Moving into the new year, it’s important to have an in-depth understanding of your law firm’s current strengths and weaknesses. A comprehensive audit provides the detailed picture you need to make these assessments and successfully strategize for the year ahead. This post will provide guidance for conducting an effective law firm audit, with a look at five major focus areas.
Area #1: The Legal Billing System
Your legal billing system lies at the center of your law firm’s revenue. Billing inconsistencies can lead to uncompensated tasks, invoicing problems, overdue statements, and deficient profits. To conduct a detailed audit of your law firm billing system, implement the following steps:
- Run a report detailing the amount of time between completed tasks and sent invoices. Identify any lapses and determine their source. For instance, are firm members properly tracking their time? Perhaps you need to implement a more efficient time tracking system.
- Carefully review your accounts receivable report to detail all outstanding invoices. Consider the total amounts owed, the age of the invoice, and client data. Use that information to determine which overdue invoices to pursue in the new year and which ones to write off as uncollectible debts.
- Identify roadblocks in your collection processes. For example, today’s consumer overwhelmingly prefers the convenience of making payments online. If your law firm does not have an online payment option, upgrading your collection technology is a must in the coming year.
Area #2: Firm Expenses
Just as you track every dollar coming into the law firm, properly account for every dollar going out. Review the expenses incurred over the past year to ensure that they have been properly accounted for, organized, and documented. Go into the new year with a clean slate by settling any outstanding debts owed to contractors or service vendors.
This part of the audit also provides a great opportunity to review your law firm expenses and ensure that you are receiving the best prices for products and services. By taking a little time to shop around and compare service providers, you may be able to save firm dollars and maximize profits.
Area #3: Legal Marketing
Your law firm marketing plan not only introduces your firm to potential clients, but it should also persuade them to initiate contact. Without successful legal marketing, your firm can miss out on new clients and valuable opportunities for growth. Here are some tips for conducting a legal marketing audit:
- Use website analytics to carefully review your law firm’s website. Pay attention to which pages perform well and which ones have the highest bounce rates. If potential clients are leaving your website quickly, it could indicate outdated or irrelevant content.
- Analytics also demonstrate how well your online content is performing when it comes to search engine results. If placements are not where they should be, you may need to implement a search engine optimization (SEO) strategy.
- Be sure to gather data about the source of new leads during the legal client intake process. For instance, are most of your leads finding your law firm through your social media posts or are they familiar with a more traditional form of marketing, such as a radio ad? This valuable data should influence the marketing strategies you implement in the year ahead.
- Examine the ROI for your marketing expenditure. Look at how much your law firm spent to implement its marketing plan in 2023 and how that compares to the number of new contacts. It’s also useful to consider how many of these initial contacts turned out to be viable leads.
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Area #4: Client Intake
A successful marketing campaign must be followed by an effective legal client intake process that properly nurtures leads and streamlines the law firm sale funnel. An ineffective intake process may stall your firm’s growth, so it’s vital to look at your law practice procedures to ensure that they are properly performing. Consider these tips for a comprehensive client intake audit:
- Run data reports to determine the amount of time between initial communications from potential clients and follow ups from your firm.
- Determine whether all prospect information is being captured early and accurately.
- Review each lead nurturing strategy to identify the cadence of communications with viable leads. Time lapses could indicate a weakness within the client intake process.
- Calculate the average amount of time between initial contact and conversion. Consider options for shortening it.
- Examine whether the onboarding meeting sets clear expectations regarding the client cases, firm policies, procedures, and fees.
A detailed audit can reveal a lot about your law firm client intake process, including where any roadblocks to maximum profitability exist.
Area #5: Technology
Preparing for success in the new year must include a detailed analysis of your law firm’s current technology. The right systems enhance productivity for greater growth, so it’s important to understand where there may be room for improvement. For example, is your law firm using effective legal practice management (LPM) software? This technology can streamline and automate many of your daily legal and administrative tasks. If your practice is still relying on spreadsheets and outdated calendaring systems, it is past time to invest in an LPM system.
Client Relationship Management (CRM) software for law firms is another important technology to include in your audit. If you don’t have CRM technology in place, you are missing out on a viable opportunity to maximize the entire legal client intake process. If your law firm does currently have a legal CRM provider, review the features and offerings to ensure that they are providing the most up to date innovations.
Law Ruler’s CRM software is providing law firm subscribers with some exciting innovations to further improve efficiency and drive profits in the year ahead. Their new ChatGPT integration and Artificial Intelligence (AI) Email Assistant feature helps law firms streamline marketing and client communication tasks for better outcomes in less time.
Having the latest technology is must for enhancing the client experience and maintaining a competitive edge within a crowded law firm environment. Take the time to closely examine your current systems and invest in new advancements for the year ahead.
Start the New Year with a Comprehensive Law Firm Audit
A thorough beginning year audit allows you to identify current growth blocks within your law firm and address them for a more successful year ahead. To learn more about Law Ruler’s CRM for law firms, click this link for a free demonstration.
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