How You Can Take Control Of Your Firm’s Financial Future

As with most things tech-related, a typical law firm has historically trailed a typical corporation in tracking important business metrics and utilizing them in decision-making. 

But there’s another trend afoot: The legal industry is catching up. 

That’s because advances in legal technology are eliminating challenges that have traditionally bedeviled law firms looking to make decisions with their data. 

The practice management platform MyCase, for example, works behind the scenes to track and surface several key financial insights that will inform better decision-making.

For most firms, acting on these metrics will immediately lead to increased efficiency and profitability. The data also can enable you to effectively pursue broader goals like expanding in a new practice area. 

If you’d like to try it out, feel free to do so here. You can also read on for more on the possibilities surrounding law firm financial reporting with today’s technology. 

Beating the Blockers: The Challenges of Manual Data Processing

Law firms have traditionally faced several challenges in implementing data-driven decision-making. 

Law school, of course, does not teach financial management, and lawyers who are driven by a desire to help their clients may focus less on profitability.

Then there’s the challenge of manual data analysis — a time-consuming task that requires you to gather and interpret information. Many law firms have fragmented systems to manage their operations, and juggling multiple data sources adds difficulties to this process.

Manual data processing can also introduce errors, and it’s the opposite of scalable — more clients will equal more work. 

Finally, even if a firm overcomes these challenges and effectively tracks and analyzes its business metrics, it must still have a clear business plan to guide its decision-making.

Though this may all seem daunting and time-consuming, there’s good news: Advances in legal technology allow you to overcome each of these hurdles with almost no additional work. 

Leveraging Data Automation for Better Results

A cloud-based, unified case management system like MyCase works behind the scenes during your firm’s day-to-day operations, tracking everything from fee allocation to aging invoices. 

Then, it automatically analyzes this data to provide actionable business insights and presents it to you in an intuitive format that’s customized to your goals. 

In other words, MyCase users don’t just get another dashboard — they get a business plan baked into the metrics being tracked. 

Revenue growth, for example, can be measured through the number of leads you’ve added, converted, or failed to convert over a set period of time. 

MyCase also will track billable and nonbillable time per matter, as well as money collected versus money billed. These reports will often reveal inefficiencies or bottlenecks to revenue collection that the firm can address.

As a legal-specific tool, MyCase will segment financial performance by lawyer, office, and practice group. These filters are also customizable.  

The end result: With no additional work, you’ll be presented with the data that will measure how well you’re generating new business, billing for your time, and collecting accounts receivable. 

You’ll get insights into areas for improvement that directly affect your bottom line. In other words, you’ll be making business decisions — and improving profitability — based on data! 

Going Deeper: Get the Most Out of Your Financial Reporting

Of course, these revenue metrics only scratch the surface of what MyCase will track. The system ultimately presents you with a holistic picture of your firm and its performance. 

For example, MyCase uncovers data related to your firm’s productivity, such as the number of open and closed cases at a given time. 

Too many open cases may reveal work inefficiencies, leading you to look into the amount of time spent on administrative work or potential problems with client communication. 

You can ultimately automate many of these tasks with legal technology, letting the system directly increase your profits by working behind the scenes on your behalf. 

Here is a sampling of the specific reports MyCase Financial Reporting will provide — along with an example of how each could be put into action:

• Fee allocation reports measure each employee’s financial contribution to each matter at your firm. Action: These can be used to guide employment decision-making.
• Aging invoice reports show unpaid invoices. Action: These allow you to address problematic client collections before a bill balloons out of control. 
• Time and expense reports. show all billable and non-billable time and expenses for all cases and employees at your firm. Action: These will flag cost centers that can be closely examined.
• Trust account reports track trust balances to reconcile trust retainer accounts. Action: These reports allow you to more easily comply with state laws and simplify your bookkeeping tasks.

Your Financial Future

While a lawyer’s primary focus must be on the practice of law, it’s also important to remember that law firms are for-profit businesses.  

With today’s technology, the profitability component doesn’t have to be an afterthought. 

MyCase’s reporting makes it easier than ever to track, analyze, and act on financial data, making smarter, bolder, and entirely evidence-based business decisions. 

If you’d like to see how MyCase’s financial reporting tools can transform your firm, find more information here or sign up for a 10-day free trial to give it a spin.