Click here to read part 1 of this column looking at the results of MyCase’s 2021 legal industry report.
Legal software increases productivity
One of the biggest roadblocks that survey respondents reported that their firms face is law firm efficiency, which is a challenge for 86% of law firms. The good news is that the report’s data shows for many lawyers, the software tools I’ve covered in this column help to increase productivity for their firms significantly.
For example, I wrote about document automation in February of 2021, and 54% of respondents shared that their firms take advantage of this type of software. Of those, 35% saved more than 15 minutes every time a document was created. Another 16% saved 11-15 minutes, 29% saved 6-10 minutes, and 20% saved 1-5 minutes.
Document management software, which I wrote about in this article, is also a timesaver for law firms, with 66% of respondents reporting that their firms have document management software in place. Of the firms that relied on document management software, 94% found it somewhat or significantly easier to locate documents as a result.
Secure and streamlined communication is also important for law firms, and as I explain here, client portals are increasingly being used by law firms to facilitate improved client communication. Predictably, the top communication method chosen by the legal professionals surveyed was online client portals, with 68% of firms using them. Portals saved 14% of firms more than 10 hours each month. Another 19% saved 6-10 hours each month, and nearly a third (29%) saved 1-5 hours each month.
Technology adoption improves profitability
Next up, law firm finances. According to 80% of the legal professionals surveyed, another top challenge firms face that cloud-based software helps to address is law firm profitability, and for 74%, law firm growth is also a key hurdle for their firms. Given those statistics, it’s notable that the survey results offered convincing evidence that legal technology adoption can significantly improve the financial friction law firms encounter.
I wrote about the benefits of time-tracking software earlier in the pandemic, and the survey findings provide further proof that this type of software helps to improve the bottom line for law firms. The survey results show the vast majority of law firms use time-tracking software (81%) and that doing so pays off: 9% captured more than 15 hours each month with time-tracking tools. Another 8% captured 11-15 hours, 17% tracked an additional 6-10 hours, and 21% added 1-5 hours.
As I explain in this article, legal billing software is essential for most firms. This is because—as the survey respondents shared—the legal billing process can be unnecessarily time-consuming. The top billing struggles identified by the survey are 1) time-consuming invoice creation (52%), and 2) difficulties with reconciling trust accounts (47%). Because of the many billing challenges encountered, 87% of firms use legal billing software, and the time saved each month is significant: 8% of those surveyed saved more than 15 hours each month, 9% saved 11-15 hours, 21% saved 6-10 hours, and 26% saved 1-5 hours.
Another billing challenge law firms encounter is getting paid, which is why I also wrote about online payment tools. The survey results showed that the vast majority of law firms (77%) solve this problem by allowing clients to pay online using ACH or credit cards. According to the legal professionals surveyed, doing so resulted in increased collections, with more than half (61%) of respondents sharing that their firms collected more money because of online payment processing software, with the breakdown showing that 36% collected “somewhat more money,” and 25% collected “significantly more money.”
Software adoption drives law firm growth
The survey results also indicated that another top challenge law firms encounter is getting clients, with the majority of legal professionals (68%) identifying it as a key hurdle. The good news is that legal CRM, or Customer Relationship Management software, which I wrote about here, streamlines this process.
The survey respondents were asked about a number of different CRM software features and the time-savings that resulted when these tools were used. Lead intake form usage was addressed, with 42% reporting that their firms used online lead intake tools. The respondents said that online lead intake forms increased the number of monthly leads with 35% capturing 1-10 more leads each month, 13% capturing 11-20, and 6% capturing more than 20.
Another popular CRM feature was lead tracking, with more than half (53%) of firms using lead intake management software. Of those respondents, 20% reported that their firms saved 6 hours or more each month as a result, and another 32% saved between 1-5 hours each month.
eSignature software also increased in popularity due to the social distancing mandates of the pandemic, and as a result, 79% of legal professionals surveyed reported that their firms used eSignature tools. Of those firms, 67% saved time as a result, and 28% saved 6 or more hours each month.
The future looks promising
Another area of focus in the report was whether the software investment by law firms was worth the time, effort and expense. Notably, the majority of respondents shared that their investment in cloud-based remote working software was beneficial, with 73% indicating that the remote working tools their firms invested in had increased productivity. Another 80% reported that remote working tools were part of their firm’s long-term business continuity strategy. Finally, the survey respondents reported a favorable outlook on the future, with more than half (59%) expecting their firms’ revenue would increase in 2021.
As you prepare your firm for the year, you’ll need to take into account the continuing effects of the pandemic and ensure that you build resiliency into your law firm. That way your firm will be able to survive and thrive, whatever the year may bring. In other words, there’s no better time than now to build a foundation for long-term success by investing in key software tools that will ensure business continuity during the pandemic and beyond.
Nicole Black is a Rochester, New York-based attorney, author and journalist, and she is the legal technology evangelist at MyCase, a company that offers legal practice management software for small firms. She is the nationally recognized author of Cloud Computing for Lawyers and is co-author of Social Media for Lawyers: The Next Frontier, both published by the American Bar Association. She also is co-author of Criminal Law in New York, a Thomson Reuters treatise. She writes regular columns for ABAJournal.com and Above the Law, has authored hundreds of articles for other publications and regularly speaks at conferences regarding the intersection of law and emerging technologies. Follow her on Twitter @nikiblack, or she can be reached at [email protected].
This column reflects the opinions of the author and not necessarily the views of the ABA Journal—or the American Bar Association.