The Ultimate Guide to Small Law Firm Management

Maddy Martin

A successful legal practice depends on efficient law firm management, but given how quickly the legal landscape is evolving, this can get progressively more challenging. Fortunately, with better communication and technological breakthroughs streamlining procedures, running a successful law practice is more achievable.

If you want to build a successful law firm, this guide to small law firm management covers tips, tools, and statistics that will make administering your firm simple and effective. Whether you're running your business from home or you're an established legal professional, keep reading to learn how to properly manage your legal business. 

Table of Contents:

How to manage a small law firm

Effective law firm management

How to manage a small law firm

Running a successful law firm requires more than just practicing law. You have to think about organizational leadership, administrative tasks, and everything in between.

Although there isn't a single best practice for running a legal business, following these effective law firm management tips will make your business stand out from the competition.

Provide strong leadership

Did you know: Dun & Bradstreet attributes about 88% of business failures to leadership.

Even if you are the top attorney with a ton of expertise, a lack of leadership abilities could ultimately spell disaster for your firm. As a law firm manager, you are responsible for inspiring your team and articulating the firm’s goals, objectives, and values. 

Fortunately, the skills needed to effectively manage a law firm are learned ones. 

effective law firm management skills

If you are new to managing staff, seek management training or CLE courses to strengthen your management skills. 

Investing in opportunities for your team’s professional development is another aspect of strong leadership. This could take the form of sending your employees to conferences, funding courses, or arranging meetings between junior and senior staff for mentoring purposes. 

Establish standard operating procedures (SOPs)

Did you know: 57% of employees lose 6 hours of work each week due to disorganization.

The foundation of any effective law firm business is its standard operating procedures (SOPs). SOPs give employees direction and structure of your firm’s unique procedures, which helps them stay organized, avoid mistakes, and communicate better. Without them, law firms suffer from inconsistency, disarray, and lack of control.

To create an SOP, begin by gathering and collecting all pertinent data. Then, make it available to every employee in a digital format so they can be easily accessed. Include a complete list of all policies and procedures, your firm's data map, and an official organizational chart.

To make sure everyone on your team is on the same page, use internal communication tools like Slack and Zoom. It's critical that everyone is aware of their respective duties and that they’re kept up to date on the progress of a case or project.

Adopt web-based software solutions

Did you know: Firms using multiple technologies collected 40% more revenue per lawyer.

Technology has become a huge asset for growing law firms. In fact, 59% of lawyers are using web-based software solutions like cloud computing. With the help of a cloud-based legal practice management system, you can manage your firm, organize your cases, and work with clients all in one place.

Some of the most popular tools implemented include client portals, online payments, and client intake and CRM software. According to Clio’s 2021 Legal Trends Report, solo law firms that used these tech solutions earned $50,000 more in revenue than firms that did not. 

Utilize document automation tools

Did you know: More than 60% of technology decision-makers at legal firms claim they are using document automation.

If there is one truth about the legal industry, it is that there is a ton of paperwork to manage. Thankfully, document automation tools offer a consolidated method for creating letters, agreements, motions, pleadings, bills, invoices, and other legal documents. 

Generally speaking, document automation makes it possible to produce a large number of papers in a short amount of time while remaining compliant and upholding a consistent brand.

Document management guarantees that the document is secure, convenient to access, and well-organized for sharing and editing in the future.

Deliver flexible service offerings

Did you know: 79% of clients want to be able to work with their lawyer remotely.

Technology may have provided a competitive advantage in the past, but today it’s an expectation. For many industries, including legal firms, virtual businesses are emerging as the new norm. 

More and more clients are open to having legal consultations and transactions virtually, and many actually prefer it. This includes:

  • Phone consultations
  • Video conferencing
  • Electronic payments
  • Client portals
  • Online chat

Even if your business hasn’t fully adopted the virtual workplace, it’s important to offer flexible services for your clients who aren’t able to meet in person or who value the convenience of online services.

Invest in marketing and branding

Did you know: 57% of clients look for a lawyer on their own, and many search online.

A big part of law firm management that should never be overlooked is branding and marketing. Your brand’s image is your competitive advantage, differentiating yourself from competitors in the eyes of your clients.

Understand what makes your legal practice different from others. What unique service do you provide to clients? Make sure you have a professional website (that’s mobile-friendly) and at least one social media channel to market your services. You can even optimize your website for SEO to increase your search rankings, which will help you earn more clients. 

