Competing With Larger Firms? There’s an App for That

Small and mid-sized law firms have their work cut out for them.  Over the last several years, most large law firms have created internal R&D departments to increase efficiency and improve the delivery of their services.

However, small and mid-sized firms most often simply do not have the budget for such efforts.

Quite the contrary, lawyers who manage their practices by themselves have the unenviable task of balancing the administrative aspects of running a business with demanding responsibilities of maintaining high-level advocacy for their clients.

As a result, and in many cases, the managerial side of the practice becomes neglected. This can cost even smaller law firms hundreds of thousands of dollars in lost revenues over the long term.

Conversely, lawyers who are diligent in managerial duties – such as cleaning up and preparing their billing records before invoicing their clients — may end up spending so much time on them that they fail to adequately serve their clients or make efforts to grow their business.

However, there are plenty of ways to optimize efficiency and increase revenues without a huge R&D budget.  In fact, several new software applications can significantly increase profits and productivity in small and mid-sized firms.

How to Optimize Revenue in Smaller or Mid-Sized Firms

Increasing law firm revenues can often be achieved by improving operational efficiencies.  Here are four different operational improvements to consider:

1-  Understand Where Your Revenue is Coming From

To optimize your revenue streams you must first understand where they are coming from, including what types of clients and matters are producing more profits per billable hour.  

This allows you to get an overview on which are most likely to net your practice the best income in the future.

Identifying which cases net higher profits can also help you better target your marketing efforts based on the characteristics and types of legal issues, to optimize your marketing expenditures and time spent looking for new business.

2-  Be Diligent On Your Billings

Most lawyers have a bad habit of being slow with submitting their invoices. Sometimes this goes as far as to defer the billing for completed work after established deadlines, thereby jeopardizing revenue streams.

3-  Brush Up On Your People Skills

Most law firms agree that revenue growth usually comes from providing more services to current clients. In today’s digitally connected world, people can communicate and share their thoughts 24/7 through the internet and social media.

It is because of this that word-of-mouth referrals and advertising has become an important growth factor for law firms. This is especially true for lawyers who are practicing in smaller and mid-sized firms.

The benefit of word-of-mouth referral is that law firms do not need to spend as much time or money attracting new clients. Prospective clients attracted via word-of-mouth already view the practice in an optimistic, if not favorable light.

This gives you more time to bring in other clients or focus on improving your client service.

Delays in invoicing clients can also potentially impact your relationship with your clients negatively, ruining your chance for referrals or repeat business.

It is always best practice to keep your billing records accurate and up to date, in order to more easily bill your clients on time

Diligent timekeeping and tracking on your billables can be time-consuming, laborious, and repetitive. That is why most lawyers tend to procrastinate. To make matters worse, this process is also prone to errors if rushed.

  1. Enforce On Your Collections

Your revenue stream is the lifeblood of your business and practice. That is why it is crucial for lawyers to clearly specify their terms and payment rates to their clients, especially the collection date for dues and billables

It is often a good practice to extend some leeway to clients on the collection of their dues as a way to improve your business relationships or extend courtesy to recurring clients.

However, extensions on payment due dates should not be the basis on which your business relationships are founded. Being too lax with your collections and payment can also be a tension point for your client if they have grown accustomed to your practice’s passivity, negatively affecting your relationship and risking future business.

Delays in payment can also have drastic impacts on your law firm. Worse, you may incur late penalties on your own overhead costs, such as office space rental. This excessive leniency can cascade into a major drain on your revenue when it’s supposed to be the very source of your income.

Although these methods are practiced by successful law firms with substantial administrative staff, the challenge is to scale the practices and apply them to law firms of any size. 

Furthermore, they will likely require some triage to implement while still have enough time to provide excellent services to clients.

How Automation Can Further Optimize Your Revenue

Increasing operational efficiencies can help increase your revenue, but doing so can be time-consuming and challenging.

There are a number of software applications that help law firms optimize their revenue by automating crucial tasks like billing and invoicing. 

Through automation, lawyers are free to focus on marketing for more business or spending time away from work, not to mention improving the quality of legal services delivered. 

Providing better billing and legal services both result in happier and more satisfied clients, who in turn are more willing to hire your law firm again and refer you to their contacts.

1-  Billing Automation

In addition, several legal apps help lawyers automate their billing and allow them to optimize their revenue while maximizing their profits. 

This is accomplished by automating non-billable work like billing review.  

The applications allow attorneys to better allocate their time on tasks more demanding of their attention. Moreover, billing automation also helps reduce human error and improve transparency.

With clear, accurate, and standardized billing, the time spent on billing review should plummet.  A shorter billing review period means faster payment. Combine this with fewer disputes and the window of invoice delivery to payment should dramatically decrease. 

Theoretically, the faster you get paid the stronger your revenue stream can become.

2-  LEDES Invoices and Billing Codes

Many lawyers representing institutional clients are familiar with electronic billing, the Legal Electronic Data Exchange Standard (LEDES) invoice format, and tasks and expense coding requirements using the Uniform Task-Based Management System (UTBMS) or similar systems.

Several applications automatically enter these codes instead of relying on clunky dropdown selection interfaces. 

This serves to increase transparency in transactions, mitigate human error, and comply with best practices in categorizing billable hours and tasks.

3-  Budget and Time Tracking

Getting help managing their budgets helps lawyers to more efficiently meet client expectations and requirements, while also improving efficiencies within the law firm.

Automation software provides lawyers with the ability to keep track of budgets and improve compliance at the same time.  Moreover, these applications work in real time, notifying law firms of any problem ot potential issue before it’s too late.


The challenges of balancing between providing services to clients and doing non-billable managerial tasks like invoicing and collections are significant. This is especially true for lawyers who are practicing in small and mid-sized law firms.

However, as large law firms are discovering as they roll out their own internal applications, automation software and tools provide lawyers a cost-effective and scalable way to automate the non-billable tasks of running their business.

These applications help lawyers optimize their revenue by reducing manual overhead, error-free invoices, and prompt invoicing of billable hours.