Law Firm Financial Management Tips for Profitability

September 27, 2023 By Carole Poster Leave a Comment

Organizational chaos is a common theme in industries today, but it doesn’t have to be yours! While there may be hectic work days, there should never be hectic law firm financial management. If your firm’s finances have become unmanageable, client invoices are never sent out, trust funds are not separated, overspending is a norm, or there is no financial plan for your firm, you may find yourself in the hot seat!

Today, a plethora of technology, such as Bill4Time, helps attorneys prevent situations like this. If you did not know these law firm billing software organizations existed, you may want to consider their services to jump-start your firm’s financial livelihood.

In this blog, we’ll discuss the importance of maintaining financial management, what it looks like, and some strategies to get your firm on the right financial track.

What Is Law Firm Financial Management?

Law firm financial management refers to the systematic and strategic handling of a law firm’s financial resources and operations. This crucial discipline ensures your firm’s stability, growth, and overall success.

Managing finances within a law firm is a multifaceted discipline encompassing a spectrum of financial strategies tailored to the unique demands of legal practices. Accordingly, this intricate process involves a trio of elements: budgeting, billing, and financial planning.

Budgeting in law firms involves planning and allocating financial resources. It encompasses setting financial goals, estimating revenues, and projecting expenses. Budgeting helps your practice establish a clear financial roadmap for a specified period.
Billing is a critical component, directly impacting revenue generation. It involves accurately recording and invoicing clients for legal services provided.
Financial planning involves setting long-term financial goals and devising strategies. It includes assessing your firm’s financial health, identifying improvement areas, and planning contingencies.

Why Proper Law Firm Financial Management Is Important

Effective financial management is the bedrock of a thriving law firm. It would be best to recognize that proficient financial stewardship is the compass guiding your firm toward sustained success, safeguarding against potential hazards.

Sound financial management provides stability and growth opportunities. It allows for strategic resource allocation, enhancing your firm’s ability to invest in cutting-edge technology, talent acquisition, and practice area expansion. Proactively approaching your law firm’s financial management bolsters your competitiveness and creates client-centered quality service.

Conversely, neglecting financial management can lead to dangerous pitfalls. The consequences of financial negligence are stark! Without sound management, overspending, client payment issues, and unforeseen expenses can erode profitability. Ethical and regulatory breaches become more likely, tarnishing your firm’s reputation.

Your law firm’s financial management weighs heavily in favor of diligence. Knowing the outcomes enables you to make educated choices about managing your firm’s finances effectively, helps you maintain client trust and reputation, and adhere to ethical and legal standards.

Common Struggles and Errors in Law Firm Budgeting

Effective budgeting is the linchpin of financial stability within law firms, yet many encounter challenges and errors that can impede their financial health. Let’s delve into some of these issues and understand how they can jeopardize a firm’s stability.

Inadequate Expense Forecasting: Firms often struggle to accurately predict expenses, leading to budget shortfalls. Failure to account for unexpected costs, such as technology upgrades or litigation setbacks, can strain finances.
Overlooking Revenue Variability: Law firms frequently underestimate the variability of revenue streams. Over-reliance on a single client or practice area can result in financial instability if that source diminishes.
Ignoring Seasonal Trends: Many firms overlook the seasonal nature of legal work, causing uneven cash flow. Failure to plan for lean periods can lead to cash flow problems and hinder financial stability.
Unrealistic Growth Projections: Ambitious growth goals can strain resources if not aligned with your firm’s capacity. Expanding too rapidly can lead to overextension and financial difficulties.
Inadequate Technology Investment: Failing to invest in updated legal technology can hinder efficiency and client service. Inefficient processes can inflate costs and reduce profitability.

Regulations Around Law Firm Budgeting

Within the realm of legal finance management lives regulations surrounding law firm budgeting. Law firm budgeting is subject to an extensive web of legal regulations and industry standards that you must navigate with precision. Failure to comply with these mandates can have far-reaching consequences. Here are some regulations to consider.

Ethical standards require law firms to maintain accurate client trust accounts, also known as Interest on Lawyers’ Trust Accounts (IOLTA). This ensures that client funds are segregated and used solely for intended purposes.
Legal ethics emphasize transparent billing practices. Failure to provide clear and accurate billing statements can lead to disputes, damaged client relationships, and potential legal malpractice claims.
Industry standards dictate that clients must clearly define and understand fee agreements. Ambiguity or non-compliance with agreed-upon terms can lead to fee disputes and legal malpractice claims.
Some jurisdictions require law firms to submit financial reports. Non-compliance may trigger investigations and legal actions.

Non-compliance can result in professional sanctions, financial penalties, loss of reputation, and even legal consequences, making it crucial for you to navigate these regulations diligently.

Best Practices for Effective Law Firm Financial Management

As you seek to strengthen your firm’s legal financial management strategy, consider the best practices to navigate the complexities of financial management successfully. Here are some actionable tips, including the pivotal role of technology:

Strategic Budgeting: In order to prevent financial surprises, develop a comprehensive budget that aligns with the firm’s goals and accounts for all expenses, including those often overlooked.
Expense Monitoring: Regularly review expenses and identify areas where cost-saving measures can be applied without compromising service quality.
Diverse Revenue Streams: Diversify your client base and practice areas to reduce reliance on a single source of revenue, thus mitigating financial risks.
Billing Efficiency: Implement efficient billing processes using technology such as Bill4Time, ensuring accuracy, transparency, and timeliness in invoicing clients.
Client Trust Accounting: Scrupulously manage client trust accounts, adhering to ethical standards, and employ dedicated accounting software to automate and simplify trust accounting tasks.
Financial Technology: Leverage modern financial management tools and software to streamline tasks like financial reporting, analytics, and compliance monitoring.
Regular Financial Review: Conduct periodic financial reviews. Then, track progress, identify trends, and adjust strategies as needed.
Professional Development: Invest in staff training to enhance financial acumen throughout the firm.

