Guide_The Legal Firm’s Blueprint

The Legal Firm’s Blueprint:
Building a Strong Foundation

for Success
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Law firms in 2024 are still struggling with profit per lawyer growth. Even as
demand has grown, midsize law firms alone experienced a decline of 5.4% in
earnings per lawyer at the firm. With dwindling cash flow, lawyers must streamline
administrative processes to find more billable hours daily.
This is possible—with the right practice management strategies.
Practice and project management for law firms:

key definitions
Practice management is the operation and administration of your law firm. It
focuses on everything related to the business, including finances, billing, client
management, staffing, and regulatory compliance.
Project management is how your law firm handles individual legal matters or
cases. This encompasses allocating staff and resources for each matter, tracking
the progress to make sure all work is completed on time, and keeping an eye
on costs. Establishing good project management is a key element of practice
management.
Key components of effective practice management

Anything that affects the daily running-of-the-business side of your law firm falls
under practice management. There are the major areas to consider:
Client management: How your law firm generates and converts leads,
the intake process, where you store their documents and information, and
communication about matters, cases, and invoices.
Matter and case management: Matter management helps law firms

stay organized by overseeing all aspects of legal work—both litigation
and non-litigation—across multiple cases and practice areas. Case
management focuses on handling the details of individual cases or
clients, such as creating and organizing documents, tracking deadlines,
and staying on top of client communications.
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Time tracking, expense tracking, and billing: How your law firm tracks
time and expenses for each matter and converts that data into an invoice.
Payments: Includes processing client payments, managing trust

accounts, and handling billing and invoicing for legal services rendered.
9 steps to integrating practice and project management into your

law firm
1. Type out your current processes.
• What are your goals for your processes?
• What works well? What are the areas where you experience bottlenecks?
2. Send them to your staff for feedback on what they find difficult.
• Read through the answers all at once and see which problems are most
common.
3. Set clear goals for what you want to change.

• Determine your key performance indicators (KPIs), the standard used to
measure the success of your goals.
• Share these goals with your staff and keep them somewhere you can see
them.
4. Research and select a legal practice management software that fits your goals.
• Review articles that outline the pros and cons of different options.
• Sign up for demos or free trials of your top choices.
5. Schedule staff training for the new software.
6. Develop a plan for implementing the new software and assign people roles for
the transition.
• Create avenues for ongoing support and resources so people know where to
get their questions answered.
7. Set up templates in the software to establish improved workflows.

• Use a naming convention to keep all templates organized.
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8. Incentivize staff to use new tools through rewards and recognition.
• Share recognition in internal emails or offer gift card raffles to encourage team
members.
9. Make changes as needed—it’s a marathon, not a sprint.

• Ask staff for feedback on the new software.
• Iterate based on the data and analytics to optimize the new solution.
Optimizing legal accounting in practice

management
Accurate and compliant legal accounting is the baseline of running a healthy law
firm. You must keep up-to-date records to understand your profits and expenses,
stay informed, and make the informed financial decisions.
Best practices for legal accounting

Legal Billing
To ensure billing operates smoothly, law firms should create consistent and
streamlined processes. Here are a few best practices to guide you:
• Automate invoicing: Use software to generate and send invoices
automatically, reducing the chance of human error.
• Set clear billing cycles: Define billing schedules (monthly, quarterly, etc.) to
ensure consistency and timeliness.
• Use electronic billing: Offer clients multiple payment options, including online
payment portals to speed up collections.
• Track payment history: Keep an organized record of all invoices, payments,
and outstanding balances in one place to ensure transparency.
Financial Reporting
Accurate reporting helps law firms assess their financial health and make data-
driven decisions. Best practices include:
• Use of real-time financial reporting: Implement software that provides real-
time access to financial data, such as income statements, cash flow, and
balance sheets.
• Leveraging accounts receivable reports: Track which clients owe you
money and how long invoices have been outstanding to manage collections
effectively.
• Monitoring expenses: Generate detailed expense reports to identify where
the firm’s money is going and to spot areas for cost-saving measures.
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Trust Accounting
Trust accounting never rests. According to the American Bar Association, “Lawyers
who are entrusted with the property of law clients and third persons in the practice
of law must hold that property with the care required of a professional fiduciary.”
The ABA defines rule 1.15 of the Model Rules of Professional Conduct. However,
they don’t provide law firms with practical compliance in establishing basic
accounting control systems for their practice. One time-saving way to remain
compliant is for law firms to use legal billing software with trust accounting, with
features including:
• Separate ledgers for trust and operating accounts
• Thorough records of all trust transactions
• Automatic prevention of common mistakes, such as ledger overdrafts and
commingling
• Online payments applying trust funds to invoices
6 steps to optimize legal accounting

1. Use a legal-specific billing software that offers matter-centric approaches and
integrates with your practice management tools
2. Capture time and expenses as you go to prevent leakage.

