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3 Ways That Paralegals Can Become Indispensable To Their Law Firm

3 Ways That Paralegals Can Become Indispensable To Their Law Firm

January 25, 2019 By Andrew McDermott Leave a Comment

indispensable-paralegal

What makes a paralegal indispensable?

It isn’t hard work specifically, though that’s an important component of the job. If you’re a paralegal you already know how hard you work.

Your firm knows it too.

You’re worth every penny (and more) to your firm. Yet, many paralegals feel they aren’t viewed as the indispensable producers they are. How do you change that? How do you get your firm to treat you as the valuable teammate you are?

The thorny strategy many paralegals ignore

Your job is tough.

No doubt about it. You perform many of the same duties and functions attorneys in your firm perform, but you do it for less pay. It’s not because you’re incapable. Many paralegals know the law better than many other attorneys.

Take Tab Artis.

Artis started off as a paralegal. He sat for the California Bar Exam – without having attended law school. Between November 1997 and November 2007, only eight people had taken the California Bar Exam without a law degree and passed on the first try.

Artis was one of those eight people.

Paralegals are hardworking, capable and proficient at what they do. However, these ingredients alone won’t make you indispensable. These ingredients are the starting point.

They’re the foundation.

Here are the three ingredients you’ll need to become an indispensable paralegal.

Ingredient #1: You solve problems in (at least) one of three ways

You already know it.

Problem-solving is a fundamental part of a paralegal’s job. What you may not know is this. How you go about solving problems for your firm matters just as much as the solution itself. There are three ways to solve problems effectively at your firm.

  1. You develop the ability to solve a problem, any problem immediately or at the very least, faster than anyone else in your firm.
  2. You solve problems in such a precise or complete way that these specific problems are permanently and completely fixed (e.g. recommending a process, tool or battle-tested approach that fixes billable leakage or time tracking issues permanently).
  3. This is as obvious as it sounds. You consistently solve simple, complex and recurring problems cheaply.

The core values here?

This needs to be done consistently. The results should be incredible yet routine. You want to spoil your firm with your outstanding performance because this is the key that produces dependence.

It gets better.

Do one of these consistently and you become indispensable (over a long period of time). Do two of these and you become indispensable in a much shorter period of time.

Ingredient #2: Specialize in a tangential niche

You’re probably already a specialist.

If you’re a paralegal you probably have a specialty. Some specialize in a specific practice area (e.g. tax, estate, bankruptcy or corporate law). Others specialize by bringing more experience or education to the table.

That’s not what I’m talking about.

The specialization I’m talking about is more foundational. It’s something that flows directly from your personality. I’m talking about your social gifts. In The Tipping Point, Malcolm Gladwell points out several types of people with rare and unique social gifts.

  • Connectors are the paralegals who seem to know anyone and everyone. Saying they know lots of people is an understatement. They’re in the habit of creating or making introductions and connecting with people up and down the status chain. Drop them off in a new city and these connectors will have hundreds of new friends by nightfall.
  • Mavens are information specialists who collect, harvest and share new information. These paralegals have a deep set of t-shaped knowledge and are almost “pathologically helpful.” A maven uses their incredibly deep reservoir of knowledge to solve other people’s problems, usually by solving their own.
  • Salesmen are charismatic persuaders with a knack for negotiation. These paralegals are adept at getting others to agree with and believe in them. They’re also great at gaining access to incredibly difficult to reach people or places.

These skills are extremely valuable.

Why?

They’re extremely difficult to find in the general population. The vast majority of people simply don’t want to do the work involved to cultivate these skills and tendencies.

But this is the secret.

This is how you become indispensable to your firm. It’s also how you consistently command an above average salary in a highly competitive market. Master these skills and you can write your own ticket. Eventually, you’re simply too valuable for your firm to lose.

Ingredient #3: Say Yes to the impossible

Partners often ask for the impossible. Their demands are often times, foolish, ridiculous and unrealistic. Often times they don’t know what it takes to do what they want.

Which is exactly why you should say Yes…

… With conditions. The jaded or mistreated paralegal often responds to these requests with an emphatic “That’s not my job!” That’s not what your boss wants to hear.  You know it, I know it.

So you add conditions to your Yes.

  • “I’m supposed to be doing X; did you want me to drop that and focus on Y?”
  • “I can get it done if I have X, Y and Do you want me to talk to purchasing about getting that?”
  • “Let me give it a shot. X could prevent me from getting it done but I’d like to try and work around it. Is that alright?”
  • “Would you give me a day or two to figure out how to do this right?”

See what I mean?

These answers show you’re loyal, committed and at the very least, always willing to try. When you set the tone for this kind of behavior you’re building trust in your firm. Here’s an important bonus. When you tell the partners No, They’re far more likely to trust your judgment.

“Moriah rarely says no. If you get a No, you can be sure there’s a very good reason.”

Most paralegals ignore this, because they don’t know

You’re worth every penny (and more) to your firm. Yet, many paralegals feel they aren’t viewed as the indispensable producers they actually are. How do you change that? How do you get your firm to treat you as the valuable teammate you are?

The secret is out.