What is Law Firm Billing Software?

With law firm financial management, the smoking gun relies on having the best software to implement the processes. Law firm billing software is a specialized tool designed to streamline and optimize the complex process of invoicing clients for legal services rendered. Likewise, it plays a pivotal role in supporting efficient financial management within legal practices.

For example, here are some core functionalities to have in your billing software:

Time and expense tracking
Customized invoicing
Automated billing
Client portals
Billing integration tools

When considering streamlining billing processes, choose a billing software such as Bill4Time that:

Reduces errors
Enhances efficiency
Increases compliance
Improves Client relations

In order to benefit your firm, your billing software should accelerate payment collection and enhance compliance with ethical regulatory billing standards. Streamlining processes support comprehensive financial reporting and analysis, enabling you to make informed decisions about your firm’s finances.

How Legal Payment Software Supports Financial Management at Law Firms

Legal payment software plays a pivotal role in law firms’ revenue collection and financial management strategies. Its multifaceted functionalities enhance economic efficiency and accuracy, eventually contributing to the firm’s financial health.

One key aspect is automated invoicing. Legal payment software automates the billing process, therefore, generating invoices promptly and accurately. This expedites revenue collection and reduces the risk of billing errors that can strain client relationships.

Plus, billing software solutions often offer secure payment processing options, ensuring clients can make payments conveniently and securely and enhance overall satisfaction. Another critical feature to have is real-time financial reporting. Legal payment software provides insights into your firm’s financial performance.

The right billing management software, such as Bill4Time, is indispensable for your firm’s financial management. Its ability to streamline revenue collection, secure payments, and offer real-time financial insights empowers your firm to maintain financial health and confidently make strategic decisions.

Steps to Effectively Manage Finances at Law Firms

Managing finances at your firm demands a strategic approach. In order to ensure fiscal stability and growth, follow this step-by-step guide that includes budget creation, expense tracking, revenue analysis, and financial reporting:

Comprehensive Budget Creation: Craft a comprehensive budget that covers all financial aspects of your firm, from day-to-day operational expenses to long-term investments.
Precise Expense Tracking: Implement a robust system for tracking expenses. After that, categorize and monitor expenditures closely to identify areas for cost-saving and resource optimization.
Thorough Revenue Analysis: Regularly scrutinize your revenue streams. Then, identify the most profitable practice areas or clients and assess the effectiveness of your billing and collection processes.
Strategic Financial Reporting: Develop a system for regular financial reporting. This provides insights into your firm’s financial health, enabling you to make data-driven decisions.
Continuous Evaluation and Adaptation: Above all, be adaptable. Continuously evaluate your financial strategies and adjust them as needed in response to changing market conditions or firm-specific factors.

By following these steps, your firm can precisely navigate the intricate terrain of financial management, ensuring financial stability and a strong foundation for growth in a competitive legal landscape.

Secure Your Firm’s Financial Future By Having A Law Firm Financial Management Plan

In short, proper law firm financial management is vital to your firm’s success. A well-crafted budget, a healthy understanding of your firm’s financial position, and the appropriate law firm billing software management like Bill4Time are crucial to ensure your firm has what it takes to go the distance! Embracing financial best practices can significantly boost profitability and drive sustained growth.

How to Effectively Manage Pro Bono Work Reporting

September 18, 2023 By Dan Bowman Leave a Comment

Pro bono work, from the Latin “for the public good,” refers to professional services provided at little to no cost. This work is voluntary and without payment.

The American Bar Association (ABA) encourages lawyers to provide free legal services to people in need. It can be inspiring yet challenging, particularly when it comes to tracking billable hours without actually billing, but reporting pro bono hours is important for ethical purposes.

In addition, you can’t evaluate the impact of pro bono efforts without tracking the time you devote to them. Keeping up with billable hours with a legal time tracking software like Bill4Time is important to manage pro bono reporting for accuracy and efficiency.

What Does Pro Bono Mean?

Pro bono work in the legal profession is the voluntary provision of legal services without a fee — or for a low fee. This work is important in the legal profession to provide equal access to legal services and reinforce lawyers’ commitment to justice, equality, and social responsibility. It’s not about financial gain, but showcasing a lawyer’s dedication to serving the needs of the community.

At its core, pro bono work is altruistic. Lawyers are willing to leverage their legal training and expertise to assist people or organizations with legal problems but limited means to access the legal services they need.

By offering your time and skills pro bono, you can bridge the gap in justice and ensure that vulnerable members of society have a voice and can seek justice. This goes to the ethical standards of the legal profession and improves fairness in society as a whole.

The Importance of Pro Bono Work

Pro bono work is incredibly important for promoting social responsibility and upholding the ethical standards of the legal profession. It’s a powerful tool for lawyers to actively engage with their communities and address societal issues, including inequity.

When lawyers offer legal expertise free of charge to people who need it, they demonstrate a commitment to the law and social justice, not profit, and reinforce their position as guardians of the rule of law.

Pro bono work also contributes to the ethical standards of the legal industry by promoting equal access to justice that isn’t contingent on someone’s financial means. This ensures that marginalized individuals or communities and nonprofit organizations have a voice in the legal system. It also cultivates a culture of empathy and compassion.

Why Do Lawyers Do Pro Bono Work?

Pro bono work is important because there’s a significant need for it. The system of law depends on equal access to its privileges and protection. Those without means can’t access competent legal representation, putting them at a significant disadvantage with their legal issues.

The ABA doesn’t mandate pro bono work, but it is strongly encouraged. Under Model Rule 6.1, attorneys should aspire to provide at least 50 hours of pro bono services per year, but they’re welcome to do more. Those 50 hours are only a small portion of a lawyer’s total billable hours, but they can be life-altering for the pro bono clients.

The benefits you gain are also remarkable, including advancing your skill set, challenging yourself, and building better teamwork. Pro bono work brings good publicity for a firm as well, which can bring in new clients and attract talent.

