The importance of innovation and law firm efficiency cannot be overstated.
The profitability of any law firm is proportional to the amount of time it takes to complete the chargeable legal work completed.
With many legal services moving toward fixed fee pricing models there is additional pressure to ensure as much work as possible is completed with the minimum of demand on fee earners. That said, law firm efficiency must be balanced with the need to ensure work is completed thoroughly and to the required quality. For Solicitor Regulation Authority (SRA) accredited Solicitors, this means they must adhere to the Accounting Rules, Principles, and Code of Conduct.
The vast opportunity of increased legal innovation and efficiency
According to Thomson Reuters Legal Executive Institute, there are huge opportunities to be realised by increasing law firm efficiency. A 2019 survey of small law firms revealed that many faced a wide variety of “significant challenges”, in particular the excessive amount of time being expended on administrative tasks; accounting for up to 40% of the average lawyer’s time. As such, law firms are now focused on improving efficiency through a wide variety of means.
Technology is underpinning the drive for legal efficiency
The need for law firm efficiency is one of the primary drivers towards the widespread adoption of digital technology, including artificial intelligence (AI), electronic discovery (eDiscovery), data analytics, and online client portals.
The law sector, both locally in the UK and internationally, is experiencing a considerable technological shift. Organisations who have maintained many of the traits we know as “traditional law firms” are under pressure from new dynamic entities which are able to deliver legal services in a consistent, rapid, and high-quality manner, and still with high levels of customer service. To do this, fee earners need to be freed up from onerous and time-consuming work which can now be completed by automation tools and software.
Leveraging external service offerings
Law firms are also realising the importance of law firm efficiency by freeing up resources to work on more complex and, ultimately, higher-value work. In addition to technology, outsourcing of essential business services is enabling internal legal resources to focus on what they do best – practice law. Small, medium, and large Solicitor practices are increasingly utilising the knowledge and skills of external business services, including cyber security specialists, IT, and financials (invoicing, legal cashiering, and management accounts). Such is the demand for ‘as a service’ expertise (e.g. software as a service, marketing as a service), each year more and more providers are starting up, with most offering fix price monthly pricing. This approach to law firm efficiency also reaps rewards by reducing the demand for office space, ensuring adherence to the latest standards and legislation, and reducing internal headcount and associated costs.
As we enter a new decade, Solicitors of all types and sizes are focusing on improving law firm efficiency. Whether it be through process analysis and control, digital technology, and outsourcing of essential business functions, there will be two primary winners for those who are ultimately successful; Solicitors who can engage in more meaningful and high-value legal work (and of course law firms themselves), and their clients who will benefit from the extra time that can be spent focusing on their needs. Increased law firm efficiency provides a win-win for all concerned.
Established for over 10 years, The Cashroom are experts in helping law firms become more efficient when it comes to cashiering, management accounts and payroll. With extensive experience in the legal sector our solutions are tailored to the needs of the changing legal landscape.
Our investment in our products and services means we help to improve efficiency and security beyond the capability of many law firms.
For an introductory discussion please contact a member of our team.
If you are regulated within the English and Welsh markets, then please contact:
Alex Holt E: email@example.com T: 07817 420 466
If you are regulated by the Law Society of Scotland, please contact:
Gregor Angus E: firstname.lastname@example.org T: 07875 598 593