• Look for mobile apps, like CosmoLex’s On-the-go Capture, to enter time from
any location.
3. Standardize billing processes for your whole firm.

• Create a list of expectations and email it out to each employee.
• Build in time at the end of the month to answer questions from employees
about the new system.
4. Establish clear billing policies to support your processes.

• Set expectations with clients upfront by explaining your billing practices, fee
structures, and payment deadlines.
• Create transparent fee agreements that outline how clients will be billed,
payment terms, and any additional fees.
• Offer flexible payment options to accommodate different client needs, such as
payment plans or alternative fee arrangements.
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5. Choose trust accounting features that allow your firm to stay compliant.
• Download trust reports monthly to double-check compliance.
6. Review processes through financial reporting features monthly to improve

workflows and stop bottlenecks.
• Reports include accounts receivable, accounts receivable aging, billing
history, and matter balance summary.
The importance of efficient workflows in law firms

Whether you’re handling an estate or a divorce case, your clients rely on you to be
organized and meet deadlines. Efficient workflows not only boost productivity but
also improve employee satisfaction and client retention.
Prioritizing key workflows

To ensure billing operates smoothly, law firms should create consistent and
streamlined processes. Here are a few best practices to guide you:
Focus on these three key areas to optimize efficiency in your firm:
• Client intake: Streamline the process of acquiring and onboarding new clients.
• Document management: Organize how your firm stores, names, and
accesses important documents.
• Case progression: Implement consistent workflows for managing legal cases
from start to finish.
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How to optimize your client intake, document management, and
case progression workflows
With these three workflows in mind, follow these best practices to create
workflows that streamline these three important processes through legal practice
management software:
1. Client intake workflows

• Digitize intake forms: Use logic-based online forms to collect client
information, saving time and reducing errors from manual entry.
• Automate follow-ups: Set up automated emails to keep potential clients
informed and engaged throughout the intake process.
• Centralize data storage: Store all client intake documents and data in one
secure location for easy access.
2. Document management workflows

• Implement secure, cloud-based storage so documents can be accessed
remotely by authorized staff.
• Create a standardized naming system for all documents to ensure consistency
and quick retrieval.
• Use software that tags and categorizes documents automatically based on
matter or case, streamlining the search process.
3. Case progression workflow

• Create task templates for each type of case to populate every time you
onboard a new client.
• Set calendar deadlines and automatic reminders for them.
• Tag relevant documents and case-related information to each matter.
• Keep clients updated through client portals or automated emails.
Laying the groundwork for long-term success

To ensure long-term success, law firms need to continuously improve and
streamline their operations. Consider these strategies for building a strong
operational foundation:
• Implement legal practice management software and emerging technologies to
automate processes.
• Track both billable and non-billable hours to get a complete view of your
resources.
• Review financial reports monthly to find areas for improvement.
• Assess expenses and update rates annually to stay competitive.
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Build a strong foundation for success with CosmoLex
The number one cost control strategy for 83% of law firms for 2024 is creating more
efficient processes—and CosmoLex can help. Our fully integrated practice management
solution lets law firms manage their practice, billing, and accounting with one login.
Let us show you how we can help you check off each item from the checklists in this
guide and schedule a demo with our team today.
cosmolex.com | [email protected] | 866.878.6798

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The Legal Firm’s Blueprint:

Building a Strong Foundation

This is possible—with the right practice management strategies.

Practice and project management for law firms:

Key components of effective practice management

Matter and case management: Matter management helps law firms

Payments: Includes processing client payments, managing trust

9 steps to integrating practice and project management into your

3. Set clear goals for what you want to change.

5. Schedule staff training for the new software.

7. Set up templates in the software to establish improved workflows.

9. Make changes as needed—it’s a marathon, not a sprint.

Optimizing legal accounting in practice

Best practices for legal accounting

6 steps to optimize legal accounting

2. Capture time and expenses as you go to prevent leakage.

3. Standardize billing processes for your whole firm.

4. Establish clear billing policies to support your processes.

6. Review processes through financial reporting features monthly to improve

The importance of efficient workflows in law firms

Prioritizing key workflows

1. Client intake workflows

2. Document management workflows

3. Case progression workflow

Laying the groundwork for long-term success

cosmolex.com | [email protected] | 866.878.6798

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