In recent years, there have been massive strides in business solution technologies that mean law firms no longer have to rely on data from static, clunky spreadsheets for critical decisions. Law firm management best practices these days require that the information coming from your back office is accurate, timely and easy to interpret. While this shortens your month-end close time, it also allows you to better leverage your data and chart the right course for your firm in ways that extend beyond typical accounting matters.
Here are three critical areas where having access to better financial data can help you make more informed decisions that improve your firm's overall financial health.
Do you currently have a good handle on which of your clients are the most profitable for your firm? If not, you're driving blind. Having on-demand access to reliable client profitability metrics allows you to allocate your internal resources more effectively. If an important client is beating you up for a big discount or threatening to shop your work around to other firms if you don't play along, you'll want to know how much margin you might have to work with, if any.
Perhaps you are trying to attract a lateral in a growing practice area and aren't quite sure what to offer. Or you're paying out annual performance bonuses and want to make sure you're rewarding the right attorneys for the right reasons.
For many small to mid-size firms, arriving at these numbers can be daunting. But, it doesn't have to be. With reliable, real-time access to hours worked, billed, collected and more, you'll be much more confident about your firm's compensation methodologies and how well they align with your established values.
Is there a new practice area you've been thinking about breaking into or expanding upon further? Or, perhaps you're thinking of setting up an office in a new and promising geographic market? Then it behooves you to have a solid handle on your firm's current financial position and key performance metrics.
When you can see this information in real time and have reliable, intuitive data to share, you can build consensus more easily with your peers. The power of having the right data translates directly into both your peace of mind and the collective buy-in about your firm's strategic decision-making process.
Better data leads to better decisions. It's really that simple. Charting the course ahead gets a lot easier with the right analytic tools at your disposal.
If you would like more information or need assistance with improving your firm's back-office operations, visit our Analytics for Law Firms pageto learn more about our analytic tools or contact our Law Firm Services experts.