For young lawyers, pro bono work is a good opportunity to lead or argue a case that may not be available with paying clients. This is an important part of professional development, especially for young lawyers deciding how to progress in their careers.

Requirements for Pro Bono Work

Under Model Rule 6.1, lawyers should aspire to 50 hours of pro bono publico legal services per year. The majority of those 50 hours should be without a fee — or expectation of a fee — to a person of limited means or charitable, religious, civic, community, governmental, and educational organizations in matters that address the needs of persons of limited means.

Despite the ABA’s recommendation, individual state bar associations may decide to choose a higher or lower number of hours of pro bono service or a percentage of the lawyer’s professional time. Lawyers may log more or less time from year to year, but the recommendation considers the average hours each year over the course of their career.

Lawyers are permitted to do pro bono work for civil matters or in criminal matters for which there is no government obligation to provide funds for legal representation.

While doing pro bono work, lawyers are expected to behave as they would with any other client, meaning that they must have the necessary skills and competency to handle the case. Lawyers should not expect or receive compensation for their work.

The same ethical standards and professional conduct guidelines apply to pro bono cases as any other cases. They are expected to act in the best interests of the pro bono clients, just like they would for paying clients.

Do Lawyers Still Track Time for Pro Bono Work?

One of the common misconceptions with pro bono work is that it doesn’t require time tracking. While it’s inherently a community service and provided without compensation, it’s important to recognize that time tracking is essential to understanding your time commitment and impact.

Lawyers who engage in pro bono activities commit substantial hours to their cases. Tracking the time ensures accountability and aids in assessing the impact of pro bono efforts by providing key data.

In addition, some organizations or jurisdictions may require reporting of pro bono hours for ethical purposes. Though there may not be any financial transactions, time tracking is a fundamental practice in pro bono work, underscoring its professionalism and dedication to achieving positive social change.

No matter the size of the firm, pro bono case time should always be tracked, as well as the costs incurred. Some law firms may require their associates and paralegals track their pro bono hours and expenses. Tracking time and comparing it to similar cases can be helpful to evaluate efficiency and ensure that lawyers are providing reliable assistance to pro bono clients.

How Is Pro Bono Work Reported?

Like any billable time, reporting pro bono time involves a process of documenting and quantifying the hours spent on legal case work and the services that were provided to pro bono clients. It’s common for lawyers to be expected to maintain detailed records of their case work, and pro bono activities are no different. Applicable hours should include the date, type of service, and time spent in the appropriate increments.

Having detailed reports helps with reporting pro bono efforts to any relevant organizations, such as bar associations, legal organizations, or employers. Lawyers and legal staff may need to report their own contributions to managing partners as well.

Legal time tracking software like Bill4Time simplifies the reporting process and automates the organization of pro bono hours. With a lower administrative burden on lawyers and legal staff, more time can be spent on the pro bono case or other cases.

With comprehensive software, you can generate detailed reports of pro bono contributions and any associated expenses. This keeps the process streamlined, transparent, and organized.

The Role of Legal Time Tracking Software

Legal time tracking software plays a key role in optimizing pro bono work for your law firm. It not only enhances efficiency in time tracking and reporting but promotes accountability and accuracy for your pro bono efforts.

Bill4Time offers a comprehensive solution tailored to the needs of legal professionals. Time tracking is automated and streamlined to reduce manual workloads and ensure precise, error-free records of pro bono hours. All pro bono time can be gathered and documented quickly and easily for any reporting requirements.

Tips for Effective Pro Bono Reporting

Here are some tips to improve your pro bono reporting:

Prioritize accuracy in recording pro bono hours and tasks with a reliable legal time tracking software.
Establish a routine for entering pro bono hours in real time to prevent errors and improve accuracy.
Document the nature of the legal services provided, the client, and the outcomes, including any legal research, client consultations, court appearances, or document drafting.
Collaborate with legal support staff to ensure all efforts are documented.

Effectively Manage Pro Bono Work with Bill4Time

Working pro bono cases is a rewarding part of the legal profession, but there’s work involved in tracking pro bono time and services rendered to understand the impact of your pro bono efforts. Bill4Time simplifies this process with accurate tools that streamlines timekeeping and reporting, reduces administrative burden, and showcases tangible results.

Schedule a demo with Bill4Time today to see how it can help transform your law firm’s time tracking and keep track of pro bono work.

Law Firm Attorney Roles: Are You a Finder, Minder, Binder or Grinder?

September 15, 2023 By Bill4Time Staff 3 Comments

Does your legal career give you the fulfillment and satisfaction you want? The answer for many attorneys is no, according to a study published in The Washington Post. The unhappy attorney is a common sentiment. Do law firm roles have something to do with the ranking?

Why Are Lawyers Unhappy?

The unsatisfying answer is, it depends.

A whopping 56% of lawyers are frustrated with their job, according to studies noted in Above the Law. There are lots of reasons but there’s something lurking at the bottom of each of the many problems listed, can you see it?

It’s purpose.

The hidden assumption that’s made is this: There’s something wrong with the job. The experience isn’t quite what many attorneys imagined coming in.

What if it isn’t the job?

What if your job would be instantly more enjoyable with a simple switch? A change in your role or function that’s designed to align with who you are?

There are a few different roles for attorneys within a law firm: finders, binders, minders, and grinders. These roles have a significant impact on the progress of your career, but they also have a significant impact on your firm’s performance. Let’s dive into them.

Why Law Firm Roles Should Align with Personality

It shapes your income.

The research on this is clear. When an employee’s personality traits match the traits that are ideal for their job, they earn more. When there’s a personality/jobs mismatch, motivation and job performance suffers.

Whether you’re hiring for a role or actively looking for one, make sure the candidate traits match with the position for the best hiring results.

Personality-job fit theory states that your employee’s personality traits (i.e. the big five personality traits) determine their adaptability within your firm. This impacts your firm’s performance significantly, either positively or negatively over time.