This post shows paralegals a simple strategy you can use to become indispensable to your firm.

This is how you do it.

This is how you consistently command an above average salary in a cut-throat and highly competitive market. Master these skills and you can write your own ticket. You’re simply too valuable for your firm to lose to a competitor.

All it takes is practice.

With consistent effort and a focus on providing the right kind of value, your firm will realize the truth. You’re the indispensable paralegal they desperately need.

Try Bill4Time for free.

Filed Under: Blog, Legal

A Profile of the Ideal Paralegal in the Modern Law Firm

January 23, 2019 By Andrew McDermott Leave a Comment

ideal paralegal

What’s behind every great attorney? The ideal paralegal.

According to the Bureau of Labor Statistics, paralegal employment is projected to grow at 17 percent from 2012 to 2022. That’s twice as fast as the rest of the legal industry.

Savvy firms know why.

Clients want more. No, they’re demanding more. Law firms are under a significant amount of pressure to produce higher quality work. Firms are expected to produce results in less time and with less money, even as rates increase nationwide.

Law firms are struggling to keep up

According to the 2018 Report on the State of the Legal Market, growth in demand for law firm services is sluggish. Rate progression is climbing as realization rates continue to fall.

growth-demand

This is the state of the modern law firm. Competition is fierce as firms battle for a smaller slice of the pie. It’s a buyer’s market and clients know it. As a result, they’ve decided to increase their demands.

It’s harsh but understandable.

This is the environment paralegals are expected to perform in. More and more, paralegals are expected to perform many of the same duties as attorneys (with supervision of course). As far as expectations go, this isn’t new. What is new is the fact that paralegals face resistance on all sides.

We’re getting ahead of ourselves.

Before we can create a profile of the ideal paralegal we need to answer a basic question. What exactly is a paralegal?

Seriously?

I know, I know. This seems like a ridiculous question to ask. Any legal professional worth their salt knows the answer to this question, right?

Wrong.

Remember my previous post about paralegal best practices? There’s a significant amount of confusion regarding a paralegal’s roles and responsibilities.

Are they simply administrative assistants who take phone calls and handle routine tasks like transcription? Or are they proficient legal professionals expected to handle the overflow attorneys simply don’t have the time to do?

The answer is subjective.

It varies depending on the firm. Paralegals, in general, are treated as a…

  1. “Highly qualified administrative assistant” who spends a significant amount of time on low-value tasks (i.e. coffee) a single intern can handle.
  2. “Highly skilled legal professional” who’s able to manage a significant amount of legal work (with the appropriate levels of supervision and support).
  3. “Highly skilled legal professional” who doubles as an administrative assistant in a pinch. This has a negative impact on utilization rates.

Here’s why this matters.

Some firms expect paralegals to juggle these expectations. In firms where paralegals wear multiple hats, they’re forced to manage mutually exclusive demands.

It’s frustrating.

Here’s how that plays out.

  • Attorney A views Paralegal A as a “highly skilled legal professional“
  • Attorney B views Paralegal A as a “highly qualified administrative assistant“
  • Attorney A and Attorney B both ask Paralegal A for “help” at the same time.
  • Attorney A needs help preparing a legal document. Attorney B wants coffee in 15 minutes.

See the problem?

Admittedly, this isn’t a problem for healthy law firms but they’re the exception, not the rule. If we’re going to create a profile of the ideal paralegal we need to define what a paralegal actually is.

What’s a paralegal?

If you’re a paralegal you’re a highly skilled legal professional.

“Paralegals perform substantive legal work that would otherwise be done by attorneys. Clerical work is not substantive legal work.”

The answer seems obvious but there are quite a few attorneys who treat paralegals as if they’re administrative assistants.

What’s an ideal paralegal?

The ideal paralegal provides attorneys and law firms the opportunity they need to spring ahead. To keep up with the external demands placed on them by clients and the industry.

This is what’s needed.

It all comes down to personality. The big five personality traits also known as the OCEAN model provides firms with a template for the ideal paralegal.

5 personality characteristics

Here’s how it works.

The OCEAN model lists five dimensions of personality which are defined as:

  • Openness reflects intelligence and the degree of intellectual curiosity, creativity and desire for novelty a person has. Paralegals who are high in trait openness are curious and well suited to be mavens, professionals who are able to take in a tremendous amount of information.
  • Conscientiousness reflects a tendency towards trustworthiness, self-discipline and reliability instead of spontaneity. Highly conscientious people are hardworking, reliable and focused. Paralegals who are conscientious will either be industrious, hard working and focused on performance and competence or orderly more organized and less cluttered (e.g. highly organized, efficient and neat).
  • Extraversion refers to attention seeking, dominance and an outgoing personality. Paralegals who are high in extraversion are [typically connectors or salespeople]. These paralegals are fantastic connectors and are able to build connections to and network with, key influencers.
  • Agreeableness measures a person’s trusting and helpful nature. Highly agreeable people are seen as compassionate and cooperative. Paralegals who are high in agreeableness are easy to get along with and easy to please. They do their best to avoid conflict.
  • Neuroticism points to a person’s tendency towards psychological stress. It refers to emotional stability and psychological well-being. Paralegals with very high levels of neuroticism tend to have worse psychological well-being. Neuroticism trends towards avoiding risk.

