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The 5 Best Ways to Increase Your Law Firm's Efficiency

Increasing Law Firm Efficiency

Many law firms are not taking advantage of the various ways they can increase their business' efficiency and still have a positive return on investment (ROI). For the purpose of this article, we define increased efficiency as:

  • Taking steps to reduce the costs to acquire a new customer
  • Increasing revenue per man-hour
  • Decreasing client turnover

To increase your firm's efficiency, try implementing the five following best practices:

1. Audit Your Team’s Productivity

A productivity audit helps determine whether your firm is optimally productive with the equipment, personnel and resources currently available. The audit will help find duplicative efforts in processes and help identify opportunities to streamline. A few examples:

  • Learn how your employees spend their working hours. A firm that bills time in 15, 10 or 6 minute intervals has a good chance at capturing associate productivity. It also helps if attorneys mark down their billable activity each day instead of waiting until the next day or later that week. 
  • Review all law firm activities that do not lead to billable hours. In any particular year, for example, an associate may bill a total of 2,000 hours of their time to client codes, but the amount directly billable to the client may only amount to 1,800 hours. The balance (200 hours) becomes charged off as firm time.
  • Some firm activities are not billable at all, such as continuing education courses, networking with fellow attorneys and marketing to prospective new clients. Lawyers often spend more time than they realize on projects that do not generate revenue. This may be especially true for solo practitioners. A recent Clio study found that sole practitioners only bill 2.24 hours in an 8-hour day. That's about 22% for solo practitioners and 28% for larger firms. 
  • Errands and administrative activities are important to law firms, but shifting them to non-attorney staff will increase the opportunity for attorneys to do more directly billable activities.

You may be pleasantly surprised to find that after a firm corrects the issues above, each hour produces higher revenue.

2. Automate Your Data Entry

A manual data entry system has your staff operate or react to data and then enter it into a system. If you have an automated system, the software operates largely on its own.

Sometimes complex data requires manual manipulation but it's important to identify which form of data entry the firm needs for specific data sets. This will lead to a more autonomous way of entering data. The more you can automate data collection, the fewer billable hours the firm will lose and will also make it so there should be less errors overall. 

As an example, integrating intake data with Customer Relationship Management Software (CRM) and Case Management Software (CMS) will eliminate the duplicative effort to re-enter information. Also, migrating to electronic data forms eliminates the need to fill out, save and file paper forms.

These practices lead to higher revenue per man-hour since the automation saves valuable time that attorneys may use on billable tasks.

3. Track Your Leads

Various circumstances may cause leads to slip through the cracks, never to be seen again. However, a firm that uses lead tracking through software can make sure no lead is truly gone. This means attorneys can revisit “lost” leads at a later date and try to reconnect with them, potentially increasing revenue for the firm.

Using technology to track client leads decreases the firm's customer acquisition costs and saves staff downtime.

4. Engage Your Employees

According to a study by Gallup, companies with engaged employees generate 22% more profit for their employers than those who are not engaged. Therefore, finding ways to engage your employees will pay rewards in higher profits and increases in income per man-hour. Some suggestions are:

  • Show that your firm recognizes employees' hard work and appreciates when they complete a job well done
  • Interact more with employees to show respect for them and their work
  • Encourage employees to use their creativity to solve problems so they feel more a part of the firm

5. Outsource Your Intake to a Legal Call Center

Outsourcing intake to a legal call center is the saving grace for many law firms because assigning non-income-producing functions to outside resources results in an increased amount of income for each hour billed. 

If a law firm does not pick up a call after-hours and on weekends, that caller will most-likely call another firm. Each lost lead wastes the money your firm spent attracting the lead in the first place (marketing costs) and raises customer acquisition cost. On the other hand, a legal call center answers calls and can respond to web leads 24/7/365, meaning no leads are lost to slow response times. This ultimately lowers your firm's cost to acquire a new customer.

Legal call centers leverage expertly-trained legal intake specialists who can answer calls and web inquiries, set appointments, transfer calls, qualify and convert clients, and more. If your law firm doesn't have to retain a staff member to function as a dedicated intake specialist -- and instead outsources the job to a legal call center -- your administrative overhead is automatically reduced and revenue per man-hour increases.

The Importance of Firm Efficiency

Nearly all law firms exhibit areas they can modify to increase efficiency. Changes should result in spending less money for each client lead, as well as increasing revenue brought in each day by each employee.

When firms outsource tasks like intake, it means employees have more time to take on assignments that engage their creativity. That, in turn, makes them - and the firm - much more efficient. And while there are more than five ways to increase your firm’s efficiency, the above corrections hold some of the biggest and easiest wins for your law firm’s bottom line.

Better Intake = Better Marketing ROI

Tags: Law Firm Growth Strategies

A Blog for Law Firms:

On the Alert Communications Blog we're publishing articles dedicated to helping your law firm improve client intake and increase marketing ROI. Our team of experts regularly research, report on, and write about topics that help us super serve the legal industry, and specifically the personal injury and mass tort sectors.    

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