Additionally, this has a large impact on individual attorneys. Many attorneys aren’t fulfilling the roles that best match their personality. Firms are struggling with a widespread problem.

A role mismatch.

Attorneys generally fall into four distinct roles.

Finders: The Recruiters

Finders are rainmakers. They bring new clients, business and revenue to a firm. Good finders are exceptionally rare which makes them incredibly valuable to a firm. When times are good, finders often make more. When times are bad, finders often make dramatically less money than their peers.

Binders: The Connectors

These attorneys are sophisticated networkers, able to connect with, build and maintain deep relationships with important and powerful people. They receive and provide others with important introductions.

Minders: The Managers

Minders are bureaucrats. Oftentimes they’re on executive committees or they’re the managing partner responsible for administrative tasks. They manage attorneys, paralegals and support teams. In short, they run law firms. They’re efficient, precise and capable of managing a firm.

Grinders: The Workhorses

The majority of attorneys are hired to do one thing: work on the matters given to them. These attorneys are expected to (a.) do as much (billable) work as possible (b.) produce high-quality work as quickly as possible. Grinders aren’t hired to be mentors, rainmakers or managers. They’re workhorses, the ones with their sights set on goals and how to accomplish them quickly.

With these roles in mind, attorney/firm dissatisfaction often comes from a confusion about an attorney’s expected role.

New associates (10 years of experience or less) are often hired to be grinders; to complete the massive amount of work a firm needs done. However, these young attorneys want to make an impact as a finder, binder or minder. Naturally, they’re dissatisfied.
An attorney is made partner with the implicit and unspoken expectation that he behaves as a finder. His firm expects him to bring in a significant amount of new business for the firm. However, this newly minted partner has the mindset of a grinder. He put his head to the grindstone and worked hard, but gets unexpectedly replaced due to poor performance.
A young associate has been working hard for the last three years. She works 12- to 14-hour days, rarely sees her family and is in the office seven days a week. She’s struggling with burn out, depression and severe job dissatisfaction. She’s questioning whether she’d like to be an attorney at all anymore.
A managing partner job is to function as a finder, to bring in new business. She’s also expected to produce a large volume of billable work for the firm. She’s on several committees, handles a variety of administrative and business development tasks but is not compensated for these “extras.” She has been hired to be a minder but is expected to be a finder and a grinder.

The firm and its employees have conflicting expectations. The job isn’t necessarily the problem (though it still could be).

Expectations are the problem.

How Law Firm Roles Could Solve a Widespread Problem

It’s easy enough to suggest that attorneys pursue the roles they desire, but is that impossible if you’re never selected for that role?

Not so much.

You’re in control. You can choose your role, even when placed in a less than desirable role.

How do you choose the role you want when you’re placed in the wrong role? There are lots of ways to go about this.

You can:

Produce exceptional results for the role you want and the role you have. If you’re hired to be a grinder but you’d like to be a binder, start acting like one. Excel as a grinder, but find a safe avenue that enables you to build a strong reputation as a binder.
Get some experience as a binder then, find an organization that will hire you as a binder.
If they’re open to it, negotiate with firm management for a role change. Quantify the value you’ve provided to the firm as a binder, using metrics that matter to firm leadership (e.g. revenue saved, client relationships preserved, matters won, etc.). Do it with several alternate options lined up in case your firm rejects your proposal.
Pursue your desired role in an alternate capacity (e.g. freelance, starting a new business or firm, etc.)

It isn’t easy and it certainly isn’t simple. But it is doable. It’s something you can use to establish yourself in the role that you want. And it’s dependent on one simple concept.

Add value.

Not only in your current role, but add more value in the role you’d like to transition to. Some firms (e.g. BigLaw) aren’t flexible in this area so you may have to make a decision. This makes negotiation with firms (yours or another) a straightforward and quantifiable process.

Your Law Firm Role Should Align with Your Personality

It can align with your personality.

The research is clear. When an employee’s personality traits match their law firm role, everybody wins. Employees earn more money, firms get outstanding results and performance skyrockets.

Who are you?

Most attorneys don’t know. Most firms don’t know. You’re part of an exclusive minority. You understand the roles, the roles as they exist in your firm. You have the information you need to eliminate a major slice of career unhappiness.

Once again, it isn’t easy and it isn’t simple, but it can be done. Especially if it means you come home happy.

Identify your current role. Identify your future role, the law firm role that you want. With a clear idea of your current situation and a solid plan to follow, career happiness is right at your fingertips.

Editor’s Note: First published in February 2019. Last update: September 2023.

How to Start a Law Firm Straight Out of Law School

September 13, 2023 By Bill4Time Staff Leave a Comment

Whether you’re looking at law schools, currently studying law, or mere weeks from graduation, you might have wondered how to start a law firm right after law school.

There are approximately 1.33 million people actively practicing law, according to the American Bar Association. Of these, roughly 26% of those attorneys (345,800) are solo practitioners, according to their 2020 study.

The Bureau of Labor Statistics projects a faster-than-average 8% growth for lawyers — that’s nearly 62,400 jobs from 2022-2023. They also project an additional 39,100 jobs added per year over the decade, resulting from career changes or retirement.

While the outlook looks promising to law school graduates, some might prefer to start their own practices and work for themselves.

Here’s how you can do it.

How to Start a Law Firm After Law School

If you’re starting your own law firm straight out of law school you’ll need to choose your practice area. Believe it or not, this is an incredible opportunity. You get the chance to chart the course of your career!

Here are a few simple guidelines to follow.

Choose a practice area that interests you.

Interest determines attention. Attention, specifically the level of attention exerted, determines the quality and longevity of your work overall. The obvious point here is this: it’s much harder to do a good job when you hate your job.

Verify that there’s an appropriate level of supply and demand.

In the 1990s, market conditions forced most law school students to choose litigation as a practice area instead of corporate or transactional law. Be sure your ideal area of law has ample space for your law firm, and if it doesn’t, follow best practices to get your firm’s name out there.