Are you seeing it?

The profile of your ideal paralegal?

No?

Each of these personality traits points to a particular strength or weakness. It’s something you’ll need to determine for your firm. These personality traits can be a blessing or a curse depending on a variety of factors such as:

  • Practice area. High-stress practice areas are hard on paralegals who are high in trait neuroticism.
  • The amount of research involved. Paralegals who are high in trait openness will enjoy heavy research and analysis.
  • Relationships and connections. Extravert paralegals will thrive in environments where they spend a significant amount of time working, negotiating and interacting with people. Low conflict practice areas are ideal for paralegals who are high in agreeableness. High conflict practice areas are perfect for paralegals who thrive on strenuous negotiation and conflict.
  • Firm size. If you’re running a large firm use extraversion as a measurement to identify paralegals that are best for your firm.
  • Problem areas. This can include client demands, firm challenges (e.g. billable leakage, document management issues or time tracking woes) or any other issues that create problems.
  • High-risk environments will break paralegals who are high in neuroticism. Those low in neuroticism thrive in any environment as they’re more stress resilient.

See it now?

The ideal paralegal depends on a variety of factors, including your practice area, circumstance, proximity to people and the type of work that’s being done.

What does that look like?

How can paralegals use this data to improve their profile inside of their firm? Here are a few examples to show you what I mean.

  • More and more, clients refuse to pay for research. However, research is an indispensable part your work. How can paralegals help you solve this problem? You hire a paralegal who is high in trait openness and demonstrates maven-like qualities.
  • Your law firm focuses on one or two practice areas. The work clients request is fairly routine (wills and trusts). Your firm relies on a subscription or fixed fee AFA. The partners want to find a way to make this billing model work financially. You increase your attorney to paralegal ratio (e.g. 3:1), hiring agreeable and highly conscientious paralegals to handle the routine paperwork (with attorney supervision of course).
  • You’re running a small one or two person firm. You’re looking for a way to take on more work without hiring an additional attorney. You recruit a paralegal who’s high in agreeableness and trait conscientiousness (orderliness) to help you grow your firm. Your paralegal helps you build your firm from the ground up in exchange for a sizable future reward.

The possibilities are endless.

And specific.

There isn’t just one profile of the ideal paralegal in the modern law firm. There are lots of profiles and they all depend on you. Are you a paralegal? Your personality is your greatest strength. Running a solo, small boutique law firm? Finding the right paralegal can be simple and straightforward.

What’s behind every great attorney?

A paralegal.

Clients want more. Law firms demand more as well. This is the state of the modern law firm. Competition is fierce as firms battle it out for a smaller piece of the pie. It’s a buyer’s market and clients know it.

Paralegals are the answer.

Paralegals perform substantive legal work that would otherwise be done by attorneys. They’re highly skilled legal professionals. It’s the reason demand is growing at 17 percent.

It’s more than that.

Paralegals give law firms the chance to compete in a dynamically shifting market. Paralegals give law firms the breathing room they need. It isn’t about a single profile, it’s about your profile. Choose thoughtfully and you’ll find the ideal paralegal is one that fits perfectly in the most important law firm, yours.

Try Bill4Time for free.

Filed Under: Blog, Legal

3 Best Practices Paralegals Need to Adopt in 2019

January 21, 2019 By Andrew McDermott 1 Comment

best-practices-paralegals

Client expectations are growing. They need paralegals. But what are those best practices paralegals need to help their firms fulfill the needs of their clients?

Today firms are expected to produce work that provides a significant amount of value for clients and their interests. Firms are struggling under the weight of an ever-increasing workload. It’s too much for attorneys to bear on their own.

They need you.

Firms are relying more and more on paralegals to help them manage their growing workload.

Why paralegals should carry this heavy workload

It’s a chance to add value.

It’s an incredible opportunity to show everyone in your firm that you’re the indispensable legal professional you know yourself to be.

Why does that matter?

There’s a significant amount of confusion regarding a paralegal’s roles and responsibilities. As far as firms are concerned paralegals aren’t created equal. What’s worse, some firms have a diminutive view of paralegals.

These disparities are harmful.

Paralegals are either viewed as (a.) a “highly qualified administrative assistant” who is asked to spend a significant amount of time on low-value tasks an intern can handle or (b.)  A “highly skilled legal professional” who’s able to manage a significant amount of complex legal work (with the appropriate levels of supervision and support).

It’s complicated, isn’t it?

Then, to complicate things further, there’s a small segment of attorneys who are threatened by paralegals. As firms ask paralegals to take on more work these attorneys resist, they’re afraid of becoming “displaced.”

Paralegals can fix this.

How? How can paralegals go about solving this complex, unpleasant and difficult problem?

By following best practices, paralegals can succeed.

Paralegals become too important to ignore when they follow best practices with unrivaled discipline. Which best practices are we talking about specifically?

Best practice for paralegals #1: Creating/following firm protocols

Your firm needs clear project, task and document management protocols. If they already have them it’s important that you follow them (many in your firm won’t). If you don’t have them, discuss them with management/partners in your firm.

