For many lawyers, summer is a slow season offset by the return to a busy schedule after Labour Day.
You can take advantage of that downtime to tighten up your procedures, adopt new technologies, and generally overhaul your office before the pace picks up again. Here are some overhaul ideas from the experts, designed to make your busy office life easier to handle when it returns.
Priority One: Improve cash flow
It doesn’t matter how many hours your firm bills for, what counts is how many hours you get paid for, and how soon you get paid after billing.
“We don’t have Canadian statistics, but in the U.S., realization rates at many large and midsize firms have fallen below 85 per cent,” said Jordan Furlong, a principal with Edge International in Ottawa who blogs at Law21.ca. "That means these firms essentially collect less than 85 cents on every dollar they bill." Collections periods that can stretch out for a year or more threaten the lifeblood of the practice – cash flow.
Furlong urges law firms to tighten up their accounts receivable practices. “You need to get accurate invoices out to your clients quickly, on a standard 30-day term, and make sure that people pay on time,” he said. “Try offering a five per cent discount for early payment of the bill; say within 15 days. Some lawyers might object to that, but if you're losing 15 per cent anyway on bills that take you months to collect, why not trade that for five per cent on bills you can collect within weeks?"
Furlong also recommends making payment as easy as possible for the client. To this end, he urges more lawyers to bill electronically and offer credit-card or PayPal payment options. As well, render the final bill as soon as you can, when the value you've delivered is still fresh in the client's mind.
"Good billing practices are really just an extension of good client communications and overall relations," said Furlong. "Be prompt, be professional, be clear about the value you've given, and be clear about your assumption of immediate payment in full."
Investigate and/or implement new technology
“Lawyers are a conservative group of people,” observed Ben Hanuka, a partner in the Toronto legal practice Law Works. “So when it comes to moving them onto new technologies that can save time and money – like moving widely-used client forms onto the web and migrating office functions onto smartphones and tablets – they can be pretty resistant.”
This is why the summer break can be a good time to introduce new technology – assuming that you have already determined the best options, acquired the necessary hardware or software, and arranged for staff training.
“If you haven’t done the prep work, then don’t roll out new technology and other workflow improvements during summer,” Hanuka advised. “Instead, management should use that time to begin looking at such improvements themselves, and playing out a roadmap or making these changes during quiet periods in the future.”
Either way, change should be minimized during the firm’s busy season – because lawyers and staff will not have the brain space to learn something new.
Target waste!
There are so many ways that law firms – and indeed all organizations, private and public – waste resources. They include not having a common file-naming format for documents, so that different lawyers file duplicates under different names; over-editing the work of others on the basis of personal style rather than factual substance; and standing around at the photocopier for 15 minutes waiting for it to wake up. (This last piece of waste can be remedied by having IT reset the printer not to sleep during business hours.)
When it comes to eliminating waste, Montreal’s Gimbal Canada knows precisely what to do. Operated by the husband-and-wife lawyer team of David Skinner and Karen Dunn Skinner, Gimbal applies Lean Six Sigma's proven business improvement strategies to the sometimes chaotic world of legal practice. By reducing waste, lawyers can free up valuable human, financial and technological resources for those value-adding activities that clients need and want. The result is lawyers that are more productive, effective and efficient. And, if they're in private practice, more profitable.
“Summer is a perfect time to take a look at your business and ferret out the eight forms of waste, covered in the acronym DOWNTIME,” says David Skinner (DOWNTIME breaks down to Defects, Overproduction, Waiting & delays, Non-utilized talent, Transportation, Inventory, Motion, and Extra Processing.) “For instance, any work product that has to be redone due to errors or omissions is waste,” says Karen Dunn Skinner. “The same is true for documents that have to be refiled, and instructions to staff that aren’t clear and result in mistakes.”
There are so many other forms of waste that occur in law firms, there is hardly space to list them all. For example, making more copies and sending more emails than needed is a form of overproduction waste. Having senior partners review invoices because of flaws in the initial billable hours’ recording system is both a defect and non-utilized talent waste.
For firms that have the budget, Gimbal Canada can help identify, evaluate and eliminate – or at least reduce – waste. For firms who do this process themselves, a word of advice: "Once you’ve identified sources of waste, make sure you involve the right people in your improvement team,” says Karen Dunn Skinner. “You need the people who do the work every day helping to develop solutions.”
A quick time management tip
Summer is a great time to improve time management; both for you and your staff. The Law Society of Upper Canada has posted an extensive list of time management tips on its website. Worthwhile ideas include allocating specific times of the day to planning daily priorities, returning calls and answering e-mails/correspondence, managing docket entries and handling urgent matters.
“You may also wish to consult LAWPRO resources (such as the Practice PRO online coaching centre) for additional information that may be helpful,” said Susan Tonkin, the LSUC’s Communications Advisor.
James Careless is a freelance journalist