Make sure you have the required skill sets.

You’ll want to analyze your personality and temperament, academic and/or professional credentials (i.e. a patent attorney with an engineering undergraduate degree) ahead of time before settling on a particular practice area.

Here are a few additional primers on choosing the right practice area(s).

How to Set Up a New Law Firm

Once you’ve determined the name, legal structure, and focus of your law firm you’ll need to create a firm foundation. This is the core component most attorneys miss. Your new firm needs structure, in the form of systems and procedures, to survive.

These are the fundamental components you’ll need (in order of importance) to build a successful legal practice.

Financial Management

You’ll need positive cash flow and strict financial controls governing how money is handled in your firm, who has access to what and when. You’ll need concise, actionable reports delivered daily, weekly, monthly, quarterly and annually.

Communications Management

This is a catchall term that describes business development, sales and marketing. Communication is how your firm attracts new leads and clients. Poor communication = a cash poor legal practice. Make sure you have an all-in-one law firm management software that allows your team to communicate seamlessly as you grow your practice.

Legal Management

Your area of expertise. This area covers office lease or purchase contracts, intellectual property protection and agreements, loan documentation, compliance issues and more.

Systems Management

Systems run businesses. Systems codify the education and information inside your head. It gives future employees, freelancers and support teams the instructions they’ll need to help you grow, manage and maintain your law firm. Quality and performance management is impossible without systems management. Law firm management software like Bill4Time makes starting and running your own law firm easy.

Service Management

Your service is what your customers pay for. It seems important, and it is. But it’s the least important part of your business. Most solo and small firm practitioners focus their attention exclusively on their service. Good service is unsustainable/impossible without the first four components mentioned above.

Here’s the thing about these components.

Setting up these components properly is much easier when you’re working with real, money-in-hand clients. Let’s focus our attention there first.

How to Create a Plan for Landing Clients

Attorneys with deep pockets tend to throw money at the problem which, as you might expect, doesn’t work all that well. Newly established firms rely on the usual channels – advertising, marketing, speaking, etc. These channels work best when they’re part of a cohesive strategy. When they’re not, they tend to provide limited results.

However — when they’re focused on the right strategy — these channels can help build a new law firm. In fact, business development is easy when focus is in the right place. Building your law firm’s platform will create a space in the market for your brand (in law firm marketing terms).

Platform building.

As mentioned previously, there are two main ways to drive prospective client traffic to your firm.

Traffic from existing platforms. These are people, organizations, influencers and tangential sources who have already built a platform of their own. Their audience is hungry, desperate for the value you provide. Feed their audience and their platform becomes yours.
Traffic from a platform you build. You build, manage and maintain your own platform from scratch via your very own marketing campaigns. You create business development content that attracts and segments visitors. You build everything around your audience.

Business Strategies for New Law Firms

Here are some business development strategies you can use to create a thriving platform for your young law firm. These strategies rely on two things: (1) traffic from existing platforms and (2) influencers, powerful kingmakers with influence and reach.

Strategy #1: Writing

This is the easiest way to begin the conversation with clients. It’s writing for other publications, influencers who need content. The platforms you turn to on a regular basis for education? They need your knowledge and expertise.

These publications should meet 3 criteria.

Publications with authority. The ABA Journal, National Law Journal and The Hill are all authoritative, attorney-focused publications. The Wall Street Journal, New York Times, Washington Post, CNN, Time, and The Harvard Business Review are all consumer-focused publications. Writing for these authoritative publications boosts your authority and prestige, providing you with a greater amount of influence and reach.
Publications with traffic. Publications like The American Lawyer, Law Technology Today and Trial Magazine are attorney-focused publications. Business Insider, Entrepreneur Magazine, Fast Company, and other high traffic sites are consumer focused.
Publications with opportunity. These are specialty publications that provide you with opportunities to win new business. In-house counsel publications such as ACC Docket and International In-house Counsel Journal are attorney-focused examples. Key partnerships with any of the publications listed above (and those not listed) may also provide significant opportunity.

These broad examples are helpful cues you can use to get things started.

Strategy #2: Interviewing

Radio shows, podcasts, and discussion panels are always on the lookout for credible experts (you). They need important, educational content to feed their audiences. If you’re going to be a guest on these radio shows, podcasts and discussion panels, what might that look like?

Divorce attorneys share legal, marriage and relationship advice, helping clients to protect their assets
Business attorneys share a never-ending stream of advice for startups and small businesses
Tax attorneys share entertaining investment, tax and legal advice with homeowners and house hunters

Look for the overlap of their topic/focus and your expertise.

You can peruse the list of radio stations and podcasts in the United States. Once you have a list of targets, work on creating a pitch, follow-up offer, product and intake process.

Strategy #3: Teaching

This strategy is one of the best ways to attract a significant amount of attention from prospective clients. Here’s how it works. You partner up with influencers to teach an audience. It could be their audience, an influencer that has signed on to teach, or a cold audience.

The right content matters most. You’ll need to provide influencers with in-depth, long-form content that provides information about high-traffic topic areas.

What does this look like?

A real estate attorney teams up with real estate developer groups and investor clubs
Business/startup attorneys could team up with entrepreneur clubs, chamber of commerce, rotary clubs and networking groups
Intellectual property attorneys could reach out to software directories like Capterra, G2 and GetApp

You’re looking for tangential organizations (or people) with a large pool of potential clients you can serve. Next, you’ll want to provide them with educational tools and resources they can use to serve their audience. Finally, you’ll want to make their audience yours by creating lead magnets.

What’s a lead magnet?

A lead magnet can be a free or paid product, tool, service, quiz or app. It’s a helpful resource that meets the following criteria:

It shows clients you understand their specific problem
Shows you know why it’s a problem and what the consequences of ignoring the problem will be
Demonstrates your ability to solve that problem, permanently
Gently shows clients their inability to solve their problem
Gives clients important next steps to contact you/request help

Lead magnets attract attention, create interest, stoked desire and motivate action. They’re helpful tools you can use to quickly build trust, rapport and consensus with prospective clients.