You’ll want to create processes and guidelines for:

  • Security, access, and privileges (e.g. determining who has access to what, when and why)
  • Project, case and matter outlines and checklists
  • Document access and management protocols
  • Time tracking, billing, invoicing, accounting and reporting guidelines. Follow these protocols to the letter
  • Managing disclosure notices and production requests

If you’re organized the people on your team are far more likely to be organized. This means paralegals have a direct impact on their firm’s utilization and realization rates.

Best practice for paralegals #2: Improving your organizational skills

It depends on the firm but paralegals today are expected to:

  • Review and organize client files
  • Perform legal research
  • Prepare legal documents
  • Draft pleadings
  • Process discovery notices
  • Interview clients and witnesses
  • Administer subpoenas
  • Manage a bevy of minor administrative requests (e.g. get coffee, return phone calls, etc.)

Today these tasks have ballooned into something more comprehensive. Paralegals at many firms are now expected to:

  • Manage and coordinate electronic discovery
  • Coordinate risk assessments
  • Perform due diligence (delineated by practice area)
  • Coordinate/manage compliance in specific/key areas
  • Handle litigation activities (e.g. drafting pleadings, preparing for the trial, etc.)
  • License and contract negotiation
  • Monitor intellectual property
  • Draft minutes
  • Handle project, task and document management

This isn’t an either-or proposition. Oh no, this is an all of the above proposition. Paralegals are expected to handle a massive list of to-dos.

A list that continues to grow.

The more efficient you are at completing this growing list of to dos, the easier it will be to produce the results you need.

Rely on:

  1. Checklists, policies, procedures and protocols
  2. Software tools, resources and training aids that increase productivity and provide leverage
  3. A team of connectors, mavens and salespeople who improve your productivity

These three strategies keep you organized. They maintain efficiency and productivity. This seems so obvious. Why am I suggesting that you do this?

Because most of your peers aren’t doing this.

They’re not producing the volume of work that needs to be done and that’s simply due to a lack of the basics. It’s common for attorneys to make routine mistakes.

Best practice for paralegals #3:  Voluntary CLE

Continuing legal education should be an ongoing concern. A large body of knowledge gives you the tools you need to become indispensable to your firm. But where do you start, what should you learn first?

  • Develop basic business skills so you’re able to identify tasks that need to be delegated by attorneys to you
  • Improve your project, matter and task management skills
  • Improve your communication skills (reading and writing). Work to communicate clearly and precisely
  • Identify when you’ll need to ask attorneys to delegate key tasks to capable paralegals (you)
  • Request additional legal training from your firm
  • Identify ways to improve paralegal utilization your firm
  • Help the attorneys in your firm identify tasks, projects and activities you can help them with

Continuing your legal education is the easiest way to increase the value you’re able to provide to your firm. This, in turn, gives you the negotiating power you need to increase the salary, benefits and perks you receive.

Your firm’s expectations are growing.

These expectations are growing in direct proportion to client demands. Firms are expected to produce a large volume of outstanding work. But firms are struggling under the weight of an ever-increasing workload. It’s simply too much for attorneys to bear on their own.

You’re needed more than ever.

Carrying this workload is an opportunity. It’s a chance for you to show your firm that you’re the indispensable paralegal professional you know yourself to be.

It isn’t complicated.

It all boils down to best practices. You’re a highly skilled legal professional. Consistently following best practices validates that claim. With the right approach and good habits, you’ll have what you need to meet your firm’s growing expectations.

Try Bill4Time for free.

Filed Under: Blog, Legal

2 Best Practices For Determining Reasonable Fees and Their Impact on Realization Rates

January 14, 2019 By Andrew McDermott Leave a Comment

reasonable fees

Are your fees reasonable for your clients? How do they impact your firm’s realization rates?

It’s 2016.

Cravath, Swaine & Moore LLP has just stated that it would boost it’s starting pay for junior lawyers to $180,000. Firms across the country scrambled to follow suit. Those increases have continued to today where an associate’s starting salary hovers at $190,000.

How did clients respond?

With protests. Clients complained against the rate increases firms were paying their associates because they know where the money will come from.

It comes from them.

Why clients hate rate increases

When Cravath increased associate salaries, Bank of America’s general counsel stated they were against the rate increase and that they weren’t going to pay for it.

“While we respect the firms’ judgment about what best serves their long-term competitive interests, we are aware of no market-driven basis for such an increase and do not expect to bear the costs of the firms’ decisions.”

It’s stressful when clients decide not to pay.

Yet it’s unavoidable.

There will be pushback. If you increase your rates in an attempt to ensure you’re paid what you’re worth your clients will resist.

Why?

Because there’s an unconscious bias lurking at the bottom of your client’s rate objections. An unreasonable bias that masquerades as fair and appropriate.

All rate increases are unreasonable.

The majority of your clients won’t admit this unpalatable truth but there it is. So how do you increase your rates, receive reasonable fees for your expertise and ensure realization rates say high?

You follow best practices.

This means relying on the eight factors listed in Rule 1.5 of the ABA’s Model for Professional Conduct.

