A law firm’s financial system involves more than a general ledger and financial statements – it includes the billing system, accounts receivable, cash receipts, disbursements, and trust accounting for client funds. The right business system will put more money in partner/shareholder pockets while making everyone’s job easier.
The system should provide clear and consistent audit trails with good security controls over who can see and do what. You want information to be directly accessible by those who use it: the front office of the law firm. For example, billing attorneys should be able to access all of the financial information related to a client or case. They should be able to access that information from their workstation without having to go through accounting or a secretary. From their workstation, they should be able to view bills previously sent to a client rather than wait for paper documents to be pulled from a file, copied, and routed to an attorney. The best systems take advantage of dashboard technology to provide instantly digestible information that provides working attorneys and those involved in management with situational awareness.
The system should make it easy for legal professionals to track and record billable time regardless of where they are working—in the office, from home, or on the road—including via PDA devices like the BlackBerry®. The best system will let the attorney track and record time through their preferred software or device—for example, while in Microsoft® Outlook® or using a specialized commercial case management system. In short, law firms need a lot of flexibility because of the enormous diversity that exists in most law firms. The best system will accommodate those diverse needs. The best system will connect to other software used by the law firm so information flows between the firm’s business system and those other systems.
On the billing side, it isn’t enough to just print a bill. Today, clients set the rules and law firms have to comply with mandated requirements if they want the business. Pricing and bill format flexibility is a must. And the firm often has to provide the bill electronically in the client’s specified format. Usually it is the firm’s largest clients who mandate those requirements. Billing by e-mail is on the increase. Make sure the system you select provides for automatic bill presentation by e-mail. Automatic testing of time and expense entries against client engagement rules can eliminate rejected bills and reduce client adjustments, making a material difference in realization.
From an efficiency standpoint, transactions should be entered once and once only. Look for built-in wizards to perform tasks like payments to the bills being paid or performing complex tasks like voiding checks.
Once the basics are covered, what makes the difference between one system and another is the ability to use the information for ad hoc analysis and exception reporting. The best systems are proactive, alerting responsible individuals in the firm when certain exceptions occur—i.e., an account has exceeded or reached a certain level of budget, a check has been written for an unusual amount, billable time is missing from a timekeeper, a client’s trust balance has dropped below the appropriate level, etc.
You don’t want a system that disrupts the normal routine of the office every month-end. You don’t want a system that will not share information with other systems used by the law firm. You don’t want a system that forfeits your opportunities to serve the nation’s largest consumers of legal services because it can not meet their mandated requirements. You do want a system from a vendor who backs up their software with a proven track record of services – conversion, training, and ongoing user support services. Check references before you write your check for new software.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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Filed under Technology by Tom Collins
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