Hanging Out A Shingle: Is It Better to Start with Practice Management Software or Select a Solution Once a Firm is Well Established?

Practice management software helps you to relate all the pieces of data to the matter and it recognizes that law firms are matter-centric.

Congratulations! You have decided, either as an individual or with a group of colleagues, to open your own law firm. There is a lot to do and many choices to be made. Everything from office location, firm name, domain name, business cards, internet and phone services to computers (Windows or Mac) must be decided. You may get to the point where you feel you just do not want to make another decision, but decide you must.

What Software Should I Use?

One of the most complex issues is software, because there are so many choices. If you get an Office 365 account, you’ll have Microsoft Word, Outlook and Excel handled, but you also need to think about billing, accounting and practice management. It can be easy to say “I will just use Excel and Word to do my billing and my accountant will handle my accounting,” but there are downsides to this decision. Think about how you are going to track the performance of the firm. If you only get reports quarterly from the accountant, does that give you timely information? Are you capturing and billing for all your time and expenses? Are you collecting payments in a timely manner? The longer you wait to bill and collect, the harder it becomes, so having current information that you can access easily is critical.

The next thought many firms have is “I will use QuickBooks Online.” Now do not get me wrong, QBO is a good program, but it is not designed for attorneys. Making your bills look the way you want, including reflecting trust information and tracking and reporting on trust accounts, is not simple in QBO, nor is managing rates or draft billing.

Alright, you have decided legal billing software is the right choice. Again, lots of options: you can get standalone legal billing software, you can get legal billing and accounting software, or you can get software that combines practice management with billing and accounting. New firms, especially solo professionals, often say “I don’t need practice management software, I will get that when I grow.” My answer is you need it even more as a solo without support staff and starting with it makes it easier to grow.

Why Should I Use A PMS?

Matter-Centric Organization

What is practice management software? You will find varied descriptions, but I describe it as software that combines the information you need to manage your practice. Practice management software helps you to relate all the pieces of data to the matter and it recognizes that law firms are matter-centric. When you look at a matter, you need access to all information including case description, related parties, appointments, notes, phone calls, documents, emails, time spent and case expenses. When you look at a contact, you want to know all the matters that person is involved with and whether they are a witness, an opposing party, a co-counsel, or any other role. With practice management software that interfaces with your billing software, you can capture your time and track how much money a client owes you.

Potential New Client Tracking

Another reason why you should implement practice management software in your firm is to organize your pipeline and streamline intake. When a prospect calls, you gather information. You may need to follow up or you might immediately schedule an appointment and need to send information. If you must enter information in multiple programs and track and coordinate the information you are doing extra work. Do you have the time to do duplicate or triplicate work? Even if you think you have the time, that time could generally be better used developing your practice, practicing law or spending time with family. And what if the prospect calls back or becomes a client? You will want to be able to quickly access your prior information and not be forced to dig through different programs just to find a single piece of information. Practice management software puts everything in one place, easily and quickly accessible. You will look more professional, and provide better service, if you can quickly find what you need. Even if the prospect does not become a client, you may need to have the name accessible for conflict checking.

Practice management software should be part of the solution from day one in order to save you time and money while helping you succeed in the industry.

Timekeeping Tools

When you put an appointment on your calendar, it is easy to capture the time or be reminded to capture the time for billing purposes. If your systems are separate you lose that benefit and, therefore, may miss billing for time.

Greater Collaboration

If you have an associate, assistant or a paralegal working with you, using a practice management solution allows them access to the same information you have. Data in your head, or in Outlook, is accessible to you, but others cannot help with what they do not know. The ability to share information makes everyone more productive.

And a long list of other benefits…

There are other reasons to consider practice management software up front. For example, better practice management tools may benefit you by saving you money on your malpractice insurance. Insurance companies like to know that you have procedures in place to make sure deadlines are not missed and information is accessible and will often reward you for this, or punish if it is lacking, by adjusting rates. Another benefit is starting off with good habits. If you get used to doing things in a certain way, it is easier to continue. If you think, “I will add this later,” you will work around any issues and then need to retrain yourself to use new tools, which ends up wasting both time and money. You may also need to convert information to a new system which is another cost. A single, integrated solution makes everything easier because you will only have to learn one system one time.

Choosing new tools is not easy, but a good consultant can help you find the solution that is right for you. Practice management software should be part of that solution from day one in order to save you, and your firm, time and money while helping you succeed in the industry.

Written by CARET Legal partner, Caren Schwartz. Caren has been serving the technology needs of the legal industry for almost 30 years and leads the accounting services team at 3545 Consulting – Global. Caren’s key focus is back office services, analytics and best practices for law firms. Caren is the author of QuickBooks for Law Firms.

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