Strategy #4: Public Speaking via Influencers

Public speaking may make some cower, but here are some great examples of lawyers discussing their expertise on large channels:

To become an effective public speaker you’ll need to build relationships that are contingent on value.

What’s the first step of creating value?

The pitch.

You identify a problem, need or desire your influencer needs to be solved. Maybe they need more educational content for their audience, maybe they’re looking for experts to share their insights on a popular or trending topic. Make it your goal to identify and solve their problems.

Send them an email with your pitch. Here’s an example:

[Hi Decision maker],

I spoke with [insert name], your content director, and [he/she/they] mentioned you were looking for experts to speak at your upcoming conference. [He/She/They] mentioned you were looking for attorneys who can discuss [topic].

Here are a few ideas:

Idea #1

Idea #2

Idea #3

I’m a partner with [Firm], and [topic] is one of my practice areas/specialties. Would you be interested in a brief outline?

Let me know,

[Your Name | Signature]

It’s concise, focused and all about them.

Remember the steps mentioned in strategy three? You can use the same exact process for public speaking or you can use it to identify areas where you can add value. Once you’re finished speaking, provide listeners with a follow-up offer (consultation, assessment, lead magnet, etc.) at the end of your speech.

Capture their contact info and follow-up where appropriate.

Strategy #5: Take Care of Your Influencers and Their Audience

It’s a hidden business development strategy most attorneys ignore.

People are sensitive.

It’s a wise idea to assume that your influencers, clients, peers and coworkers are all sensitive to the same things. We’re all a bit sensitive to:

Insults
Threats
Bullying
Abuse
Humiliation

It’s not as easy to avoid making these mistakes as you might think.

Here are some straightforward ways to avoid making that mistake:

Don’t ghost or ignore people.

Ignoring texts, emails and instant messages harms the relationship. Silence is the worst insult possible. It trains those around you to fill in the blanks. Which of course means they’ll assume the worst.

Don’t assert your power over others.

At any given time, and in any given conversation, one person will always be more successful than another. Casually mentioning the large bonus check you received stings when the associate you’re talking to didn’t get one.

Pay your debts.

Most people collect relational and social stamps. They do good with the expectation of return. What’s worse, the value of the good deed goes up in the giver’s mind and down in the recipient’s. Consistently expressing gratitude for the things others have done for you. It’s a simple and easy way to avoid resentment due to social and relational debts.

Don’t waste their time.

It’s important to zealously guard your time. It’s just as important to guard the time of those around you. Simply saying “I don’t want to waste your time” in a conversation is enough to let people know you value them personally and you value their time. This blends into being on time or early to meetings, respecting that they have a schedule to maintain as well.

Don’t think they’re okay with it, just because you are.

Your values aren’t their values. People have their own way of doing things. Imagine that an associate decided to borrow several items from your desk without asking because they’d be okay with it. Then, when confronted, they mentioned it’s not a big deal and told you to let it go, completely disrespecting your boundaries. That’s how many people feel with this assumption.

It really comes down to this:

Know your audience.

If you’re a junior partner, be aware of the fact that other people at the firm may not have had similar experiences to yours. They may act differently than you would in certain situations.

There’s a simple rule you can follow to take care of your audience.

Build them up.

That’s pretty straightforward, right? This doesn’t mean you morph into a teacher’s pet. It also doesn’t mean that you accept abusive or dysfunctional behavior.

Acknowledge their value, as a human being, as equal to your own.

Some people are driven by agreeableness and social pleasantries. Others loathe chit chat preferring that you “get to the point.”

Meet people where they are.

How to Start a Law Firm with Law Firm Management Software

With all the topics covered, did you catch the secret to launching a successful law firm?

It’s serving others.

Intense education, the number of graduates vying for jobs, competitive opportunities — it all stops mattering when you focus on serving others. It’s the secret to high-performance business development — and nearly unmatched when paired with the proper law firm management software to help your firm succeed.

This blog was originally published in August 2018. Recent update: September 2023.

Navigating Multi-State Practice: A Guide to Practicing Law in Any State

September 13, 2023 By Carole Poster Leave a Comment

Our technologically advanced world has changed how we do business. We were once separated from others by geographic boundaries. Those rigid boundary lines have become fluid, opening the door to opportunities lost in geographic seclusion. One new phenomenon technology afforded us, known as “working remotely,” provides an alternative to office work. You can be anywhere and perform work if you have access to Wi-Fi, but can lawyers practice in any state?

The impact of technology and remote work in the legal field has created a new horizon ripe with innovation. As a result, today’s legal landscape has made law practice across multiple states easier. This open door to new opportunities can broaden the professional horizons of any ambitious practicing attorney.

Multi-state practice, also known as “reciprocity” or “admission pro hac vice,” complexities and regulations, lawyers desire to take on its challenge. Before you begin a multi-state practice, you must understand the steps and considerations for multi-state practice.

These considerations include licensing requirements, ethical obligations, Continuing Learning Education (CLE), legal software, case management tools, client relations, and local Rules and Court Procedures.

Can Lawyers Practice in Any State?

No, not without proper legal licensure. However, reciprocity is an alternative often regarded as the most effective means of relocating to another state. Reciprocity offers a seamless transition into a new jurisdiction. Reciprocity creates its primary advantage by giving you the option to attain full-fledged membership in the bar of most states you move into.

While being positioned as a multi-state legal practitioner is easier due to the expansive technological boom, the most significant barrier for aspiring lawyers is the varying State-legislated bar exams. Each State crafts the Bar Exam to meet their jurisdictional needs.

Why Would a Lawyer Practice in Multiple States?

Access to a broader client base is one of the most significant reasons lawyers desire to practice in multiple jurisdictions. In addition, practicing across a general geographic location provides the opportunity to handle more diverse legal issues.