Don’t forget to measure your marketing efforts as well (call tracking with our virtual receptionists is a great place to start). You don’t want to put effort into avenues that aren’t bringing in new clients. 

Focus on superior client service

Did you know: The most successful law firms receive 75%-90% of their business through referrals.

Customer experience is more crucial than ever in the modern world, so client service needs to be a top priority for your business. 

You must understand your clients' entire customer journey or their overall legal experience so you can be aware of what they want and provide it to them in a way that makes it simple for them.

Don't make any assumptions. Be direct and ask your client what they want. Be specific with your questions and pay attention to the details so you can identify the issues they are attempting to resolve. Then, consider innovative solutions on how to solve them.

Keep hold of your finances

Did you know: 10%-40% of small law firm clients willfully delay paying their legal expenses as long as possible. 

The key to profitability in your law firm is timely billing and effective financial management. Since there are various clients and cases to keep track of, you must be aware of the money coming in and going out of your firm. 

It becomes quite difficult to manage the business and make any financial decisions if you don't have a solid understanding of how your business's finances are doing. 

Investing in a software that automates invoicing and payment processing is one of the best methods to maintain your finances. In fact, 57% of electronic payments get paid within the same day they are billed. This helps businesses save time, increase productivity, and even use less paper. 

Moreover, lawyers don’t collect on 12% of the hours they bill to clients, so finding a means to raise this percentage could result in greater potential income. Software management systems, which have been demonstrated to cut non-billable activities by four to eight hours per month, are an excellent option for small legal offices.

Our virtual receptionists can even track down payments for you so you can stay focused on managing your law firm. For a seamless experience for you and your clients, we integrate with various legal practice payment software including:

Track your key performance indicators (KPIs)

Did you know: 95% of top marketers concur that for KPIs to be truly meaningful, they must be connected to broader business goals.

Being able to evaluate your business objectively to determine where it’s succeeding and where it needs to improve is a key component of good law firm management. But you can’t measure what you don’t track. 

examples of KPIs legal firms should be tracking

You can stay on top of problems and opportunities for development by keeping an eye on how your legal practice areas are doing. Set important organizational metrics and monitor them frequently to maintain accountability. 

Increase responsiveness for lead generation

Did you know: 88% of prospective clients value responsiveness as the deciding factor for which law firm they choose.

It goes without saying that being responsive increases business, but focusing on speedy responses binds you to your phone, which is impractical. Because of this, it takes legal firms three days or longer to respond to voicemails or forms submitted to their firm 42% of the time.

Of course you want more leads, clients, and revenue, but the unpleasant reality of marketing is that in order to speed up the lead process, you’ll also bring in a lot of unqualified leads along with the good.

Without a strategy for qualifying leads, the system becomes clogged and can be burdensome for a law firm. Fortunately, you can outsource virtual receptionists who will answer your calls around the clock and screen your leads for you. 

With virtual receptionists, maximizing leads becomes one of the biggest revenue generators of all. 

Effective law firm management

By providing strong leadership, having an understanding of administrative tasks, and implementing the appropriate technology, you can manage your firm more successfully and free up valuable hours to focus on client interaction and billable activity.

Check out our infographic below for more tips and statistics that will help you successfully manage your small law firm. 

tips and statistics to help you successfully manage a small law firm

It doesn't have to be difficult to manage a legal business. To be successful at law firm management you should develop your confidence, be flexible and open, and ask for professional assistance when necessary. Every law firm and clientele will require a distinct strategy, but by adhering to these fundamentals, your legal practice will be prepared for success.

To take your practice to the next level, outsource your answering and lead qualification to our virtual receptionists. You can capture every opportunity to grow your business when live agents answer your calls around the clock. 

Book a consultation to learn more about how our virtual receptionists can help your legal business.

Sources: Thomson Reuters 1, 2, | Executive Support Magazine | Clio 1, 2, 3 | Law360 | Inbound Law Marketing 1, 2, | Amicus Attorney 1, 2 | BCG Attorney Search | Think with Google | Law Technology Today

Maddy Martin

Maddy Martin is Smith.ai's VP of Marketing. Over the last 15 years, Maddy has built her expertise and reputation in small-business communications, lead conversion, email marketing, partnerships, and SEO.

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