What is legal practice management software?
Legal practice management software, or law practice management software, helps lawyers manage day-to-day case workflows and business operations within their law firm. It offers the ability to manage cases, contacts, calendars and scheduling, documents, tasks, time tracking, billing, payments, accounting, client communications, manager-level reporting, and more from a centralized platform.
While there are a number of management software options available, legal practice management software is designed to suit the unique needs of legal practice. Not only is law software made specifically for law firm workflows, it is often vetted by regulatory bodies to ensure that it complies with rules of ethical conduct in the legal profession.
The primary focus for any legal office is the practice of law. Yet general business and clerical operations are also necessary to the success of any law firm. The consequence of errors in any of these duties can not only result in negative outcomes for law firm operations, but also for case outcomes and client satisfaction. In worst-case scenarios, problems like missed deadlines or lost information can also result in malpractice claims and potentially disbarment.
Managing administrative duties properly often requires significant investments in time and resources. To minimize overhead, many lawyers are turning to legal technology to increase efficiencies and reduce the chance of error.
1. More efficient workflows
According to the 2017 Legal Trends Report, the average lawyer spends only 2.3 hours on billable work in a given day, and 48% of their non-billable time is taken up by administrative tasks.
Legal practice management software can help legal professionals complete administrative tasks more efficiently and with more confidence and transparency. With better access to information and more opportunities for collaboration, legal practice management software can help improve staff productivity and satisfaction, which can also increase staff retention and reduce investment in training.
2. Reduced costs
Legal practice management software can help reduce the cost of running a law firm by simplifying technology investments and reducing the need to hire more legal staff. Working with a comprehensive software system can also reduce the need to rely on multiple software services. When working with complementary software services, practice management software can also sync information across your firm to avoid repetitive data entry.
Developments in internet-based technologies have also introduced several cost-effective legal practice management options that offer more modern interfaces at more affordable prices.
3. Increased data protection and client confidentiality
Data security and client confidentiality are also major concerns for law firms, which must manage large volumes of information across several cases in accordance with ethics requirements. Legal practice management software can help ensure best practices are in place for storing and backing up all firm information, keeping it protected even in the event of a theft, fire, or natural disaster.
Legal practice management software is designed specifically for lawyers and other legal professionals. Some platforms also have the benefit of being designed for law firms both small and large, operating within multiple practice areas. Often, these systems can be implemented across multiple departments, working in multiple jurisdictions.
The right legal software also supports both front and back office workflows. For attorneys and legal support staff, the goal of legal practice management software is to ensure every member of a law firm can manage their own personal tasks in coordination with the rest of the firm. Whether you’re a practicing lawyer, paralegal, office administrator, legal assistant, bookkeeper, or IT professional, legal practice management software can help consolidate workflows and improve office productivity.
Legal practice management software allows you to store all of your firm’s information in one secure place. This creates a working environment that has better access to information and supports better coordination across a greater range of tasks. Everyone always has access to the most up-to-date case and contact details at all times, and no one has to spend time chasing down information.
With the right office technology, administrative tasks can be completed more efficiently with less chance of error—ensuring that nothing gets missed. Legal practice management software can help achieve this across all administrative functions within a law firm.
1. Legal case management
At the core of any law firm, case and contact management are essential to ensuring the efficient and effective progression of a legal matter. Losing track of information, or having to spend time tracking that information down, can be extremely costly. Additionally, not knowing how to prioritize tasks or losing track of meetings or deadlines can have devastating impacts on the outcome of a client’s case.
Case management systems help keep all client information up to date, while also ensuring a dedicated place for storing all case notes and documentation. It also offers systems for keeping a diligent record of all upcoming meetings, deadlines, and tasks, which are supported by customizable alerts and reminders.
Many legal practice management software systems also offer deadline calculators that sync automatically to court rules for specific jurisdictions. For law firms that deal with court rules-based deadlines, these types of technology-based solutions can result in exponential time savings, opening up more opportunities to attend to important casework.