Another equally important consideration would be whether you live in a city that straddles state borders. Attorneys in cities such as Kansas City or states such as New Jersey, Connecticut, Rhode Island, and Vermont would benefit from being licensed in multiple states. To adequately provide equal justice, you must be licensed to practice within all of the city, not part of it.

Do Multi-State Lawyers Need a License for Every State?

Yes. Lawmakers have agreed there needs to be uniformity in legal licensing compliance across the States. One attempt to address this hurdle was the creation of the Uniform Bar Exam (UBE).

The UBE is a standardized variant of the Bar Exam, streamlining the process of transitioning your legal practice across state boundaries. Each state possesses the autonomy to define a passing score and how long your UBE score remains transferrable. So, check the state you are considering licensing in to ensure you meet their regulations.

Here are some tips to consider:

You must clarify with each state’s Bar Association whether you are required to pass their unique Bar Exam, UBE, or can practice under reciprocity.
To gain temporary practice permission in a jurisdiction representation via “pro hac vice” is the best option. Pro hac vice is utilized in specific cases and is subject to Court approval.
It is essential to stay current with the latest licensing regulations and carefully research the requirements of each state you aim to practice in. These requirements vary significantly and will continue to evolve as law practice evolves.

Benefits of Practicing in Multiple States

Practicing law in multiple states offers several notable benefits for legal professionals. Here are some key advantages:

Expanding into multiple states broadens your potential client base. You can tap into diverse markets and industries, potentially increasing your client roster and revenue streams.
Different states have distinct laws and regulations. Practicing in multiple jurisdictions compels you to stay current on various legal codes, which can sharpen your legal knowledge and expertise.
The challenges of multi-state practice can promote personal and professional growth. Adapting to diverse legal landscapes fosters problem-solving skills, adaptability, and resilience.
Practicing in multiple states exposes you to various legal issues and cases. This diversity of experience can make you a more versatile and well-rounded attorney.

Ethics of Practicing Law Multi-State

The ethical aspects of multi-state practice revolve around maintaining the highest standards of professionalism, complying with each state’s rules of professional conduct, and upholding the attorney’s duty to their clients.

Ethical standards for law practice are influenced by the Model Rules enacted by the American Bar Association (ABA), accordingly. The ABA addressed the ethical standards for practicing across state lines in their Formal Opinion 504. It expressly states, “when a lawyer practices the law of more than one jurisdiction, choice-of-law questions arise concerning which jurisdiction’s ethics rules the lawyer must follow. Model Rule 8.5 provides that…the lawyer must comply with the ethics rules of the jurisdiction in which the tribunal sits, unless otherwise provided.”

6 Steps to Practice in Multiple States

Before jumping in, make a plan. By mastering law in different jurisdictions, you can seize opportunities, broaden your client base, and enhance your legal career. Our step-by-step guide equips you with the knowledge and strategies to succeed in multi-state practice.

To practice in multiple states, start by researching and selecting your target states.
When aiming to practice in multiple states, assess reciprocity agreements and admission criteria.
Gather the required documents and information as part of the process.
While this can be exciting, don’t get lost in the paperwork. Ensure you select, prepare, and submit the correct admission applications as you set yourself up to practice across multiple states,.
Be careful to meet any extra requirements for licensure, exams, or interviews.
As you continue your practice in multiple states, complete any required CLEs, maintain licenses, and stay compliant by keeping diligent records.

How Technology Supports Multi-State Lawyers

Technology plays a pivotal role in streamlining and enhancing multi-state practice. Technology enables lawyers to work remotely, which is especially valuable. Video conferencing, secure communication platforms, and cloud-based collaboration tools facilitate seamless communication with clients, colleagues, and courts across various states.

Bill4Time offers software and resources that streamline legal research, document management, and communication, which can help maintain a successful multi-state firm.

Specialized case management software allows you to manage your workload across multiple states. These tools enable document management, time tracking, billing and invoicing, and client communication in a centralized and organized manner.

Expand Your Practice

Whether you’re interested in taking on cases in neighboring states or establishing a nationwide practice, embrace the possibilities that come with a well-rounded understanding of multi-state practice and elevate your legal career to new heights.

There are many benefits to practicing across multiple states; however, there is the potential of learning numerous state-specific laws, having to pass the bar again, and hard work.

Above all else, maintaining ethical integrity and adhering to renewal regulations is critical to continue practicing across state boundaries. Many software platforms do the work, so you are free to do what you love.

Now that you have a strong understanding of what it takes to run a multi-state practice, consider Bill4Time as an effective solution for managing your virtual firm needs. Its document, practice, and case management software will assist in breaking down geographical barriers, enhance communication, streamline administrative tasks, and provide abundant legal resources, giving you a competitive edge in your practice.

Schedule a demo with Bill4Time today to show you how we can help you go the distance!

Why Law Firms Need Role-Based Access Control

September 12, 2023 By Nina Lee Leave a Comment

Law firms are ethically obligated to protect their clients’ data. Any information a client shares with their attorney should remain confidential. However, a cybersecurity attack can compromise the client’s private information, allowing hackers to leverage this data for financial gain. Role-based access control can help avoid the fallout of a worst-case scenario situation.

A cybersecurity incident can harm your clients’ reputations and finances and negatively affect your firm. Clients can pursue a legal malpractice lawsuit against you, and you could lose cases once prospective clients learn about the data breach.

Your law firm can avoid these negative consequences by implementing a role-based access control policy so it can protect the valuable information clients trust you to keep private.

Data Security for Law Firms

The American Bar Association (ABA) sets rules law firms must follow when it comes to privacy and security standards. For example, according to Rule 1.6:

Lawyers cannot give away a client’s information without the client’s informed consent.
An attorney can reveal a client’s information only if the lawyer believes it is reasonably necessary, such as to prevent bodily harm, stop the client from committing a crime, or obstruct financial injury.
Lawyers must make efforts to prevent unapproved access to client information.

