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Considering lawyers never stop juggling multiple cases and clients, it’s no surprise that mundane tasks such as financial reporting can fall through the cracks.
But firms should never forget the fact that they are businesses that need to make a profit.
“One common issue that law firms have, in my experience, is that they ignore their finances,” says Joyce Brafford, director of partner relations at ProfitSolv. “That’s the first thing you should be looking at when you are operating a law firm.”
Using the right technology makes it easier, and in a recent episode of the Non-Eventcast podcast, Brafford offered several tips for how to wrangle your finances and expand your business.
First, Identify What You *Really* Need
Before buying anything, take the time to analyze your needs and make sure the product actually utilizes those features.
For instance, some tools are only built for hourly billing, so they won’t work for firms that also use different types of payment protocols such as evergreen retainers and flat fees.
Also look at how the software handles reporting.
It should be easy to generate and customize reports, and those reports should be displayed in a dashboard with all the information at a glance.
Adaptability is key, as it allows you to continually fine-tune your reporting as you assess your business needs.
“You don’t have to necessarily have the idea of what your custom reports are going to be when you start using a software,” says Jared Correia, host of the Non-Eventcast.
“That’s OK, because the software you buy should be flexible enough that you can generate custom reports.”
Then, Actually Run Your Reports
A surprising number of firms don’t use the tools that they already have, either because of time constraints or because the software is too complicated.
With programs like CosmoLex, detailed reports are accessible at the click of a button and simple to implement, even for lawyers who are used to older technology.
Going much further than profit and loss statements, the reports make onerous tasks like three-way reconciliation much easier.
You can see quickly if there are any discrepancies between your internal trust account, your clients’ trust accounts, and your trust bank statements — and where the discrepancies lie.
“For most law firms, if you are either that novice or that middle ground of experience, there are so many reports that are just right there,” Brafford notes.
“Even if you’re not a financial expert, you can understand what’s going on because they’re designed in layman’s terms.”
Consider the Unified System
Any lawyers still using basic accounting software should be wary of adding a separate program for case management.
Using two systems requires synching them together, which doesn’t always happen smoothly.
Switching to one program that handles intake, scheduling, billing, e-signatures, online payments, and accounting puts everything into the same database.
It shows who your clients are, what and how they paid, and many more details.
Was a payment applied to a trust? Was it to operating costs? How much is in their individual trust account? How much is taxable revenue? What have you paid in taxes?
“All of that lives in one place,” notes Brafford. “It is wild how much time it takes a lot of folks to do this otherwise — that you have to spend hours and hours every month reconciling multiple programs.”
Take Control of Your Web Presence …
Amid all of the education about the potential of legal tech, one area has fallen through the cracks: the components of an effective website (and what exactly lawyers should be paying for).
This knowledge shortfall leaves law firms open to marketing companies that “descend like vultures,” promising the world while building a firm a website, according to Brafford.
“It is so important for us to look at websites as part of the core technology that lawyers need, and take it back from very predatory solutions that have cost our industry, our colleagues, a lot of money, and just a lot of heartache,” she says.
Practice management solutions are increasingly including websites in their built-in features, which Brafford sees as a welcome change.
… And Take Advantage of Generative AI
Once your site is ready, writing regularly scheduled blog posts with keywords helps with SEO, or search-engine optimization, so your site comes up to potential clients on Google.
To come up with ideas of what to write, head over to ChatGPT and start asking questions.
What’s the most common reason people need a lawyer in my practice area? What do people look for when they’re looking for a lawyer in my area? What are people looking for in my city in my practice area lately? It can even help you generate the first draft of your blog post.
Then use a tool like Clearview Social to help distribute those blog posts to anyone you’ve added to your account. They get a notification to share it on their social media staggered throughout the next week.
“So you’re getting a lot of just native looking traffic and some organic searches,” Brafford says. “It’s all the things that Google loves to drive your visibility up even higher.”
Create a Marketing Budget — Any Marketing Budget
Except for some large personal injury firms, most lawyers are not willing to spend any money on marketing — to their detriment.
Few attorneys realize the competitive advantage they can gain by investing a small amount on Google search and social media advertising.
And locally targeted ads on Instagram and Youtube are quite inexpensive.
“If you could advance even a thousand bucks a month, 500 bucks a month, heck, even 200 bucks a month, maybe that generates another client for you,” Correia says.
“And you’re gonna get pretty good ROI on that. That can build upon itself.”
For more detail on these and other tips — plus what Correia and Brafford think about fractional CFOs and even Valentine’s Day — listen to an informative 36 minutes with the podcast link below.
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