5 Year-End Reflections For Law Firm Leaders

1. Your business model and processes

Ask yourself: will our business model allow us to adapt rapidly to market changes? Proactively diversifying aspects of your practice can help mitigate risk. 

• Practice areas and subspecialties. If your firm serves clients in multiple practice areas, you may be in a better position to shift gears if a practice area contracts. If you specialize in a single area, it may be feasible to add a new subspecialty or adjacent service so you are less dependent on that line of work. 

• Types of engagements. Accepting only one type of engagement, like lengthy litigation matters, can lock you into a rigid revenue cycle. Taking stock of opportunities to add other services, like retainer cases, can improve cash flow.  

• Fee arrangements. Many firms are using value-based pricing, milestone pricing, and other alternative fee models. Alternative fee agreements can offer more financial certainty for you, and clients may also prefer them. You can leverage historical time data to set fees that accurately reflect the effort you are likely to expend.  

Take the time to reinforce the operational fundamentals that create a solid foundation for your firm: policies, procedures, and workflows.  

• Time entry. Review your fee entry procedures and workflows for possible improvements. If you have not established guidelines on fee narratives, now may be a good time to do so. In addition to meeting clients’ billing requirements, the fee narrative is a chance to speed up collection by describing the work in a way the client understands and values.  

• Invoicing/statements. It is important to send statements on a regular cadence (usually monthly) for all fee structures. Regular invoicing can keep you top of mind for clients and makes collections easier. For alternative fee matters and longer legal processes, monthly statements can reassure clients that their matter is progressing. 

• Collections. Cash flow is always critical for small and midsized firms, and that goes double in uncertain times. By doing a bit of collections work each month, instead of a major push once a year, you may collect more rapidly, and even collect more overall. If you frequently struggle with collections, consider implementing evergreen retainers and structuring engagements so you can withdraw if the retainer is not refilled on time. You can also make it more convenient for clients to pay by offering electronic payment options, including Venmo and PayPal Pay Later. 

• Trust accounting. Make sure your written procedures and cross-checks are up to date. If you accept electronic payments (which can help you collect more efficiently), make sure you choose a platform that handles the trust and operating accounts appropriately. 

• Workflows. The end of the year is a great time to take stock of the workflows that go along with every matter, like intake, conflict checking, and file opening. Getting these everyday processes dialed in prepares you to pivot on other issues.  

Tabs3 Cloud Tip: The curated library of reports in Tabs3 Billing can help you understand your case mix better and set fees that protect your bottom line. It also makes time entry, statement creation, collections, and trust accounting easier. Tabs3Pay allows you to accept electronic payments and also gives your clients the option to pay in installments, all while maintaining trust compliance and PCI-compliant, bank-grade security.

4. Your digital presence

It is a good idea to update your LinkedIn profile, your website, your bio, and other social media profiles at least annually. As you meet new people throughout the year, you want your web presence to reflect your current services and positioning.  

• Awards, rankings, and publications. Start by reviewing the awards, rankings, and publications currently listed. If your list is long, you may want to select a smaller grouping closely related to your current matter mix. Then add new, relevant honors not yet listed. 

• Matter examples. If your firm shares blurbs about matter resolutions on its website, prune existing examples and add new ones at least annually. You may also want to check for any updates to your state bar’s advertising rules. 

• Social proof. If appropriate to your practice area and depending on your state’s ethical rules, you might add testimonials to your website and/or social media. Make sure to review public comments on Yelp or similar sites regularly. 

Tabs3 Tips: Tabs3 Websites updates your website quarterly to keep content fresh.

5. Your law firm’s technology

Is your firm’s technology working for you? A solid, scalable tech stack can set you up for success when the landscape shifts. Reflecting on how things are going and scan for new tools that might benefit you.  

• Marketing. Tracking performance of your marketing tactics is critical, and year-end can be a good time to look at the larger picture. Tech tools can help you implement your marketing strategy in less time and track performance more easily.  

• Time entry and billing. Your technology should make it simpler for timekeepers to enter time contemporaneously and meet all time entry deadlines. If that is not happening, look for problems with your current tech in addition to workflow issues.  

• Trust accounting and financials. Managing trust accounting without appropriate technology creates unnecessary ethical risks. Check in with the accounting function to identify areas for improvement.  

• Practice management. Does your technology ease the workflow, or does it add more steps? Practice management software can automate repetitive tasks and centralize matter information so everyone is on the same page. 

Tabs3 Cloud Tip: Tabs3 Cloud has solutions for every aspect of law practice management. Tabs3 Websites can make your marketing efforts more effective. Tabs3 Billing and Tabs3 Financials can simplify time entry, billing, trust accounting, accounts payable, and general ledger. PracticeMaster and its add-on, Tabs3 CRM, can streamline your client journey from first contact to file closure.