I get this question time and time again. “I understand that using a faster computer or case management system can save me time, but how exactly does that translate into more money in my back pocket?” Here’s how.
First, let’s take a moment to explain how technology, when used properly, saves you time. ABC Law Firm spends 100 hours per year searching for documents because they have to go to physical, paper files, located in a giant file cabinet and sometimes the files are already checked out. Assuming they stored those documents electronically and saved those 100 hours, and assuming their average billable rate was $200 per hour, they lost out on $20,000 in revenue looking for paper.
In other words, the more time your billable staff spends on non-billable tasks, the less money in your pocket.
Now let’s look how time savings translate into real money.
- When you’re efficient, you take on less risk - Simply put, the less time you spend on a contingency case, the less risk associated with taking it on. If you lose, you’re not sacrificing as much time or revenue. If you win, you’ll make the same amount of money, but since you spent less time on the case, your margins are higher. And, if you win or lose but don’t get paid, you’re out less money.
- When you’re efficient, you can take on more cases – If you can generate a Will twice as fast as your competitor, you can do twice the amount of work, right? When your process for settling civil disputes speeds up, you can twice as many disputes. In essence, the more time savings you experience, the more availability you have to generate revenue, and the more revenue you can generate.
- When you’re efficient, you can spend more time on client-facing activities - I get it, just because you have more time in your day doesn’t mean you’ll necessarily have clients running to your door asking for your services. But it does mean that you can do more indirect revenue-generating activities. Spend your new-found time meeting people, creating stronger relationships with your clients, and building value in your firm. Try to drive in new opportunities from your current client base (maybe they didn’t know you take on divorces). Did you know that once you have a client, each subsequent sale has a close ratio of over 70%? It’s easy money!
- When you’re efficient, you can spend more time with family – Okay, you have all this extra time but still no overflow. Go home and teach your kid how Call of Duty was meant to be played! I like to call this ‘putting equity in your family’. After all, isn’t that why you work so hard in the first place?
- Saving time and generating more revenue has a rippling effect – The fact remains that if you can sell more goods and services in less time than you currently do, you will be more profitable. That extra profitability it helpful because it gives you options. You can put that money back into marketing and start driving in more business, lower the price of your services and start outcompeting other law firms, offer pro-bono criminal defense to the indigent, or simply keep the extra profits. No matter what you choose, at least it’s your choice now.
For the record, the simple act of purchasing the technology won’t do squat. It’s how you USE it. So if you’re going to invest in a practice management program, don’t just use it as a glorified calendar. Take the time to get properly trained. These systems are more powerful than you realize. Did you know that Time Matters can also double as a document management program? Chances are, there’s one tool that can simplify 5 -10 time-consuming tasks at your law firm. Imagine the cost savings and the increase in profits!