partake in team messaging, video conference calls, and phone calls in one application.
· NetDocuments: This is a document-sharing software that makes sharing documents between two teams that are collaborating as straightforward as possible.
· Time Miner: This software is great for every member of the staff to keep track of their billable hours and does so automatically from messages and calls from RingCentral.
· Timecamp: Timecamp is another time-management application, this time for law firm leaders. You can keep track of all your employees’ hours and build productivity reports.
· QuickBooks: Award-winning accounting software that is great for keeping control of all your law firm’s finances, specifically tailored towards small law firms.
· Clio Manage: Keep all your clients and cases neatly organized with Clio Manage, a company working directly with the Law Society. You can also use the software to record time and bill clients.
Automating Law Firm Management
All of the above legal practice management software examples can be used to automate processes. This is an innovative way to take some of the pressure and challenges out of law office management. By letting technology take control of certain tasks, you and all staff members have more time to spend working on other areas. Besides, there is less room for mistakes and human error.
However, creating automatic systems takes some time and trial and error. Here are the things you should be thinking of when creating an automatic procedure.
Strategy & value
Before you automate any process within your law firm, you need to decide precisely what you want the system to do. In other words, what is the purpose of the task? You then will need to determine the value of the task. Is this usually something that can be completed alone, or does it require an entire team? How valuable is this task to your client? The answer to these questions will help you to develop a system that works.
You then need to consider the best way to complete this task. What parts are the most time-consuming and could be automated? Are there any ways to bypass steps without compromising on the final result? It can be very helpful to get together with other senior lawyers or partners to brainstorm and work through this together. If you don’t have SOPs in place, it could be that all members of your team have wildly different steps and thoughts on the matter.
Trial and error
Once you have decided on a final process, this should be trialed by a few members of the team. Take note of whether automating the process has indeed saved time and boosted productivity. If it has, you can roll out the new system at large. If not, head back to the previous step and find new solutions based on your current findings.
Even if the systems seem to work perfectly, you should always take time to revisit solutions a few months or years down the line. Technology is constantly evolving, and there might be more valuable processes you can put into play.
Law Firm Management Books and Courses
If you want further information on how to manage a law firm effectively, here is a list of books, courses, and other resources you might find helpful:
- The E-Myth Attorney: Why Most Legal Practices Don’t Work and What to Do About It, by Michael Gerber
- How to Start & Build a Law Practice, by Jay Foonberg
- Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos, by Heidi Gardner
- The Client-Centered Law Firm: How to Succeed in an Experience-Driven World, by Jack Newton
- Leadership in Law Firms course by Harvard Law School
- The Lawyerist Podcast by Aaron Street
- Legal Toolkit podcast by Jared D. Correia
Law firm management is a complex task that is made up of multiple aspects. However, it doesn’t need to be daunting. With current technological innovations, automating processes and relying on legal software can take some of the weight off your shoulders. Remember that every law practice and client base is different. When managing your own law firm, you need to find a solution that works for you. Nail it, and your law firm will be set up for success.
An interesting & very useful legal newsletter