2. Legal document management
Perhaps one of the most significant advantages to working with legal practice management software is that it supports paperless workflows. The problem with paper-based workflows is that physical copies can easily be misplaced or lost, and unless there are multiple copies they can only be accessed by one party at a time. Version control also becomes more difficult with paper, and simple tasks like document retrieval can be tedious and time-consuming.
Legal document management systems, however, offer virtually instant access to any file by anyone with the right authorization. Instead of searching manually through a file cabinet, electronic storage makes documents much easier to find through search bars or other sort and filter options. Electronic storage also offers the ability to automatically backup documents in a secure offsite location to prevent loss in the event of a fire, natural disaster, or other force majeure event. Additionally, as more legal work is conducted electronically, having documents stored as electronic files makes it easier to share them via email, secure client portal, or other electronic sharing methods.
Automated document assembly is another benefit to working with legal practice management software. Since all case and contact information is stored in one place, documents can be prepared from templates that will automatically pull relevant information into the desired fields. This can be especially useful for long, complicated documentation, which can be susceptible to error when prepared manually by firm staff, or other documents that are used repeatedly for different cases and clients.
3. Legal time tracking, billing, and client payment
Whether a law firm bills by the hour, based on flat fees, based on a contingency basis, or some other means, keeping track of all work performed for a client can be tedious and cumbersome, especially when it comes time to aggregating this information into an invoice. If any information gets missed, that work might never get billed for, which results in a direct loss of revenue. An inefficient billing system can also delay client payments, which causes cash flow problems for the firm.
For any legal staff involved in the billing process, however, the task of generating and sending invoices can require a major investment of time. Reconciling payments to their invoices and accounts can also be a major bottleneck.
When using legal practice management software, however, those doing billable work can track their time or document their tasks so that they are logged directly to specific cases and clients. Come billing time, anyone can generate a list of invoices in bulk, each with a record of expenses and work performed—and it can be done in a matter of minutes instead of hours or days. Legal billing software can also automatically apply custom rates based on the practice area, the person doing the work, and other variables such as the type of work being performed. Discounts, taxes, and late payment penalties can also be applied automatically if needed. Once created, invoices can be reviewed and shared electronically via email or secure client portal for quick payment.
The advantage of sharing invoices electronically is that many legal practice management software systems offer electronic payments systems that allow clients to pay their legal bills online. For payments collected through these systems, all the billing and account information stored in the firm’s management software will update automatically, saving staff the task of reviewing and updating manually. And, according to the 2017 Legal Trends Report, allowing clients to pay by credit card can increase payment times by an average of 39% compared to the time it takes them to pay by other means.
4. Legal accounting and client trust management
For law firms that handle money on behalf of their clients, whether through retainers, advanced fee deposits, escrows, or any other circumstances, attorneys are held to strict requirements for professional conduct. The problem with most accounting software is that they don’t take into account these rules for lawyers.
Legal practice management software offers the ability to manage client money using separate matter and client account ledgers. This allows firms to keep diligent records of who owns every dollar in their possession and makes for simple three-way account reconciliations, which is a requirement among many jurisdictional regulators. Managing trust account ledgers within the same system that handles billing and payments can also help simplify bookkeeping, since any payment will update any associated ledgers automatically.
Many legal practice management software systems offer robust integrations with some of the leading accounting software systems, including QuickBooks Online, Xero, and Klyant. This means that all relevant financial data kept in the practice management software will populate automatically in the accounting software, where firms can manage additional budgeting functions such as non-reimbursable office expenses and staff payrolls. With a full-service accounting system in place, firms will have a much easier time working with accountants on a month-to-month basis, and especially leading up to tax filing deadlines and other banking or budgeting milestones.
5. Lawyer-client communications
Communicating with clients can take up a significant amount of time and resources on behalf of lawyers and other legal support staff. Whether clients are reaching out via phone or email—or showing up at the office—every inquiry takes time to address. And while it’s important that client needs are being met, minimizing the amount of time spent on the phone or typing emails can open up significant time for other tasks focused on progressing a case or matter.