  1. The time and labor required for the matter, the novelty and difficulty of the questions involved, and the skill necessary to handle the matter properly.
  2. The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
  3. The fee customarily charged in the locality for similar legal services;
  4. The amount involved and the results obtained;
  5. The time limitations imposed by the client or by the circumstances;
  6. The nature and length of the professional relationship with the client;
  7. The experience, reputation, and ability of the lawyer or lawyers performing the services; and
  8. Whether the fee is fixed or contingent.

This is the foundation.

These are important factors that every attorney and law firm should follow. As a whole though, these factors aren’t as specific as they could be. Our focus here is (a.) setting reasonable fees (which is quite broad) and (b.) improving firm realization rates.

How do we do that?

Well, the solution is both obvious and counterintuitive.

You communicate and prepare.

I realize this advice sounds generic so we’re going to unpack this a bit. Simply telling associates to “go ahead and discuss things with clients ahead of time” isn’t all that helpful. These strategies need four ingredients to work effectively.

  1. Setting reasonable fees can be a frustrating and subjective endeavor. If you don’t have a clear approach it’s going to be difficult to get the results you need from your clients.
  2. The clients you target aren’t always the clients you accept. You need to make an important distinction between the clients you want versus the clients you have.
  3. When what and how are just as important as asking “how much?” If your timing is poor, clients are far more likely to resist. When it’s time to pay they may be unwilling or unable to comply with your request.
  4. Circumstances tend to constrain our behavior. It’s difficult to say no to the wrong client when they have deep pockets, the right connections or incentives you want. Sometimes though, it’s important to say no even when we don’t want to.

With that in mind let’s take a look at our best practices.

Best practice #1: Disqualify your prospects quickly

The first step in determining reasonable fees begins with choosing the right clients. When it comes to the word “reasonable,” there’s a great degree of variance.

Why is that?

Your services are only as valuable as you and your clients say they are.

What?

Some firms bill on a sliding scale representing indigent clients for $21 to $250 per mo. Other firms bill a rate of $1,105 per hour sending clients invoices in the tens of thousands for services rendered in a given month.

What’s the difference?

Both of these firms work exclusively with clients who meet the following criteria:

They’re willing and able to buy.

That’s it. This seems so obvious, doesn’t it? Yet it’s the one thing many firms refuse to do. Most firms do the opposite. They take on clients who appear to have the money for their services. They do incredible work for their clients. These clients then decide not to pay.

This is unnecessary.

Here are a few disqualification strategies you can use to dramatically increase your realization rates.

  • Tie practice areas, fee arrangements and client demographics together. If you prefer to be paid on retainer identify the demographics of clients who can afford to do that. Identify the practice areas most likely to produce that result. Ask qualifying questions during your client intake process. Disqualify prospects who aren’t a good fit.
  • Identify two to three firms who are a better fit for unqualified prospects. Refer your unqualified prospects to these firms. This gives you the chance to provide value to prospects who aren’t a good fit for your firm. But it also helps you avoid billing disputes and payment issues down the road.
  • Be selfish with your time. Choose to share time with prospects who only meet your predetermined criteria. If you need a larger retainer or upfront fees bill prospects for an upfront consultation. This enables you to separate serious prospects from entitled time wasters or hungry knowledge vampires.

This strategy requires discipline, targeting, timing and a strong ability to say No. It’s heresy to the attorneys and law firms who are desperate for revenue and afraid of losing the business.

The effects on your realization rates:

  • You attract clients who (a.) have the money/resources to pay for your services and (b.) are willing to pay for your services
  • You decrease billing disputes and collection activity
  • Dramatically reduce the number of write-offs, write-downs and discounts you have to issue to keep clients
  • Increased realization rates at all three levels as you attract clients who value your work enough to pay full price for your services

See the difference?

Best practice #2: Spell your terms and conditions out first

Clients hate surprises.

Negotiate a desired rate/range, ideal budget and the mechanisms for adjusting that rate at the start of your relationship. This is not what happens at many firms.

Clients are simply told.

Many firms negotiate with a “take it or leave it” approach – “if you want my services this is the price.” If clients are desperate, and you’re the best candidate, many will go along with it. But this certainly doesn’t produce the kind of lasting loyalty you need to build a stable book of business.

Wait just a minute here.

Am I suggesting that you let clients dictate the price they should pay for your time, hard work and expertise?

Absolutely not.

I’m suggesting that you use No to negotiate with your clients.

Here’s the problem.

You really can’t use the word “No.” It’s a kind of currency you’ll need to spend carefully. Use the word No directly one too many times and you risk alienating your prospects before they’ve had a chance to become clients.

This is complicated.

