Software is Eating the World - Our Advice to Law Firms: Start with e-Billing Software.
In this article, we are going to explore legaltech trends affecting law firms and examples of how you can implement legal software within your law firm to: a) gain market share, and b) grow your law practice and its profits.
The Future of LegalTech
A recent Andreesen Horowitz podcast pointed out a trend that most businesses are already familiar with:
"Businesses are transitioning from the traditional license and maintenance software model to Software-as-a-Service (SaaS), hosted on the cloud."
Originally, the legacy model of investing heavily in mid-office and back-office software systems favored larger organizations, who could easily afford to invest large sums of money into software, which gifted them an unfair operational advantage against their medium and smaller sized peers. This was also felt for law firms, with smaller practices facing difficulty competing against their larger competitors and against client-side legal bill review software.
However, now that software providers are offering many of their products on the cloud, smaller and medium sized businesses (SMEs) including smaller law firms can afford to be operationally competitive against their larger competitors, who now face issues quickly pivoting from license and maintenance models to SaaS, given all the preexisting investment.
How the tables have turned…well, at least for now.
LegalTech Market Trends
The only guarantee in the 21st century world of legal technology is that those who are quick to innovate and adopt value-add operational legal software will gain market share.
Joshua Kushner, CEO of Oscar Health, noted anyone can build a business like Oscar, Instagram, Instakart or any other technology leader. These companies continue to win in spite of their competitor replicas because they set the pace of innovation, which is why R&D investment is key to continued success in a tech-enabled landscape. Moreover…
As the pace of technology development continues to increase, the risk of disruption to all types of businesses will continue to rise. Boards and senior decision-makers must ensure that the financial policies and capital allocation strategies evolve to keep pace with business plans.
This trend isn't necessarily limited to the legal profession, value is attributed by the market to all types of firms that can invest in technology and turn that investment into long term growth:
Source: J.P. Morgan — Disrupt or be Disrupted
In this same report by J.P. Morgan, we find that general corporations decreased R&D spend by 38% between 2007 and 2017, due to investor pressure to provide dividends and share buybacks.
On the other hand, technology disruptors, such as Tesla, AirBnB and Uber, have sweeped competition precisely thanks to this same trend. They are able to invest large portions of their sales back into R&D and product development. Tesla, for example, invested 24% of sales back into R&D. To name a few others, AirBnB invested 47% of sales and Uber invested 77%, just to name a few.
This breakneck speed of investment was ongoing while the average corporation spent only ~6% of sales on R&D, leaving them as "low hanging fruit" for disruptors.
Next Steps with Legal Software
So what does this mean for your law firm?
Well…with legal technology shifting towards web-based SaaS, giving your legal practice a chance at an unfair advantage, and market receptivity to innovative disruption, we'd advise investing in your law firm's operations via SaaS legal software to improve your ultimate product: law firm services.
We're not encouraging unicorn levels of investment, but even deploying 10% of sales into legal software and legaltech spend would put your law firm 70% ahead of the competition.
You can improve your legal operations to either a more cost-effective level than your peers, better than your peers, or both.
We tend to see "both" as the way to go here, and there are numerous areas within legal software for your law firm to target:
- Legal Billing Software: You need to minimize the time you spend e-billing your clients, while maximizing the profit you obtain from your clients, in a manner that's quick and transparent for them to process. We recommend trying our product, Bilr. This system enables your law practice's lawyers to submit LEDES-compliant invoices via speech-to-text or with keyboard on both mobile and desktop, with built-in automatic invoice review to increase your revenue by 6–11%. An attractive feature of this software is that it can also offer your firm's partners an eagle eye view of which lawyers are (and are not) billing clients in accordance with their targets, and compliantly.
- Invoice Review with AI: While timekeeping and e-billing is typically seen as an end of month chore, you should ensure you have built in reporting and invoice scrubbing to avoid losses to your law firm. This also offered within Bilr, which has technology specifically designed to earn your law firm more profits by ensuring no sloppy bills make it over to your client, who will likely use any errors are a chance to extract money from you, which hurts your bottom line.
- Contract Review: All law firms perform contract review in some form, which is intensive in regards to both hours billed and attention span. We recommend looking to software that enables your lawyers to increase their accuracy while taking on more clients, or to enable fewer lawyers to handle the same case load with increased accuracy. A great example of this technology for law firms is LawGeex. If you haven't seen it already, there's a great piece on LawGeex in Vice News' special report on the future of work.
- Other Areas: If you have an open mind to leveraging SaaS for the future of your law firm, we recommend looking at our article on the Future of the LegalTech Marketplace, which highlights additional areas of interest, such as dictation, matter management, case management software, practice management software, and lawyer performance and allocation.
We work with law firms across practice areas, helping ensure satisfied clients and case success. Our law firm management system is fully integrated into our clients' work flow and offers several features within time and billing, but we're not limited to these areas.
If you'd like a consultation on how you can grow your law firm with legal software or legaltech, in general, or with any of the suggested products, please reach out to us at email@example.com for more details.