Making time for the business side crucial for small firms

George Daniel is a small town attorney working in Yanceyville. His four-attorney firm, Daniel Thomas, is typical of many firms its size in that a large part of Daniel’s time, as managing partner, goes toward administrative tasks. He said this is just part of what small firm attorneys sign up for.

“I still cut my own grass,” he said. “You do what you got to do. It has nothing to do with law substance, but it has to do with the law business.”

While small firm lawyers understand the dangers of failing to adopt new technologies and practice models, a recently published national survey found that many are too busy keeping their lights on to try new techniques to help them survive and compete.

While Daniel may be ahead of the curve in his use of digital marketing, cloud computing, and case management software, many small firm attorneys who participated in the Thomson Reuters survey said they are hesitant to slow down long enough to make their businesses run more efficiently. The report listed acquiring new clients, time spent on administrative tasks, and the increasing complexity of technology as the biggest challenges small firm attorneys face.

While a lawyer’s job is to practice law, the survey found that the smaller the firm, the more time attorneys spend on administrative work—like bookkeeping and case management—which does not generate legal fees. The report found that, on average, 40 percent of a small firm lawyer’s day goes to such tasks.

“And most lawyers will tell you that it is highly unlikely that they will actually collect money from clients for each of those potentially billable hours,” the report said. “By the time we account for leakage due to poor timekeeping practices, discounts and write-downs offered by the lawyer to address perceived client concerns, and client pushback on the final invoice, the proportion of each working day for which a lawyer will ultimately be paid dwindles quickly.”

Many lawyers and small firms are “pennywise and pound foolish,” said Matthew Van Sickle, a solo practitioner in Raleigh who co-chairs the North Carolina Bar Association’s Small Firm and Technology Committee.

“Attorneys are reluctant to spend money on new technologies, or they’ll spend the money and not allocate the time required to become proficient at using them,” Van Sickle said. “You have to set aside the time to understand the technology and when you do, it will streamline your administrative work and make it easier to do the legal work that’s at your desk.”

Thomson Reuters’s 40 percent figure may even be an underestimate, said Brian King of King Law Offices, which employs 20 attorneys in 13 rural locations in North and South Carolina. But the administrative work must be done for law firms to function properly.

“A lot of attorneys just want to go practice law,” King said, “But the best thing they can do is set aside a day each week to work on the business, which is hard to do if you’re in court … but if you don’t have that ability, it will creep into your work every day.”

King recommended small firm attorneys reach out to a vendor to get help to identify areas where they can become more efficient. In addition, he said, they can also help identify which technologies are most cost-effective for the needs of a particular practice.

Legal Cloud Technology, based in Raleigh, is one such vendor that works with small- and medium-sized practices to identify and fix inefficiencies. Pegeen Turner, the company’s president and the other co-chair of the NCBA committee, said that cloud-based technology is the great equalizer.

“With today’s technology, small firms can compete with big firms toe-to-toe,” she said. “Software used to be just for big firms … now, the same document and practice management tools are available without having to spend exorbitant amounts of money.”

While software isn’t one-size-fits-all, Turner recommended attorneys consider utilizing three specific services, if they haven’t already: a cloud-based office management system (like Microsoft Office 365 or Google Suite), an all-in-one case management software (like Clio, Practice Panther, Actionstep, or MyCase) and document assembly tools (which are often included with the purchase of case management software).

It may also be worthwhile to pay for a subscription to such services, as opposed to downloading or installing them directly onto one’s desktop or server. Also, having as much information available on cloud-based platforms allows attorneys to work from virtually anywhere securely, and a backup is always available in an emergency.

“You pay a little more that way, but it’s worth it when you consider the time you save not having to manage servers or pay an IT person,” Van Sickle said. “And you don’t have to update your software, it’s updated as it’s released.”

While the survey found that nearly half of small firms have adopted new technologies, it also showed that only 27 percent have changed marketing strategies, and less than 20 percent have changed staffing ratios, practice workflows, or billing practices.

Mark Powers, the president of Atticus Advantage, which helps small and solo firms maximize efficiency, said that beyond technology the biggest issues he sees have to do with time management, marketing, and staffing.

“There are fundamental issues they have to work on,” Powers said. “It has to do mostly with the way they’re thinking: ‘If I do good work and work hard, everything will work out.’ Everything that has to do with growing the business, managing it, or reducing stress is a distraction to them. And that’s OK until you start a firm, but now you have to think like a business owner and master those tools. If they don’t shift, they are trapped.”

Powers suggested firms should simultaneously work on being more selective about the types of cases they take while making more efforts to market themselves. Instead of taking any case that walks in the door, Powers suggested creating a rating system, prioritizing clients who listen to advice, pay bills, and show up for appointments. In turn, being more selective requires attorneys to work on the things that bring them business, like making connections that bring referrals, to make up for any business lost from turning clients away.

As technology advances, larger firms are more and more able to do legal work in small communities remotely, making it more difficult for local attorneys to compete. King said it is up to small firm attorneys to adapt to ensure access to high-quality legal services.

“If you don’t adapt, the work won’t be there, and it’s the public that loses out,” he said.

Follow Matt Chaney on Twitter @NCLWChaney