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Clients demand better price performance from their suppliers, including their lawyers. This puts increasing pressure on law firms not only to respond to client needs, but also to become more efficient from a cost and operational standpoint. Consider for a moment all the diverse procedures involved in the operation of a law firm (or, for that matter, a law department). In addition to all the “front office” activities for clients, there are multiple “back office” activities. Fortunately, computer software systems are available to handle most of these processes. Unfortunately, most of these systems are not integrated, which greatly reduces efficiency and the ability to control accuracy. Let’s look at the efficiency part first. In the legal software world, there are: • A docket system to handle scheduling and appointments. • A litigation support system to locate document information. • A time-and-billing system to produce bills and track money owed to the firm by clients. • An accounts payable system to pay vendor invoices for internal and reimbursable client costs. And on and on. This makes for a replication problem. Because one system does not work with another, each needs to have its own set of client, matter, and attorney codes. Whenever a new matter is opened, it must be entered into each separate system. Instead of maintaining one system, the firm could be maintaining 10 separate ones! The control problem may be even larger than duplication of effort. The more steps required to get information into the database, the greater the possibility of error or that data may be lost or misplaced. Suppose that a firm enters incoming invoices (witnesses, filing fees, deposition expense, etc.) in one department and assembles the reimbursable invoices into a folder for another department to enter. There could be thousands of dollars of expenses the firm actually paid that were never re-entered into the client-billing file. Many systems have developed interface procedures to get information from one system to another. This works well in infrequent situations, such as monthly payroll, but less well in a constantly repeating environment. Even with system interface, someone may lose data or forget to perform the interface operation. ENTRY BY TIMEKEEPERS The trend toward having attorneys and paralegals put in their own data directly is a healthy one. Because they are “closer to the action,” they eliminate the duplication of effort as well as errors due to misinterpretations. But busy timekeepers cannot be expected to enter data and information more than once. Requiring attorneys to do redundant and multiple entries greatly complicates what should be a routine operation. Without question, the ideal situation is an integrated system, one that works the same way people actually think and work in real life. There should be only one central database, so that master information (new matters, timekeepers, etc.) needs to be entered only once. Here are some of the applications that can and should be integrated. • Vendor invoices. Invoices come into the firm and some of them are chargebacks that should be billed to the client. Both steps can be performed at one time. Integrated accounts payable makes so much sense, especially in a law firm, where trust and retainer transactions are so common. Yet the majority of firms have not adopted this practice. • Cash received. Most software does a decent job of entering and tracking incoming bill payments from clients. The incoming information gets put in the proper bank account and the client’s owed amounts are reduced. Law firms, however, are unique in the way they handle different situations. Handling of trust receipts, for example, requires special processes to ensure the incoming cash is also credited to the appropriate client and matter. General purpose accounting software cannot do this automatically. Software that combines the receipt with trust case tracking eliminates the extra step. And when an overpayment situation occurs, software should automatically add the overpayment as a credit on the next billing process. Otherwise, the overpayment has to be manually tracked, then submitted to accounting, where a check is issued. • Billing credit. When attorneys are compensated or evaluated based on how much cash they generated for the firm, software can do this automatically, eliminating a paperwork and control nightmare. • Conflicts. A law firm has a responsibility to ensure that a new matter does not create a conflict of interest with a current client. A large percentage of firms handle this manually; others may not handle it at all or put the information on a subsidiary system. It seems incredible that firms would play so “fast and loose” with a potential malpractice problem. Good software should handle this process automatically: When the new client and matter are entered, a quick search cross-checks client companies and individuals for potential conflicts. • Calendars. This is another critical aspect often handled in a subsidiary system. Many firms utilize a system such as Microsoft Outlook to track both firm-related and personal date commitments. But Outlook, popular as it is, cannot handle the unique situations that law firms require, such as continuances, reschedules, notification, covering attorneys, etc. The ideal software is accessible by matter, for matter-related deadlines and events, as well as by attorney or firm, for business development or social events. This information can then be directly linked to Outlook. • Documents. A document system has two main functions: producing and tracking. These are a significant part of what law offices do. Word processors have greatly simplified the painstaking task of assembling phrases, dates, addresses, and other information into a document. Yet integrated software can provide (1) automatic document merging, using date and selection parameters to determine what documents to produce, and (2) master information already stored in the database to determine what variables to place in the document. Moreover, the software can add the actual internal cost of assembly into the client cost file for billing purposes. Once the initial parameters have been set up, the firm saves a tremendous amount of time and costs, and gains a built-in control system. The second aspect of document software involves the tracking process itself. Being able to see at one’s fingertips all the documents that have been sent and received is of real benefit to those attorneys managing the case. Using search parameters (e.g., all documents written by Alladin involving negligence), the case manager can quickly locate relevant information. With new trends in imaging techniques, the relevant documents can be found and then displayed and printed from the computer system. Most of the functions described above are available as individual systems. The integration of these functions into a single, easily controllable set of tools is the next step. Peter Riesberg is president of AdvantageLaw Inc., a provider of legal accounting and management software. He can be reached at (800) 543-3185 or [email protected].

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