Law firms, especially solo practices, operate in a very reactive fashion.
They react to issues as they arise.
They handle cases as they come up.
They take care of their books when it’s tax time, or time to pay the bills.
But there is a huge problem with this approach.
First, it’s extremely stressful. Day-to-day, no lawyer should be juggling a million different things. There is only so much that one person can competently handle.
Second, it’s counter-productive and costly. Jumping from one issue to the next is time-consuming for any lawyer.
At Kahuna Accounting, we see this all the time. We see lawyers who are reacting, playing catch-up and looking backward more than forward.
We see it because this challenge of being reactive is even more on display with how lawyers approach their financials. But this is not just about financial systems, this is about being intentional with your time and your law practice.
To get out of this cycle, it’s necessary to prioritize, set up systems, maximize resources and ultimately have a more effective practice.
What are you prioritizing?
The biggest challenges for today’s law firms are adding more billable work and offloading the tasks of management and operations that have nothing to do with practicing law.
The goal is not to get those done. The goal is to have a healthy, steadily growing practice that has systems in place so you can choose for yourself what you want your firm and your work to be.
As long as you are in reaction-mode, that type of systematic growth will never take place.
So what does this have to do with bookkeeping?
With sights set on systematic growth, we can take a look at how modern bookkeeping helps take a huge jump forward toward a healthy business.
1. Get Time Back
I believe the reason it is so difficult to prioritize and systematize is because there are simply not enough hours in the day. Just catching up to the tasks at hand are enough to fill a day, let alone serving clients, marketing, and being strategic about the big picture items in the firm.
So priority number one for any attorney is to get as much time back as possible.
John Suh, from Legal Zoom spoke at the Clio Conference last year and shared a very important statistic.
He said attorneys in larger firms spend 85-90% of their time on billable work, but in a solo or small firm that percentage goes down to around 40% or less!
The battle for attorneys is getting that time back. So how do you do it?
You get time back by creating systems and building a team. Systems happen when things are predictable, trainable and repeatable.
And when I say build a team, I’m not talking the traditional W-2 employee in your office. Outsourcing and virtual help is a new reality that’s cost effective and can provide professional grade value at a fraction of the normal cost.
I had the opportunity to interview Lee Rosen, and he is a strong advocate of using outsourcing to automate the management process.
Here’s what he says about outsourcing accounting: