Key Highlights:
- Sound financial management is the key aspect for the success of any law firm
- Successful Law firms have been focusing on technological innovations to improve their efficiency
- Cloud-Based solutions have helped these tech-savvy firms to survive during the pandemic
Impact of the Pandemic on Law Firms
Sound financial management has always been the foundation for every law firm to maintain its operations and long-term business health. Over the years, Law firms have adopted a wide range of strategies to continue their operations and manage their business.
However, during the pandemic, some firms fearing a stark drop-off in demand, began cutting costs everywhere they could, including legal spending. Because of the pandemic, firms were forced to perform their operations using innovations that required supporting a remote workforce, finding alternatives to in-person meetings, and adjusting to the needs of concerned clients.
Top Pandemic Performers
Some firms successfully managed their businesses even after facing such tough challenges. These top-performing firms had already been spending more per lawyer on technology even before the pandemic making the transition easy. It has been observed that businesses and organizations that were more tech-savvy, survived and functioned better.
The recently released 2021 Pandemic Performers report from the “Thomson Reuters Institute” indicates that firms who exercised better ‘financial hygiene’ saw better growth.
The report identifies ‘Pandemic Performers’ or ‘Top Performers’ in revenue per lawyer (RPL) growth, and financial hygiene, encompassed several key financial indicators including worked rate growth, strong billing realization against the standard and agreed/worked rates, and less discounting through to billing.
Cloud-Based Solutions
Investing in cloud-based solutions was the key factor for the success of the firms. Legal professionals who worked in back-office roles found it difficult to connect to on-premises solutions via a virtual private network (VPN) connection for financial management, matter management, and related functions. They provided limited functionality and slower response times.
After implementing cloud-based solutions, these users had seamless access to information and full functionality at great speed. They were able to easily and securely access financial client, and matter information even at remote places. Some of the most resilient firms had also invested in robust financial and practice management solutions.
These cloud-based practice management systems helped firms to streamline many routine tasks and processes thereby improving their productivity and profitability. This single solution enabled firms to centralize their functions and manage their business efficiently.