Many legal practice management software systems offer the ability to set up an online client portal, where case information can be stored and accessed by clients at their leisure. A client portal essentially offers a secure online hub where, with the right credentials, clients can log in and download shared documents, accept calendar invites, and review case communications. Since the client portal is always accessible online, clients can access their information anytime, 24-7, without needing to contact the law office.
Managing large volumes of client communications is important for law firms, and many legal practice management systems allow legal professionals to send and track communications from the software itself. This allows attorneys to keep detailed communication logs for every case, which can also be tracked as work entries to be applied automatically to an invoice.
6. Law firm management
As law firms grow, keeping track of what’s happening on a daily basis becomes more of a challenge. Not only do firm managers need to keep track of daily tasks to ensure cases are progressing smoothly, but they also need to monitor business and accounting metrics to ensure long-term financial health.
For day-to-day workflows, many legal practice management software systems provide task management features that allow managers to assign and monitor assignments across the firm or on a case-by-case basis. Tasks can be put into templates, which can then be assigned based on the type of case. Once assigned, managers can review for completion or monitor their progress.
Once a firm’s information is stored within a centralized practice management system, it becomes easier to aggregate and analyze that information for digestible insights. Firm-wide business insights, such as hours billed, invoiced, and collected upon, can be monitored from in-app dashboards or downloadable reports. Managers, or anyone else who needs the information, can look at how many hours were worked on a weekly basis, and then follow up with any issues in a timely manner.
Legal practice management software aims to bring together every aspect of a law firm for better collaboration and insight. Like any purchasing decision, it’s important to consider long-term goals over any specific features that may seem attractive in the short term.
1. Cloud vs on-premise
One of the first considerations to review before purchasing legal practice management software is whether to purchase an on-premise or cloud-based solution.
On-premise solutions represent the more traditional software model, where companies purchase licences for individual staff and then install the software from a disk or via download. The software runs on each individual’s computer, and all information is stored on that same computer. Since it’s important that information be shared and retained within the law firm, most firms will also network and back up data from individual computers to a central file server shared across the firm. This network is typically limited to a firm office, which means that staff need to be in the office to access, share, or back up data. To access the database from outside the office, a virtual private network (VPN) would need to be set up and maintained.
Cloud-based software (also referred to as web-based or software as a service (SaaS)) embodies the new software model that has emerged with modern internet technologies. Cloud-based legal practice management software is accessed through a web browser, such as Google Chrome, Mozilla Firefox, Safari, or Microsoft Edge. Much like using Google’s Gmail, Dropbox, or an Amazon shopping cart, data is stored in the vendor’s database instead of on a local office computer. This means that as long as they have a valid username and password, firm staff can log in to their firm’s practice management software from virtually any web browser, regardless of whether they’re in the office, at home, or another remote location. This can offer several benefits in terms of the overall setup and maintenance costs, compatibility, usability, and security.
2. Cost, maintenance, and version updates
The cost structure varies greatly between on-premise and cloud-based legal practice management software.
The traditional on-premise software programs often require high upfront costs to purchase and install. Licenses themselves can be costly, and setting up an in-house server network typically requires the help of an IT specialist. The benefit to this type of investment is that the software is paid in full and will not incur future costs in and of itself. However, firm owners should be mindful of hidden costs that can quickly add up:
- Updates and security patches typically require regular attention, which may require support from an IT consultant.
- Individual licenses typically need to be repurchased every three to five years when a major revision is released for the software. This is necessary to ensure ongoing functionality and security, but often amounts to purchasing a brand new software package, which may also require hardware upgrades.
- Since the software is installed on so many computers, across a complicated server network that likely involves several other software and hardware configurations, troubleshooting issues when they arise can be difficult, time consuming, and costly. For example, it may take time for a consultant to identify a potential conflict, which can then require reaching out to different hardware and software vendors to resolve.
