Sally Kay was the Law Society s Information Technology Adviser until 2003.
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1 Legal Technology: A What, Why and How of Practice Management Systems By Sally Kay Sally Kay was the Law Society s Information Technology Adviser until The current Information Technology Advisor can be contacted at the Law Society, 170 Phillip Street, Sydney 2000, DX 362 Sydney, phone (02) , fax (02) , itadvice@lawsoc.nsw.asn.au.
2 Introduction Practice Management Systems ( PMS ) are commonly known as legal accounting systems, but most PMS encompass far more than that. While legal accounting is the foundation of PMS they are often now designed around a central database of client and matter records, combining financial management with broader business management functions. Additional features will typically include time capture, automated billing, management and financial reporting, document production, safe custody packets and marketing. The scope of this article is to survey the PMS available in NSW and provide a guide for those considering changing their current PMS or buying their first one. The survey of companies offering PMS does not imply endorsement or recommendation of any of the products. Companies known by the Law Society as having a PMS product were sent a letter asking them to respond to a series of questions about their systems.
3 Why use a PMS? The use of a PMS can improve the following areas: Administration of a firm s trust and general accounts. Productivity to gain efficiencies from added features such as time capture and automated billing. Analysis of the performance of fee earners, the profitability of different work types and the overall health (or otherwise) of the business.
4 Preliminary considerations Do I have to have a PMS? No, you don t. Depending on the size of the firm and the nature of the practice, it may not be appropriate to have one at all. This will be an individual business decision. If you are thinking of seeking Best Practice accreditation a number of the reports required by that program (for example WIP, debtors, client mix, and practice areas) are easily produced by a PMS. What platform (Mac or PC) do they run on? Most PMS do not run on the Mac platform. You will need to check with particular vendors that their systems run on the Mac platform, and if so, what their operating system requirements are. Which one is suitable for a firm my size? Most of the PMS are suitable for firms of all sizes, though some will give special deals to small firms and others start with a minimum of 15 fee earners. Most of the vendors offer discounts by negotiation for sole practitioners and small firms. You will need to check with each of the vendors. Will the Law Society recommend that I buy a particular PMS? No. Each firm s requirements are different. The IT Adviser is happy to talk to you about your firm s particular requirements. It is recommended that you seek further information from particular vendors and feedback and references from firms of a similar size and type of practice to your firm. The real test of software is how it performs in practice, not how good it looks when it s demonstrated.
5 What does Law Society certification of the trust accounting mean? The Law Society assists its members by undertaking, at the request of a vendor of PMS, an examination of trust account and controlled money software. This examination is not compulsory, and only relates to trust accounting and not office accounting or other features and functions that are part of legal practice management systems. You should ask to see the Certificate that was issued by the Law Society, which will note any qualifications or exemptions. If you are considering purchasing a PMS whose trust accounting is not certified by the Law Society, it is advisable to obtain a written assurance from the vendor that the version of the product you are considering purchasing complies with the Legal Profession Act 1987 and regulations. Will we need to upgrade our hardware? The vendor should provide a list of the minimum hardware specifications needed to run the PMS both on the server and the client (workstations). It is worth noting that there can be a big difference between the minimum specifications and the recommended specifications. Part of the sales process will be to discuss your existing hardware with the vendor and seek their advice as to whether it needs to be upgraded to run their software.
6 Features The majority of the vendors of PMS offer full trust and office accounting and the following features which are common to all (with variations): Client/matter database Enquiries Financial and management reports Time entry Automated billing Cheque, receipt and file label printing Archiving Controlled money Safe custody packets Matter tracking (or workflow) Upload of photocopying and fax data Document production Marketing features Branch office accounting Two of the vendors, Amicus Attorney and Timeslips offer time and matter based reporting which can be linked to legal accounting systems.
7 Most important features The client and matter database The core of PMS is the client and matter database. Firms are beginning to realise the power of a database both from an efficiency and marketing point of view. The marketing aspects of PMS software have become very popular recently as firms realise the potential of the captured data. For example, a firm can perform a search of all wills in their safe custody packets that have been there for more than five years and send a letter to those clients asking them whether they would like to make an appointment to update their will. Reporting Being able to produce reports that cover both a fee earner s performance, the number of files opened in a given period, WIP, debtors and profit (to name a few) will greatly assist the smooth management of the firm. Time entry and billing Almost all of the PMS vendors surveyed reported that their most popular feature and the one that resulted in the most productivity gains is time entry and billing. These are often referred to as real-time time entry and automated billing. Realtime time entry means that fee earners enter their own time directly into the computer as they are doing the work using time entry descriptions that are customisable. Various PMS vendors estimate that there is an increase by as much as 20 per cent in billable time as it is much easier to capture those missing phone calls. When it is time to bill a matter, the fee earner is able to select the format of the bill that he or she wishes to produce and then the program will automatically produce the bill. Firms often estimate, depending on the type of work they do, that it takes up to two days per month to produce bills. Using automated billing should reduce this to a matter of hours.
