Challenges for Small Law Firms
A few years ago, there was a survey of solo and small law firms (of 30 attorneys or less).
It ranked the biggest challenges faced by these practices in the following order:
- Acquiring new client business (78%)
- Spending too much time on administrative tasks (69%)
- The increasing complexity of technology (63%)
- Cost control and expense growth (62%)
- Clients demanding more for less (62%)
If you are a solo or small law firm, this survey, which was performed by the Thomson Reuters Solo and Small Law Firm Group, at least lets you know you are not alone in these struggles.
Now, just because these are shared problems does not mean they have to be hard-fast rules.
For instance, there were still 22% of small firms surveyed that didn’t struggle with acquiring new business.
It’s then fair to ponder how these more successful firms leap with reckless abandon over those hurdles.
Well, I don’t have a survey with stats and percentages to back up the following hypothesis.
However, I’ve worked with solo and small law practices for the better part of a decade and possess insight into how they succeed and fail.
I can say with confidence that it’s primarily through the savvy leveraging of technology that some smaller firms thrive where others tend to flounder.
Allow me to take a closer look at each aspect involved in the survey:
1. Acquiring New Client Business (78%)
Whether you sell shoes, insurance, air freshener, or – yes – law-based services, you’re in sales.
Meaning you have customers. Yes, you’re an attorney, so you call them clients—but it’s the exact same principle.
Like any brand, you need to manage the relationship you have with those customers to convert prospects into paying consumers.
This fact makes it even more confusing that smaller firms are failing to utilize any kind of Customer Relationship Management (CRM) tool. In fact, if you’re particularly industrious, your case management software can perform your array CRM tasks.
Remember, although you might possess such a tool—it means virtually zilch if you aren’t using it correctly.
In many cases, smaller firms tend to ignore their impressive CRM technology and – as a result – neglect their follow-up duties with prospective clients.
It’s really a slippery slope when you break it down.
Due to lack of follow up, your firm will fail to rebook missed consultations with prospects, who’ll inevitably end up with your rival down the street.
Employing these technology tools to their fullest capabilities has an array of proven benefits. This necessitates a comprehensive set-up process, as well as consistency of use and intensive maintenance.
In merely having the patience to increase your proficiency with these tools, you’ll see an influx in prospects turning into lifelong clients.
Conversely, ignoring a CRM tool’s existence generally leads to wasted time and poor results in customer acquisition.
Would you prefer spending more time on acquiring fewer clients, or less time acquiring more clients? It all seems quite straightforward.
Of course, there is the matter of using the technology correctly—but even that isn’t the brain surgery you might think it to be.
Software vendors far and wide provide training materials, such as manuals and videos, to teach how to use their CRM tools.
However, that means you need to dedicate time to training your entire team to use this tech.
Nope, you can’t just purchase technology and expect it to make things better magically.
Don’t sweat it, though. Such efforts don’t have to detract from your other work. Even a half an hour per week will help you extract incredible value from your CRM investment.
2. Spending Too Much Time on Administrative Tasks (69%)
Nothing quite cuts into your day like mind-numbing administrative duties that seemingly prevent you from ever starting on more vital work.
Many of these tasks, as a lawyer, tend to fall under the IT umbrella. In this case, there’s the potential to delegate these responsibilities to an independent IT provider.
So, write a list and decide which administrative duty fits this description.
After this small – yet intelligent – effort, you’ll immediately be rid of a few time-sapping tasks.
Once you’ve eliminated these IT-based jobs, it’s time to take a hard gander at your other administrative work. The crux of your thought process should center around streamlining each task as much as humanly possible.
Contemplate how efficiently your team operates on the computer. Carefully examine its various processes and how it impacts their speed, accuracy, and overall productivity.
A specific anecdote comes to mind, where a few years back, I worked for a client where one attorney was unsure of how to edit PDFs.
When it came time for her to add/remove a page, or merge a document, she would save it to a flash drive before marching across the office to the manager.
Then the office manager connected the flash drive, opened the file, and performed the necessary task. This would happen once daily, at a minimum.
Sure, it would only take a few minutes—but that time adds up when it happens every day or multiple times per day. Plus, it halts the office manager and the attorney from focusing on more important work.
You might think I’m being a touch dramatic.
Still, a reputable study from UC-Irvine cites it taking 25 minutes, on average, to return to the original task after an interruption.
In extrapolating even further, the math shows that this wastes about 7,500 minutes per year since it necessitated AT LEAST 30 wasted minutes every day.