The ABA’s Formal Opinion 483 outlines how law firms should handle data security breaches. Per the ABA, lawyers must:

Take security measures to protect the client, especially when it comes to technology
Regularly monitor their plans for minimizing the fallout if a cybersecurity attack occurs
Stop a data breach and prevent a hacker from further releasing client data
Inform clients of a data breach as soon as possible

Certain sensitive client information may require more than the standard level of security. Because lawyers are often responsible for handling money that belongs to clients, law firms should take extra precautions to protect their clients’ financial interests against cyber risks. If a hacker gains access to your firm’s Interest on Lawyers’ Trust Accounts (IOLTA), you and your client may be in financial trouble.

Taking steps to protect your clients’ information, such as by setting up role-based user access, can give your team peace of mind that secure information is protected.

What Is Role-Based Access Control?

Role-based access control limits the access certain team members have to information and system functions based on their role within the firm. Essentially, role-based access control helps keep data secure by ensuring employees can access only the information they need to perform their jobs.

Your firm can delegate access to information based on a few factors, including:

Authority. Lower-level employees may not need access to the same information as your firm’s executives.
Responsibility. Employees only need to access information related to their position’s duties.
Job competency. Employees whose jobs require more technical skills may need to access certain information.

Your firm can also decide which role each employee should have. Many organizations assign roles like the following:

Administrator: An administrator generally has high-level access to information. Administrator roles are usually assigned to executive employees or members of your firm that need access to certain data to adequately perform their jobs. They can create and edit documents and create and add new users.
End user: These users typically can access information that administrators deem necessary. They may be able to view certain documents but do not have permission to edit or share them.

By implementing role-based access control, you can decide what permissions each user has. For law firms, access management has several uses, including:

Mitigating Cybersecurity Concerns

If your law firm has several employees, each user is likely working on a different device. If your firm’s employees work remotely, limiting certain users’ access to data can help prevent a data breach.

Many firms also use cloud-based software, allowing their employees to access data, software, and servers using the internet. While this is often beneficial in terms of cost and convenience, allowing users to access information anytime, anywhere presents security concerns. Restricting user access to data stored in the cloud can minimize the risk of compromising sensitive information.

Abiding by the ABA’s Rules

As previously mentioned, the ABA requires lawyers to prevent unauthorized access to client information. If your firm allows only high-level employees access to sensitive information, it adheres to the ABA’s rules.

Ensuring Law Firm Productivity

Allowing your firm’s members to access only the information that is essential to their role can benefit your organization’s productivity. Overall, it helps ensure your employees stay on task and focus on their position’s goals.

The Importance of Role-Based Access Control for Law Firms

Regularly monitoring access rights is the best practice for ongoing security. If an employee’s role within your firm changes, or an employee is terminated, their access should be adjusted. Generally, when an employee is terminated or leaves your firm, you should prohibit them from accessing any of your firm’s data. Ensuring you’re aware of all users who can view sensitive information can help your firm avoid a data breach.

A routine security audit may also benefit your law firm. This might include:

Checking in on database permissions to ensure the right users have access to the information they need.
Reminding your employees to remain alert when it comes to common potential threats, such as phishing attacks, suspicious links, and spam emails.
Making sure your IT department has a plan in case a cyber attack occurs.
Running tests to identify potential weak spots in your law firm’s data security.

Role-based access control also ensures your firm is not vulnerable to legal liability or disciplinary action from the ABA. You can protect your clients and law firm by safeguarding the sensitive data entrusted with.

Legal technology can make the process of routinely monitoring user access levels easier. For instance, Bill4Time’s data security software can help your firm remain productive and keeps your data protected by:

Offering 24/7 service
Using data centers to ensure natural disasters and local outages do not compromise your firm’s data or productivity
Providing your firm with options to customize user access and give temporary access to contracted employees
Automatically tracking user logins

Using legal technology to protect your firm’s sensitive information gives you one less thing to worry about.

Best Practices for Role-Based Access Controls

The following security practices for role-based access controls may make all the difference in protecting your firm’s data. Consider the following:

Track All Data Access

Recording database logins, information downloads, and the locations of logins can help your firm determine how and when a breach was caused. Some firms adopt a User and Entity Behavior Analysis (UEBA) tool to point out any cyber threats.

Require Your Employees to Use Strong Passwords

Hackers can easily access private information when users create insecure passwords. While many users recycle the same password across multiple accounts, this may make them more vulnerable to a security breach.

You can set up your firm’s systems to deny a password that does not meet certain criteria. For example, you may require users to create strong passwords that:

Are at least 12 to 14 characters long.
Use a combination of uppercase and lowercase letters.
Do not include publicly known dates or names, such as your birthdate or your children’s name.
Use various numbers and symbols.

Your firm’s employees should also regularly reset their login information for password security.

Add Multi Factor Authentication for Enhanced Security

Adding two-factor authentication or multifactor authentication to the login process makes it harder for hackers to log in to your company’s web portals. Multi Factor authentication typically involves typing in your username and password, then:

Entering a code sent to your mobile device
Answering security questions
Getting login information, such as password keys, sent to your email address
Verifying that you are a human user via Completely Automated Public Turing test to tell Computers and Humans Apart (CAPTCHA) tools

Outlook on Keeping Your Firm’s Data Secure

Applying role-based access control to your law practice management software adds a layer of confidence to your firm’s data security. Restricting access to information based on each employee’s role within your firm can ease some stress your firm might face in keeping secure information safe.

Maintaining the privacy of sensitive information not only benefits your clients but can also help your firm stay clear of malpractice lawsuits and repercussions from the ABA. Your law firm can take several precautions to stay safe from hackers, such as training employees to pick up on their tricky tactics and requiring strong passwords.

Your firm may also consider adapting Bill4Time’s data security technology, which allows administrators to appropriately delegate user access and track user logins. With Bill4Time, you can control which users can access the information they need to complete projects while keeping your firm running smoothly. You can also set user permissions for functions, allow temporary access for contractors, and enable automatic login tracking.