How do you say no without saying no? Here’s are a few strategies I’ve gleaned (and revised) from Adam Grant, Wharton professor and author of Give and Take:

  1. The deferral. I’m only able to take on two additional clients at this time. If you’re not ready to move forward maybe you can check in again in # months? (for prospects who may not be serious)
  2. The delay. Would you prefer to pay for X now or later? Paying now would require a larger upfront fee but would be cheaper overall. Paying later could be done in installments (via AFAs) but would be more expensive in the long term
  3. The bridge. I have two associates in my firm, (Stanford and Earnest) who are specialists in IP Law. Getting their help on this would require an additional $8,000 in the next week but would save you $43K to 96K in hard costs over the next five months. What would you like to do?
  4. The referral. I’d like to work with you on this. I feel that Steven Mitchell, a partner at Rosenberry, Pasquale and Reinstadt, would do a much better job with your taxation matter. Can I put you in touch with him?

You can also use:

  • The stipulation. I can handle 2/3 of the issues in your case at the budget you’ve set. How do you want to handle the 1/3 that’s left?
  • The alternative. Here are a few low cost alternatives we can use to handle the minor details of your case. This would ensure you have the budget needed to handle major items like X.
  • The option. Would you prefer to fight this and go to trial or settle and make this go away quickly? You’ll need $350K to fight this and $127K to settle. Fighting this will take 8 mo. (or more) settling can be done in 2 mo. or less.

See what’s happening?

These examples give you the chance to tie your client’s deepest desires to their wallet (budget). This is psychological framing at its finest. It also isn’t a trick or a form of manipulation. If your clients want a specific result or outcome they’ll need to provide you with the resources to accomplish that.

The effects on your realization rates:

  • Saying No frames the conversation appropriately. It shows clients you’re willing to work with them but you have limits on what you’re willing or able to do for them.
  • Your willingness to say No, to walk away triggers loss aversion, increasing their willingness to work with you in good faith.
  • Their desire to keep you on the hook, to avoid losing you increases the likelihood of improved realization rates and greater profit per partner/employee
  • Setting the terms and conditions ahead of time dramatically reduces billing disputes and clients haggling over rates

Are your fees are unreasonable?

Some prospects think so.

Your services are only as valuable as you and your clients say they are. Most prospects should feel that your fees are unreasonable. If they’re not a fit they should be disqualified.

What about your realization rates?

Most firms have far more control over their realization rates than they realize. Follow the right steps and your firm’s revenue and profits will skyrocket. Start by:

  • Identifying the blind spots that hurt your firm’s realization rate
  • Optimizing your firm’s realization rate
  • Improving your firm’s realization efficiency
  • Outlining the right strategies you’ll need to avoid billing disputes

Rule 1.5 is the foundation.

Your firm can build on that foundation. With the right communication and a bit of preparation you’ll have the strategies and tactics you need to boost your firm’s revenues and realization rates, no disputes needed.

Try Bill4Time for free.

Filed Under: Blog, Legal

Why Investors Are Betting Big On Legal Tech

January 14, 2019 By Andrew McDermott Leave a Comment

legal tech investors

Work used to be all about labor.

If a problem needed to be solved most firms simply threw more hours at their challenges. It’s no surprise then that the results were often hit or miss.

That’s no longer the case.

Today there’s a significant demand for legal technology. Investors have caught wind of this trend and they’re rushing to meet (fund) the demand for legal tech.

Are investors really all that interested in law firms?

They’re not focused on firms.

They’re focused on legal tech. That’s the automatic assumption most readers make when they hear about the seismic shifts taking place in the legal profession. While most think “The investors are coming” attorneys ask “What about ABA model rule number 5.4?” As you know rule number 5.4 states (among other things):

“A lawyer shall not form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law.”

Investors are focused technology that serves two distinct audiences.

  1. Consumers who are interested in highly effective, low cost legal technology to solve routine or mundane problems like declaring bankruptcy, drafting a will, etc.
  2. Law firms that are in desperate need of sophisticated tools. Resources that enable them to produce the highest quality work faster and in greater volume.

What’s driving demand?

Why are investors betting big on legal technology these days? There’s a simple, one-word answer that explains this demand in a nutshell.

Clients.

Clients have changed considerably over the last few decades. Firms have experienced a plethora of changes that developed slowly over time.

What sort of changes?

  • Today, more and more clients are unwilling to pay for research costs
  • More clients are unwilling to pay for first-year/junior associates
  • Clients are demanding alternative fee arrangements
  • Clients expect firms to go (far) above and beyond the simple delivery of legal services
  • Clients are quick to ask questions, quick to say No.
  • More clients are refusing to pay their invoices in full or on time
  • Firm fees are climbing as realization rates are free falling
  • Clients don’t want to be sold an idea, they want to be part of building it

This list isn’t comprehensive.

But it’s meant to convey some key points. The legal profession has been (erroneously) viewed as one filled with “fat cats.” Professionals preying on their client’s goodwill and profiting due to some hidden largesse. This is true in the vast minority of cases.

You know the truth.

If you’re like most attorneys, you work incredibly hard for the business you receive. The competition is cutthroat. It seems there’s always downward pressure on your fees – even as demand and performance requirements increase.

Investors see it.

Investors are betting big on their ability to fix the problem

Not directly of course but with their money.

Investors believe there’s an opportunity to invest their way to the solution.

Think about it for a second.

Leading venture capital firms made key investments in 2018.

