When asked how much your legal practice management software costs, the first thing that comes to mind is likely the licencing cost.
But in the real world, the licencing fee is only one consideration in the multitude of costs that contribute to the actual cost of running your software.
There are three additional costings that firms often overlook when calculating the cost of their practice management software; once you understand these, you’ll have a much more complete understanding of what you’re paying and where you can save some money on your software.
Did you know that a Microsoft study concluded that more than 90% of consumers would consider taking their business elsewhere rather than work with a company that used outdated technology?
Outdated technology can cost SMBs a lot more than a slow boot up
IT costs.
In addition to licencing costs, several costs are related to maintaining your IT systems and services to run your software (especially if you’re running on-premise software).
IT infrastructure costs – cover computers, hardware, servers, switches, routers, firewalls, VPNs, and additional licencing fees.
IT personnel costs – Most firms with five or more fee earners will have some IT support on the payroll to maintain systems supporting their practice management system.These costs scale with the firm’s size and can be crippling between 10-50 fee earners as your firm transitions through those awkward middle years.
IT Security – with every passing year, IT security is becoming more critical, primarily as firms collect more and more personal data from their clients. If your practice management system doesn’t handle security for you intrinsically, you’ll need to invest in a quality security solution that will keep your clients private, personal data safe.
Project costs – This is the elephant in the room anytime I speak with law firms, and this cost often sneaks in under the radar and surprises everyone with how much they’re really spending. Most pieces of legal software have one or two specialists that manage projects and provide assistance when law firms need something simple automated, or integrated. These projects can range from 20k to 100k and are often ignored when it comes to the consideration of how much traditional legal practice management systems cost to run and maintain.
Time costs.
In most industries, time costs can be easily overlooked – however, in professional services industries, where time is billed in 6-minute increments and measured over time as a core KPI, lawyers are more attuned to this cost than other players in the field.
Calculations on how much your firm has lost in billable time from outages, upgrades, updates, training etc., should be an easy calculation for you.
Imagine if you could save each fee earner in your office 10 seconds every time they enter time.
Imagine if you could save 5 minutes for your accounts team every time they invoice a file?
Imagine never having another software outage or update.
You can free up your staff, lower office frustrations and barriers to complete work by simply having software that works.
Opportunity costs.
These costs are harder to pin down, but they exist. On both sides of the fence, it’s as easy to say, “We never lose potential work from being despondent or not following up on leads.” as it is to say, “imagine if we converted 100% of our enquiries into open matters.”
From someone that’s worked in law firm marketing for the last decade, I can tell you that many firms cruise through because they have captive audiences – the client follows up, and the client drives the deal home, but that situation is changing. More choice, greater accessibility even phone and video conferencing for remote clients puts pressure on the “town lawyer” that traditionally represents half the town in all their legal matters at a premium.
Clients expect more, and very few firms are stepping up to that challenge.
The bottom line is if your firm doesn’t have a proper CRM that can tell me enquiries over specific timeframes – report on what stages opportunities were lost and why then there’s a reasonable chance that you’re leaving money on the table and frustrating potential customers with your old school.
Why firms delay updating their Practice Management Systems?
Here are some regular objections we’ve heard:
- Our practise management system limps through; if it’s not broken, don’t fix it.
- You’re unaware of the competative landscape, so you’re not ready to commit.
- Lawyers are old school and have trouble adjusting to new processes.
- Transition to a new way of doing things is too difficult for your team to handle right now.
- Your IT team is focused on keeping your IT running, so they don’t have the time to devote to building new solutions.
- Open files have dropped; we’ll put up with what we’ve got until business improves.
While these issues are all reasonable objections, they also highlight the fact that something isn’t working as intended within your firm. Your software isn’t up to the task, your systems are being held together with tape, or your company culture may be stagnating.
In fact, I’d suggest that if any of these are the excuse playing on your mind while reading this blog, you take the opportunity and talk to someone in the know about legal practice management systems.
There is No one size fits all solution.
Our consultants have worked in professional services and legal industries for years; we’re well acquainted with the competitive landscape and can help weigh up the cost and benefits of your firm upgrading your software. Contact us today to book a no-obligation consultation to discuss your situation.
NebuLAW isn’t going to be the best solution for every firm in Australia – we’re willing to admit that there are firms that may be better off going down another path depending on their needs, and we’d be happy to point you in the right direction based on our observations if that’s the case.
A firms biggest advantage to attracting both clients and staff is their competitive advantage, and today, technology is a core component of a progressive, customer-centric and growing legal practice.
The time to act is now.