Cloud-based legal practice management software is typically sold on a subscription-based model, paid on a month-to-month or annual basis, which can result in more predictable and often less expensive costs when compared to an on-premise solution. And, since cloud-based software is hosted through a web browser, maintenance, security, and troubleshooting are significantly less cause for concern:
- Updates and security patches are installed by the service provider on the company’s servers as soon as they’re available, resulting in very little disruption, if any, to law firm operations.
- Cloud-based software is run through an internet browser, which makes it much less likely to conflict with any other office technologies. This is because web-based software must comply with strict internet protocols, which are more universal than the proprietary systems that many on-premise products are built upon.
- If any problems arise with a cloud-based service, they are likely caused by an issue on the developer’s side, which means they will affect the company’s entire user base. This gives a very strong incentive to resolve the issue as soon as possible, with all available resources. In most cases, this means problems get solved as soon as they happen, at their source, rather than based on the availability of a consultant.
3. Access to information
Not all legal work gets done in the office. More and more, it’s being done at home, in client offices, in hotel rooms, on the road, and in court. Many virtual law firms have forgone office space altogether. According to the 2016 ABA TechReport, 77% of lawyers work regularly from home (not counting those who don’t have an office), 38% while travelling, and 28% from client offices.
Technology in the courtroom is also becoming more common, with 80% of lawyers bringing at least a smartphone to court. How do lawyers use electronic devices in court? For laptops specifically, the most common activities (by percentage of lawyers) include:
- Evidence and document access (35%)
- Internet (32%)
- Online research (30%)
- Email (30%)
- Presentations (28%)
Cloud-based legal practice management software can be logged into from anywhere when using a laptop with an internet connection. Some solutions also offer a dedicated mobile app that can be used to access, edit, and share information stored in the firm’s management system. For attorneys working on the go, this means that they can quickly access case, contact, and calendar information when visiting a client’s office or while attending court.
For lawyers who need to track their hours, a dedicated mobile app lets you track time directly to specific matters using a timer or logged entries. This gives lawyers and other legal professionals more flexibility in how they track time, ensuring that all work is accounted for while minimizing the risk of entries being lost or misplaced.
Laptop use in court
4. Platform compatibility with other software
It’s important to look at legal practice management systems as more than just a single piece of software. Whether it’s word processing, email clients, electronic calendaring, document assembly services, client intake databases, bookkeeping systems, or other specialized legal tools, modern law firms typically incorporate several technology solutions into their office workflows. Where this can be problematic is when each piece of software contains its own database of information that needs to be manually referenced and entered in another place. Even with the most robust systems in place, manually recording and transferring information is both inefficient and prone to error and omission.
Many legal practice management software options give you the ability to integrate these systems into a single platform that can access data from different technologies to ensure that they are all up to date in a central location, without manual entry. This makes it easier to access information between different softwares while ensuring the information is accurate at all times.
Being able to connect your legal practice management software to other software applications not only ensures that you can connect to services that may already be in use at your firm, it also gives you the flexibility to change or add tools, ensuring more options for growth in the future.
5. Usability and staff training
It’s important for law firms to provide the right tools for its lawyers and other legal staff. When software is difficult and inefficient, it can lead to team frustration, workarounds that are difficult to track, and higher rates of turnover. Training can also be an issue for difficult software, which can increase the time and cost of onboarding new members to the firm and delay work contributions.
When switching to a new legal practice management software system, it’s important that everyone can quickly adapt to new, more efficient workflows with a little disruption to firm operations as possible. How a system is designed can affect this transition, as well as the support and training available. Some key factors to consider include:
- How much training and support is provided with the product, and when is it available? Having access to knowledgeable experts on how to use firm software can help ensure a smooth transition—and assist when bringing on new staff in the future. Working with the simpler technology framework of cloud-based systems also helps ensure that any training and support stays focused on learning how to use the product rather than troubleshooting complications with the software.
