4 Tips to Optimize Your Law Firm for Potential Economic Downturn

The present uncertainty in the economy means that many businesses are finding ways to tighten up their resources to minimize and avoid any negative impacts of a potential economic downturn. The legal industry is no different. As many law firms do not have the same amount of resources as large corporations, they need to ensure that they minimize spending, cut out unnecessary overhead, and optimize the resources they currently have to protect their business. While the economic future might be uncertain, there are changes that law firm owners and partners can implement to prepare for whatever the market throws their way.

Leverage Law Firm Software to Focus on Billable Tasks

If law firm processes still operate manually, they miss out on thousands of dollars every single week. According to a recent study, 43% of law firm fee earners reported spending more than 35% of their time working on non-billable tasks. This is an alarming statistic at any time, but especially in the face of a potential economic slowdown. If attorneys and staff members cannot focus on the work that drives revenue for a firm and instead has to focus on manually providing case updates, time tracking, and collaborating, that firm is more likely to struggle in the face of economic disruptions.

The solution is legal automation supported by the right legal software that can digitize and automate your firm’s manual tasks. This frees up several hours to focus on billable work during standard business hours instead of having to work longer hours to compensate for this lost time. Additionally, as attorneys complete work faster, they can take on more cases in the same amount of time, helping to improve the law firm’s overall revenue and financial health. Key workflow automation to look for in a software solution includes:

• Matter creation and management

• Email and correspondence

• Document creation and management

• Time tracking

• Billing and invoicing

Enable Hybrid and Remote Work with Cloud-Based Legal Software

Another big expense for law firms is maintaining an office space with enough room for all their staff members and any clients or third parties who may need to come into the office. The cost to rent a space, pay utilities, and provide adequate in-office resources can create high overhead costs for law firms that impact where they could reinvest the revenue they earn. Establishing hybrid and remote work options is an easy way to combat this.

Reducing the space needed to accommodate staff helps law firms reduce how much they spend each month to cushion their operating expenses. Additionally, they can use that money to reinvest in marketing efforts to establish new business opportunities that will ultimately further protect the firm from financial struggles.

However, lowering overhead costs is not the only benefit of hybrid and remote work options. As seen over the past few years, many legal professionals already expect to be able to work remotely and are actively seeking job opportunities that offer that flexibility. This shift means that law firms cannot only reduce their current operating costs by implementing new work structures but also help ensure that they maintain their current people resources and improve staff retention.

Develop New Revenue Streams with The Latest Legal Technology

As law firms increase their staff’s flexibility, they can also open up new business opportunities in jurisdictions and areas of law they previously could not service. For example, suppose a New Jersey firm specializing in family law expands its recruitment efforts. In that case, they can bring on top lawyers across several other states and practice specialties that instantly create additional revenue streams without worrying about getting a bigger office space and incurring additional expenses for commuter benefits.

Of course, this cannot be achieved without the right legal software. All staff members will need access to real-time case information to view and provide updates, collaborate internally and externally, and track the work that has been done for accurate billing and invoicing regardless of where or how they work. Cloud-based software provides the accessibility and security needed to implement these new revenue streams without increasing their current resources.

Improve Transparency with Law Firm Staff Members

Ultimately, the best thing a law firm can do for its staff is to be transparent and create a culture of open dialogue. The prospect of potential financial instability or any cultural shifts can be daunting for any employee, so senior attorneys and partners in the practice need to provide adequate support for junior and support staff under them. Regular firm meetings and one-on-one check-ins where staff can discuss potential changes, develop a career plan, and set individual and group expectations help mitigate staff uncertainty.

As software automates tasks that would have been manual under different structures, the firm’s senior members have more time to dedicate to these check-ins and show their commitment to developing a transparent and supportive culture without asking them to make up this time by working after business hours.

Conclusion

While there is still uncertainty around how far off a potential economic slowdown can be, it is best practice to review law firm operations and find ways to reduce operational and overhead expenses while improving efficiency. Firms that attempt to make these shifts while maintaining manual processes will find it more difficult than firms that embrace the right legal cloud software solution to eliminate inefficiencies, reduce spending, and open up new revenue streams for enhanced cash flow. The LEAP legal practice management solution is the only fully integrated, cloud-based solution that provides law firms with everything they need to run a productive and profitable business from anywhere, at any time.

Interested in seeing how LEAP can help optimize your firm’s operations? Schedule a demo today!