8 What to do when you decide you want to buy a PMS There are many advantages to running a PMS but there is a substantial continuing investment both in money and expertise. The system needs to be carefully chosen and implemented and constantly monitored to ensure that the firm is making the best use of it. I have dealt below with the seven stages required to select, implement and manage a PMS. It is vitally important, both in the selection, implementation and continued running of the system that key staff are involved in every step of the process. They are the ones who are familiar with the firm s business processes, what needs to be improved and they will be the ones who will use the system, so their enthusiasm is vital for the successful running of a system. Define Define what the firm and its fee earners require from a system. It is important here to analyse existing work practices in the front and back offices, devise a strategy to improve them and then work out how a PMS will aid that improvement. Avoid implementing a PMS that will merely automate your existing manual procedures. It will probably be the case that you want to solve certain problems the firm is having such as the imperfect capture of accounting data. It s important though, to look at other areas of the business that could be improved. For example, it may be that fee earners appear to be working long hours but not capturing much time. A PMS with the feature of easy capture of time by fee earners themselves could catch some of the billable hours that fall between the cracks. Another area is billing. How much time per month do fee earners and support staff spend manually producing bills that could be produced automatically by a PMS from the time and disbursements already captured by the PMS? Of course it s important to keep in mind that a PMS is not a universal panacea and is only part of your general IT and business strategy. Involve your staff as much as possible in the preliminary planning. It may be that you are not aware of some of the problems that various sections of the firm are dealing with that could be improved.
9 Prepare a budget that will take into account whether you require any hardware upgrade to run the new system. Also make sure you take into account the hidden extras, such as network cabling, training and annual maintenance fees. Investigate Visit Law Society Online at and click on Products and Services to see a list of the vendors of PMS. Talk to other practitioners who have similar sized firms to gather information about the systems that they are using and if they have any recommendations. The information you gather here may have to be taken with a grain of salt because some firms will have negative experiences from PMS that may be partly due to their own limitations. Contact the vendors from whom you require demonstrations. Talk to them about the firm s requirements. Make sure they understand the nature of the firm s practice and business so they can give a demonstration that is particular to your business needs. Once you have a shortlist, arrange further demonstrations and ask the vendors how they and their systems will cope with your specific requirements. Visit at least three firms (preferably of a similar size to yours) given by the PMS as reference sites. Talk to the staff actually using the software to gauge how it is working in the firm. Find out particularly what the support from the PMS company is like. How long is it before a call is dealt with? Visit the offices of the vendor to meet their staff to get an idea of what the company is like. Do you feel that if you called them with an urgent problem at 4:30 on a Friday afternoon they would drop everything to help? Decide Enter into negotiations with the company whose product you have decided on. The company will provide you with a quote which should cover at least the following: Licence costs Ongoing maintenance charges Implementation costs Training
10 Data conversion Recommendations regarding upgrade to existing hardware and software. If the version of the PMS you have decided to buy isn t certified by the Law Society as complying with trust accounting regulations get a written statement from the company guaranteeing that the version you will be using complies with the trust accounting regulations of the Legal Profession Act Plan An implementation will only be successful if it has been well planned. Appoint someone from your firm to manage the project on your firm s behalf. The PMS company will appoint their own project management team and will produce a detailed project plan for you which should take into account: conversion or takeup of existing data, resource planning, testing, training, customisation, rollout and a go live date. Be realistic about timing tasks (especially when they involve computers) will always take longer than you expect. Implement This is the most difficult part of the exercise. Expect things to go wrong. However, if you have planned well and involved your staff at every point in the process, you will probably be able to overcome any hiccups along the way. Review and Manage Managing a PMS is an ongoing process. New staff need to be trained and patches and upgrades have to be incorporated. It is a good idea to meet regularly with the account manager of the PMS company to address any problems that arise. Join the users group if there is one. Keep up-to-date with upgrades so that you don t fall behind. If you leave it too long, an upgrade can be a traumatic process not unlike a full implementation. A well-implemented Practice Management System can be a valuable tool both in improving productivity and increasing revenue. Selecting, implementing and managing a PMS is a large and continuing investment and should not just be seen as a back-office product, but as an integral part of your practice management strategy.
11 The list of vendors of PMS are listed at Last updated May 2003
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