Jack of All Trades, Master of None

March 29, 2022

Can we stop pretending that all of one software is an option for lawyers?

Please wait for it…

Jack of All Trades, Master of None

Slick marketing has led attorneys to believe that they can buy one piece of software and have it run their entire practice. That is a myth; you need to piece the best-of-breed software together.

Lawyers are not the only ones that need to face this reality:

The monolith myth: Why all-in-one tech suites aren’t the solution

Therefore, you must identify what software you need to run your practice and carefully choose what to buy.

There are three main areas of Practice Management Software:

· Back Office: Accounting, Billing, Trust, Time Entry, Expense Tracking

· Document Management Software (DMS): Managing Emails and Documents related to a Matter.

· Front Office: Calendaring, Contacts, To Do’s all linked to a Matter.

A large part of my business helps groups of lawyers leave big firms to form their own practices. They understand the point I am about to make: “No firm over 50 attorneys uses firm-wide, all-in-one practice management software.”

Firms that are this size and larger use legal-specific accounting software, legal-specific document management software, and Office 365.

In the late 1980s and early 1990s, these legal-specific programs were too expensive for smaller firms. There was a significant competitive advantage to working in big law; you could afford all the high-tech stuff.

During this time, a group of “practice management software” companies formed to cater to these smaller law firms. They usually started doing one thing, like case management, document management, or accounting. These companies began building links (integrations) so law firms could have an integrated accounting and document management system. For a time, this model was sustainable because a user license for these products was relatively inexpensive.

Firms would buy several of these products and then link them together. After a series of software acquisitions, the cost of these products increased and it was hard to maintain links on unreliable office hardware.

With the advent of Software as a Service or SAAS, these issues have disappeared.

You pay a monthly cost per user for SAAS-based software. If the software is $50 a user a month, the solo attorney pays $50, and the 100-user law firm pays $5000 a month. It’s scalable and economical.

Since the products are in the Cloud, there is no expensive hardware for the solo attorney to purchase; their cost is only $50 a month.

The old, on-premise software was linked together. These links often failed because of old hardware, electrical glitches, and unpatched software. Now that integrations run in the Cloud, they have become extremely reliable.

After Hurricane Katrina wrecked the Gulf of Mexico Coast, I had to deal with many firms that needed to rebuild their practices from scratch. With limited resources, I had to prioritize what they needed to purchase. Here is the list that has stood the test of time:

1. Back Office

Accounting – You need to track profits and losses and be able to do a Tax Return. If you don’t have this, you can’t have a business.

Time and Expenses – If you are billing hourly, you need to record those entries, and if you are not, you still need to be able to track client expenses.

Trust – You need to have something that understands the rules of a trust (IOLTA) account and helps you avoid committing malpractice.

Billing – You need to be able to create bills. If you are a personal injury attorney, you need to create Settlement statements. These bills should look professional and not like a generic invoice that QuickBooks makes.

Reporting – If I settle a case for $20,000, how much does the client get minus Expenses and Attorney Fees? I have an associate attorney working for me who gets 40% of cases that originate, but only 20% for cases the firm originated. Can I run a report that tells me this information?

Back Office is the most critical piece of software you purchase. You can forgo everything else and still have a successful practice if you get this part right.

Legal back office software is challenging to create. You have to understand different states\law societies’ rules and build something for hourly billers and contingency basis. Since this software is difficult to develop, only a handful of cloud-based legal back-office software is available. Demo everything and make sure your bookkeeping and billing staff are on board. Don’t buy something that looks pretty but also takes two weeks to get your bills out.

Your CPA wants you to use QuickBooks because it’s easier if all their clients use it. QuickBooks is not a good option for most law firms over two people. Buy something that works for your firm, not your CPA’s practice.

Optiable Recommendation: Soluno

2. Document Management Software (DMS)

Many firms use a folder structure on a server or with generic cloud storage services like Dropbox, SugarSync, One Drive, or Google Drive. They crave the convenience of accessing their data easily while outside of the office and being able to do so from any device. These work for about 1-3 users, but once a firm grows, they become more problematic.