- Is the software easy to use? One of the most overlooked features to consider is the interface and usability. Many traditional, on-premise software systems have been around for over 20 years and rely on out-of-date interfaces. As a result, many lawyers and other legal professionals find them extremely cumbersome and difficult to use. Cloud-based practice management solutions are newer to the market and have been built from the ground up with more intuitive, modern user interfaces that most professionals find more aligned with other technologies they use.
- Is the software compatible with existing firm technology? Cross-platform compatibility can also be an issue for staff who may need to work out of office or between offices. Many on-premise solutions are limited in their compatibility, able to work only on Windows-based operating systems. Cloud-based solutions have the advantage of working across different operating systems (Microsoft Windows and Mac OS), and even on mobile devices through dedicated apps for both Android and iOS.
6. Ethical compliance and security
Since law firms operate under strict rules for professional conduct, such as the duty to protect client information, legal practice management software offers advantages over other systems. Not only does it offer unique trust accounting workflows to keep separate ledgers for client funds, it also provides reports for convenient three-way reconciliations. Electronic case management and document storage also ensures that client records can be stored and easily accessed for as long as is required for auditing purposes or as dictated by jurisdictional retention policies.
The American Bar Association offers some discussion on the security and ethics of using on-premise and cloud-based practice management software, including a list of jurisdictional ethics opinions organized by state.
Data security should also be a major concern for any law firm. According to the 2016 ABA TechReport, 14% of firms reported having experienced a data breach at some time; this number jumps to 25% for firms with 10 to 49 attorneys and to 26% for large firms with 500 or more attorneys. The trend has been consistent within a percentage point over the last three years, but these numbers may be underreported, as data breaches may occur without the knowledge of the firm or the staff who participated in the survey.
Storing information in a cloud-based practice management software can also be more secure than an on-premise solution, which if not kept up-to-date with the most current security requirements, may be subject to malicious hacking or virus attacks. On-premise solutions are also at a greater risk for disruption in the case of a fire or other disaster; if a central server is damaged, case information may be irretrievably lost.
Cloud-based services offer a more robust backup system, often storing firm data in multiple locations that are protected by the most advanced security protections available. And any information transmitted through the service should also be encrypted to prevent anyone from discerning the information if it were somehow intercepted.
Finally, firm managers may also want to limit access to certain information within the firm, which is made possible with advanced permissions that allow staff to see only the information they are authorized to access.
1. Are you struggling to reconcile case information between your calendars, contact lists, and document management systems?
Legal practice management software can help organize and consolidate firm information so that it’s easier to access, manage, and maintain. With better control of your information, you and other staff at your firm will be better prepared to manage your legal responsibilities on behalf of your clients.
2. Are you overwhelmed by the amount of information required to manage a law firm on a daily basis?
When information is organized, it becomes much easier to manage. You don’t need to chase information or review documentation to ensure it’s accounted for. Storing information within a legal practice management solution means it gets stored in a secure central location, making it easier to search and find information.
3. Are you spending too much time generating invoices and collecting payment?
Managing invoices and collecting payments is not only time-consuming, it’s also non-billable, meaning you need to factor the time it takes into all your other firm costs. Legal practice management technology can vastly reduce the time spent creating invoices, managing follow-ups, and reconciling payments—opening up more time to perform other tasks.
4. Do you have difficulty accessing firm information when out of office?
Many lawyers and other legal professionals take their work beyond their office walls—to court, to their client’s offices, or to a home office. In many cases working out of office can improve client service, making them feel more attended to, or improve work-life balance, by affording more time and flexibility for personal commitments. Cloud-based legal practice management software can give attorneys the ability to access all of their work from anywhere, without cumbersome or expensive VPNs.
5. Do you find yourself copying information from one place to another?
Chances are most law firms already implement several technologies at the office. Whether it’s email, word processing, or some other specialized legal software, legal practice management software can facilitate better coordination between services, which also makes for a better, more organized system for tracking information.