Legal technology investments: 2018
Logikcull ($25m) CSDisco ($20m)
Everlaw ($25m) LawGeex ($12m)
Seal Software ($30m) Kira Systems ($50m)
LegalZoom ($500m) Atrium LTS ($65m)

Here’s where things get interesting.

The volume of the investment in 2018 exceeded the volume in 2017. Yet there were 76 percent fewer deals done in 2018. What does this mean?

Better quality deals.

Investors are choosing carefully. They’re focusing on high-quality deals that are much more likely to produce results.

Here take a look.

vc legal tech investors

See the difference?

Here’s a more detailed breakdown of the investment landscape.

Tracxn – Legal Tech Startup Landscape from Tracxn

So what does this mean for attorneys? How does this affect law firms and the industry as a whole?

The majority of firms fail to innovate

Cue the eye rolls.

This sounds like a cute catchphrase doesn’t it? As if it’s a word that’s not grounded in the harsh reality you’re facing on a day-to-day basis.

It’s actually the opposite.

Here’s how Mark Cohen, legendary trial attorney and legal columnist at Forbes describes innovation.

“What is Innovation? It’s more than a catch-phrase.  ‘Innovation’ has several meanings dependent upon context. “The introduction of something new” is the Merriam-Webster definition. In business, ‘innovation’ is applying ideas to satisfy the needs and expectations of customers. Innovation is the causal connection between/among idea, application, adoption, and result—satisfied customers. Innovation produces results that benefit clients.”

Remember the list of changes I mentioned earlier?

There’s a long list of changes that have taken place over the last few decades. Clients have been trying to tell professionals in our industry that they’re dissatisfied. That they’re unhappy with the solutions firms in the past have offered them.

Most firms haven’t listened.

This is why we’ve seen such a large investment in legal tech. Investors are injecting capital in an effort to solve the problems/meet the needs of two distinct groups.

  1. Consumers who are interested in highly effective, low cost legal technology to solve routine or mundane problems like declaring bankruptcy, drafting a will, etc.
  2. Law firms that are in desperate need of sophisticated tools. Resources that enable them to produce the highest quality work faster and in greater volume.

Here’s how this affects you.

You have a choice to make. It’s an opportunity actually. Clients in the marketplace want innovation. They’re looking for firms that can deliver new, creative solutions. A way to relieve the mounting pressure they’re facing from a variety of sources.

Clients today are dealing with:

  • A more litigious environment that has become difficult to navigate
  • New legal threats from a variety of sources
  • An ever-growing web of complex laws, compliance requirements and expectations
  • More pressure from outside forces in the form of competitors, predators and threats
  • A dizzying array of data, details and procedures

The list goes on and on.

So here’s the crucial question. How can attorneys use this investor shift to benefit their firms?

  1. Give clients the innovative solutions they need to solve their laundry list of complex problems. Focus your attention on the advocacy and on billing for true value versus simply invoicing for time. Meet each of your clients four needs.
  2. Use emerging legal tech (i.e. practice management software) to create the leverage, value, outcomes and results your firm needs to grow. Instead of fighting legal tech, lean into it. Use software providers to grow your firm. Test low cost providers like LegalZoom. Create a map of their strengths and weaknesses.

You have an opportunity.

Most firms are trying to resist the change that’s already upon them. They’re trying to maintain the status quo, to maintain a traditional stance on how they practice law.

It’s not going to work.

Your clients are under pressure to change. Law firms (and the industry) are all under pressure to change. Investors are scrambling to meet the demand. Change isn’t coming, it’s already here.

Are you ready?

The law used to be all about labor

It used to be about your firm’s collective abilities, knowledge and expertise. If a problem needed to be solved most firms simply threw more hours at their challenges. The results were often hit or miss.

Not anymore.

Legal technology gives firms and clients the tools they need to solve complex problems efficiently. Investors have seen the opportunity. They’re investing their money in an attempt to meet the growing demand.

Are you?

If you haven’t moved to meet the demand there’s still time. You still have time to take advantage of the opportunity in front of you.

But you’ll need to act fast.

Your competitors are starting to act on this opportunity as well. The window of opportunity may close in time. There’s a significant demand for legal technology. With the right approach and technology as your ally, your firm will have the tools it needs to survive in any market.

But only if you start now.

Try Bill4Time for free.

Filed Under: Blog, Legal

3 Practical Ways Small Firms Can Use Legal Tech Solutions

January 11, 2019 By Andrew McDermott 1 Comment

legal tech solutions

Diving headfirst into legal tech solutions that you’re unfamiliar with can be a bit, disconcerting. It also can be counterproductive. A few early adopters are willing to take the inherent risks that come with trying something new.

But is it worth it?

If you start slowly, use the right tools and begin with a concrete plan the answer is a resounding Yes! Here are three practical ways to use legal tech solutions in your firm.

Legal Tech Solution #1: Outsourcing client intake

It’s common for most firms.

Their utilization rates aren’t where they need to be. It’s common for firms to lose a significant amount of billable time to non-billable tasks.

A large task?

Client intake and customer service. Just think about it, with the right technology solution you’d be able to add an additional four to six hours to your day.

It’s reasonable.

How would you do it though? What are some practical legal tech solutions you could use to automate client intake and customer service?