A DMS allows you to do the following:

  • Prevent Misfiled documents (which equals “lost” in most cases).
  • Archive inadvertently deleted documents.
  • Monitor who accesses documents and restrict access by user or category of users, client or matter (ethical wall), or doctype.
  • Automatically notify users of the arrival of a new document if it’s relevant to a matter they’re working on.
  • Quickly save emails related to a client-matter.
  • Manage different version of documents (“version control”).
  • Give clients / outside and opposing counsel access to specific documents while keeping an ethical wall around the rest of them.
  • Be able to find that motion that you drafted last July within 5 seconds.
  • Prevent an outside party from stealing all your documents like what happened in the Panama Papers.

Do you need document management software? Yes. You start to outgrow your folder system and need something more substantial quickly. You also need something that helps you organize your emails, and OneDrive does not do that.

Like back-office software, there is relatively few cloud-based, legal document management software, like NetDocuments. It should be easy for your firm to demo all of them and find out what they like.

Optiable Recommendation: NetDocuments

Why not just use DropBox?

I think a lot of the arguments made against the security side of DropBox are ridiculous. I have yet to find one example of an attorney that got into ethics trouble because they used DropBox. However, I know many attorneys who have gotten in trouble in other ways for using DropBox.

Dropbox is a file sync tool that works exceptionally well. Let’s say that you put all your files in DropBox. Now they can be accessed from any device, and you no longer have to worry about backing them up. All is well. Now, lets you hire another attorney to work at your Office. They got sick one day and installed DropBox on their home computer to get some work done. That attorney turns out to be stealing money from the firm, and you have to fire them. The only problem is that they have all of the firm’s files on their own home computer. How are you going to get those files back?

NetDocuments keeps all your documents in their secure cloud, and you only download them when you need them. Once you’re done, they get uploaded again. NetDocuments will send you warnings when someone downloads too many documents.

3. Case Management \ Front Office

The traditional idea for front office software was that you would electronically open a file and see every:

  • Contact related to that matter like a judge, opposing counsel, witnesses, insurance adjustors.
  • Calendar events related to that matter and the ability to make some rules-based calendars like generating RX dates based on the date of the accident.
  • To Do’s related to matters.
  • Phone call communications and phone messages.
  • Documents and emails related to that matter.
  • Notes
  • Time entries

A couple of years ago, we audited all the law firms where we had installed front office software. 90% of them were using it solely for the following things:

  • Time tracking
  • Billing
  • Calendaring

Since those three tasks can be accomplished with Office 365 and back-office Software, it begs the question, why did they need front office software?

Maybe the better question is: if you purchased front office software, would anyone use it? DMS forces compliance by its very nature, so everyone must use it. If you don’t send out bills and manage your accounting, you go out of business, so everyone ends up using the back office software. If you don’t log a phone call in your practice management system, no one makes a big fuss.

Optiable Recommendation:  Centerbase (back office/front office combined) or Clio, which is just Front Office (and a lot more)

How to Proceed

I have seen too many firms attempt to replace their old on-premise back-office software with a cloud-based all-in-one package and then fall on their faces. If you have an old legacy back-office software (PCLaw), replace it with a new cloud-based back-office software (Soluno). If you have an old legacy DMS (Worldox), replace it with a new cloud-based DMS (NetDocuments).

Once you have addressed your back office and DMS needs, your firm can decide if you need any other software.

To help you determine which software to look out for, we have put together a couple of questions that you should ask any legal software provider you are considering:

  • Did the software start as cloud-based or on-premise? Products born in a cloud-based environment tend to work better than on-premise software that has been ported to the Cloud.
  • How do I access the software? Is a remote desktop needed, or can it be viewed in a browser? If you cannot access the program via a browser and you need something like a remote desktop or published apps, it’s not a cloud-based product, and you should avoid it.
  • Is your smallest customer using the same product as your largest customer? The answer should be yes.
  • What was the original purpose of the software? No product begins as an all-in-one package. Usually, it starts as front office software and then adds on document management or back-office functions. If it began as a front office and added accounting, usually its strength is the front office. If you are looking for a front office system, this is ok. It’s not ok if you are looking for a back-office solution or DMS.
  • Does your software work (integrate) with this other package that I like from a different vendor? If necessary, you want the ability to combine different products to create a customized, best-of-breed solution that delivers all the features you need.
  • How do I get my data out if/when I decide to leave your product? Will my data be in a readable format, or will I need to hire a developer to decipher it? Do I have to pay you any money?

Side Note

I take conflicts of interest very seriously.  While I have done many different things in my career,  I now make almost 100% of my income from NetDocuments.  For more information about NetDocuments, Click HERE.