Is Your Firm a Candidate for Automation?
In a law firm, assessing profit margin is a matter of intangibles. Look at the transaction fee for your Estate Planning work. The Greeks would look at
the entrails of a sacrificial goat for auspices before embarking on any major expedition. Likewise, before embarking on any major
automation purchase, you should look at their billing records. Here are four signs that automation is warranted:
- If your average transaction fee for legal work is greater than that of your competing law firms and you are thereby losing billable work to other firms. Automation can lower your cost-basis for such work allowing you to retain and even attract new work.
- If you are consistently loosing money on a certain type of work, having to write off billable hours, automation will reduce billable hours on such transactions, allowing you to recover your costs.
- If you are consistently exceeding budgets set by clients for particular matters, automation of some of the underlying work can reduce internal costs to bring them within the budget.
- If you have already adopted task-based billing or fixed fees for transactions, look at all processes that can be automated. If possible, try to automate the entire transaction.
ROI on Automation of Estate Planning Document Prep
Estate Planning documents are ripe for automation. A typical will can take as little as hour and as much as several days. However, most clients will
only pay for a half day of work. Automation of document preparation addresses this issue by reducing the "variability" in document preparation time. A simple
will can be prepared in five minutes. A complex estate plan can be drafted in less than an hour, where most of that time is spent in client consultation, and
not actual document preparation.
ROI on Automation of Estate Planning Processes
Running an Estate Planning Practice is really about running a high-touch relationship business. You have hundreds of clients, who can make
demands on your time at any minute. If you are able to solve their issues in a timely fashion, they will come back to you with more lucrative work. In this
environment, an effective case management system can be the difference between one-time clients and repeaters. The Basha Systems Estate
Planning Management System ("EPMS") for Time Matters provides ROI each time a staff member fields a call from a client or prospect. Within seconds of receiving the
call, you or your staff member can have the client's entire file in front of them, be able to give a status report, and enter the clients information
directly into the system. Following the call, you can send out a confirming letter in minutes, and set a tickler to remind you of the appointment.
If you bill for phone consults, in one more click, you can create a bill slip to capture otherwise lost revenue.
15 More Minutes a Day
Let's just give you 15 more billed minutes a day. The reality is that the productivity gains will be measured in hours, but let's for the sake of
argument give you 15 minutes. Let's assume that you bill out at $200 per hour, that you work 48 weeks a year. Take 48 weeks * 5 days * .25 hr. * $200/hr
and you will earn an additional $12,000 per year for each fee earner in your law firm. It will be a little less for paralegals and a little more for
senior partners. So when you are pricing out a system, consider these numbers. With some systems, you will have a full ROI before the end of the first quarter.
A Week of Your Life
What does a week of your life cost you? If you were to sit down with Time Matters and work to get it just the way you want.
Here is a little "lost opportunity" calculator. If you are running a fairly efficient practice, you should be collecting on 35 billable hours a week.
If you bill at $200 per hour, that mean $7,000 in lost billings. If you don't have any work coming in, and little cash reserves, the figure is less.
However, if you currently have real clients, that $2,000 you saved off making a software purchase is now gone forever, And that also assumes that time
you spent on DIY automation will give you the same efficiency gains as the "ready to go" system you could have purchased.