  • Sign up with email providers like Infusionsoft, MailChimp or ConvertKit. Create an autoresponder sequence via the tools on their platform. Create a sequence for prospects who contact your firm via your contact, landing, and landing pages. When customers fill out a form they automatically receive helpful and valuable
  • Provide your clients with 24/7 availability via a Chatbot. Doing this gives you the ability to (a.) handle client intake, enabling you to separate serious prospects vs. tire kickers and time wasters. (b.) provide outstanding support to clients sorting them by need, urgency, motive or intent.
  • Manage prospective clients with a CRM tool that’s able to integrate directly or via third party tools like Zapier. Use the above tools to prioritize the prospects who have earned your attention and focus. Use top performers like HubSpot, PipeDrive or ZohoCRM or specialized tools like Law Ruler and Onsite CRM that are specially tailored for the legal industry.
  • Invite serious candidates to schedule a meeting with you automatically via automated scheduling tools like Calendly. These candidates are flagged by your CRM system as serious, qualified and interested. They’ve jumped through the appropriate hoops and they’ve earned your firm’s attention.

Can you see it?

Using four types of tools, with reasonably priced options, you can maximize the number of leads your firm generates and improve your firm’s utilization rate, simultaneously.

Legal Tech Solution #2: Automate review management

It’s a rainmaker’s secret weapon.

Reviews.

They look different depending on your firm’s practice area and the overall level or size if your firm. AmLaw 100 firms rely on media mentions from noted influencers and extensive coverage in the New York Times or the Wall Street Journal. Small to medium firms rely on reviews in specialized platforms like Avvo, Yelp and Google Reviews.

They’re both considered reviews.

Reputation management tools make it easy for firms to request, receive and promote five-star reviews. This review management platform allows you to automate the process from A to Z.

legal tech solutions firm reviews

Here’s a practical strategy you can use to win more clients.

  • You’ve finished your work with a client. You email, text or post a message with one simple question. “On a scale of 1 to 5 stars, 5 being excellent, how likely are you to recommend us?” This question helps you to identify clients who are hostile, apathetic and believers.
  • Create an email or text autoresponder sequence that enables you to reach out to clients automatically. You’ll be able to consistently request reviews without being involved directly. If clients are open to it, you’ll receive reviews (and new clients via Google search and review platforms like Yelp) without being involved directly.
  • Send hostiles to an internal review form. These clients provide you with the feedback your firm needs to grow automatically. Send friendlies to the review site of your choice (e.g. Avvo, Yelp, Google Reviews) where they’ll be able to share their story with other interested prospects.
  • Thank friendlies and hostiles for their willingness to share their feedback. Integrate their feedback, then show both groups that you took the time to act on their feedback.

Why does this matter?

Because 91 percent of your prospective clients read reviews. Because 84 percent of them trust reviews as much as a recommendation from a friend.

Which firms stand out? See what I mean?

Legal Tech Solution #3: Project and document management

This is an easy win.

Who’s responsible for filing paperwork? Are attorneys expected to add billables to their invoices and send them out themselves? Or is this something your support teams are expected to handle?

Was it handled?When? Were the appropriate tasks handled per firm specifications? These aren’t always easy questions to answer. However, they’re details that many firms feel they’re not able to answer.

How can legal tech help?

  1. Choose a project management tool that (a.) integrates with, or is part of your practice, document and time management software. This will enable you to streamline the transfer/sharing of data from one portion of your tools to the next, and (b.) provides you with the security you need to protect both your projects and the data under your care.
  2. Create a standardized list of steps or procedures for common tasks and to-dos. It’s common for owners/shareholders at small firms to operate from memory. That works until you have associates looking to you for guidance and instruction.
  3. Save these procedures in your document management system. Be sure to set the right permissions for them so appropriate teams can accept, review and download the documents you’ve created. You’ll want to make sure the details and procedures list tells the whole story. Just enough to know what to do, but not so much that your instructions become overwhelming.
  4. Create an email autoresponder sequence for your team. When you hire a paralegal, work with a virtual assistant or freelancer have them subscribe (via a form) to your email autoresponder sequence. Do the same thing for interns, associates and partners. Point them to the content in your document management system that will (a.) show them what you expect and what needs to be done, (b.) outlines how and when important tasks should be done, and (c.) the resources and tools they’ll need to perform well.

Did you catch that?

You can use these legal tech solutions in your small firms to attract clients, train employees and improve productivity. With the right tools, you can boost realization and firm utilization rates. You can decrease stress and burnout. You can keep your teams focused on the elements that matter most.

Serving your clients well.

All of this with a few simple tools and a little bit of up-front preparation.

Legal tech solutions should be productive

If you’re aware of the risks ahead of time it will be. Most firms dive head first into legal tech solutions they’re unfamiliar with. It’s no wonder then, that they experience so much transitional pain. It’s completely reasonable that things are difficult and counterproductive.

These firms don’t have a plan.

But you do.

With the right approach and a clear expectation of the results you hope to achieve, your firm will have the legal tools and resources it needs to boost firm performance, practically.

Try Bill4Time for free.

Filed Under: Blog, Legal

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