As a response to the above issue, we quickly trained the whole staff on the PDF management basics.
The result? 125 hours of recouped time based on a 40-hour workweek.
What I learned in this scenario is that you should never assume anything about your staffs’ aptitude with technology. Take the time to ensure they know the basics, and it’ll enhance productivity at a tremendous rate.
3. The Increasing Complexity of Technology (63%)
At every office, there’s always the one person that gets asked all the tech questions. Generally, that individual is nothing more than a hobbyist, at best.
In 2020, technology is growing at a rapid rate, and relying on a full-time attorney to provide efficient technological solutions isn’t going to suffice.
Perhaps these individuals can set up a Mac in seconds (it’s quite straightforward). Yet, when you ask that same person to equip the same device with the requisite security protection, you’ll receive more questions than answers.
Or they might be perfectly capable of adding an email account to an iPhone. But the issue of ensuring your firm’s data is secure and recoverable on mobile devices is a whole different kettle of fish.
Don’t feel bad if you – or the staff member you’re charging with these IT duties – can’t perform these tasks. We’ve never had a client who could perform these functions when they first began working with us.
Given the nature of a law firm’s information they’re protecting, relying on non-experts to deal with these matters will only cause strife.
Alternatively, seeking out the advice of a legal technology expert with a thorough grasp of the industry can set your firm on a successful path. Such an individual knows enough about law and can combine that knowledge with their technological expertise to provide an optimal IT solution.
Believe me, what you save in both security headaches, and general disaster-protection will far eclipse your initial investment.
4. Cost control and expense growth (62%)
Here’s an issue that hamstrings smaller law firms due to a certain amount of stubbornness and misguided technological philosophy.
Some individuals, with an older school approach, see technology as – at best – a necessary evil. Instead of leveraging tech to their advantage, they use it because they’re aware there’s no other option.
Does this description sound like you?
Well, if your mindset is even slightly resembling what I’ve just discussed, your technology is essentially a paperweight. And it can’t be used to control costs or neutralize expense growth.
I’ve seen it happen far too many times. Firms believe purchasing five-year-old computers to be a cost-cutting measure when really, it costs more in the big picture.
Because those machines last about as long as a fight between a person and a man-eating tiger.
Then you end up spending in a reactive manner, creating a spiral of repair and replacement costs that turns technology into the enemy.
Alternatively, if you’re proactive, decisive, and strategic about your technology – and apply it correctly – it successfully controls costs and expense growth.
With a well-thought-out approach to IT costs, it’s likelier that your support and hardware spending can be budgeted accurately. Meaning, there won’t be unseemly and unforeseen expenses that throw your firm into a state of disarray.
Even better? Your staff will be working on devices and tools that are equipped for the demands of today. As such, they won’t grow frustrated with working on systems from the stone ages.
These modern devices and tools streamline and enhance your operations at a rapid rate.
Properly utilized technology has a multiplier effect on workplace productivity. When you see these results, you’ll begin to consider newer, vaster solutions.
To give some context, an intake tool that integrates with your case management system might cost $200. If that software saves your staff ten hours of manual labor per week, it pretty much pays for itself during its first hour of use.
Your staff, instead of being hindered by a weak system, can then focus on more critical aspects of your firm—such as client acquisition and marketing.
5. Clients Demanding More for Less (62%)
It’s unrealistic for your firm to fly against the demands of the market.
As ideal as it’d be to charge more for less, competition and client demand has resulted in the complete opposite being the truth.
Now, you can lament your eroding profit margins, or you can think about a solution.
With technology enhancing your day-to-day processes and operations as a law firm, charging less for more work isn’t unrealistic. And, it won’t seem like such a miscarriage of economic justice, either.
Since you’ll be spending – at least – 1/3rd less of time on your work, cutting your rates won’t sting as much.
Plus, you’ll be able to accumulate a more extensive client base, so you’ll be pulling in more revenue—even after slashing your rates.
Naturally, this kind of model is reliant on having a streamlined system that fully leverages technology.
The technology and tools, themselves, can be a selling point that provides your clients’ value. If you point out that many other law firms lack technological savvy, your firm will stand out for its prowess in this avenue.
Prospects will trust that you’ll work accurately and efficiently on their case, at a reduced cost.
If any of the solutions I’ve discussed sound appealing to you, contact GlobalMac IT and find out what a partner with expertise in law-based tech can do for your firm.