Purchasing Practice Management Software - Things to know before the purchase

Purchasing Practice Management Software

Things to know before the purchase.

When selecting new software, a firm will inevitably turn to another firm and ask which package they use. This is partly because it is the easiest way to select a package and partly because the firm doesn't want to be the only one to make a mistake. While this is certainly a good first step, there are pitfalls to the "copycat" approach. One assumption is that an honest opinion would be given by the other firm. Unfortunately, pride can lead to uncertain recommendations. How many people are willing to say to a colleague "I made a huge and costly mistake that I am still living through"? In addition, even if their software is adequate for another firm or user, this does not mean it will work well within your firm.

When purchasing a practice management system, a firm should first look inwards, rather than outward. It is important for an office to meet the following objectives:

Identify and define your practice's needs

1. Identify the problems practice management will solve help you solve
2. Be realistic of your goals and expectations
3. Budget your time and money
4. Get everyone on board

Every firm is different thus it is important to get a clear understanding of your firm's unique dynamics. Once there is a grasp on the firm's dynamics, it will become clearer which software package is most appropriate.

Identify your practice

The first step is identifying all areas of law practiced by your firm. One common mistake here is typically the decision to implement a new piece of software will be spearheaded by a single attorney or a small group of attorneys. Their focus may solely be on their particular area of practice, and they may not take into account the needs of different departments. Some practice management software packages are very specialized. If the firm's only area of practice is bankruptcy, then purchasing bankruptcy-specific software is often the better choice than general practice management software that would need to be customized for bankruptcy. However if the firm practices bankruptcy and real estate, then purchasing bankruptcy-specific software would be unacceptable to the real estate department. Clearly defining the needs of the entire firm, and not just one area of the firm, is critical to the successful implementation of practice management software.

A less obvious point that should be taken into consideration is how many offices you have or will have in the foreseeable future. With today's technology, firms of all sizes are setting up multiple offices. Real estate firms are reaping the benefits of opening more than one local branch, while litigation firms may spread to another state or even another country. The location of additional offices can play a vital role in choosing a practice management software package. Most practice management systems are designed to be one integrated database utilized by the entire firm. This means practice management systems are often located and operated from the main office. If multiple offices will be using the software, you should investigate whether the software is capable of handling the complexities involved with multiple offices. Issues such as will the calendar work in multiple time zones must be taken into consideration.

What problems is the practice management software to solve?

Practice management software has been a hot topic for the past few years. Law firms are told they must have it, but may not have a clear understanding of what it will accomplish for their firm. Often your only clue on the purpose of this software is in the name - it is supposed to help them "manage your practice". But, do you understand how it will accomplish this? The main purpose of practice management software is to increase the efficiency of the firm and help maximize the productivity of everyone in the firm. Every type of practice, whether it is hourly, flat fee or contingency fee, should look closely at the efficiency of their practice and identify where they can improve.

Some specific examples are discussed here, but everyone should go through this exercise and identify their own issues.

Those who bill by the hour will often find they have to write down or write off fees every month. While some write-downs or write-offs may be inevitable, it is easy for a firm to allow this number to grow beyond what is acceptable. By identifying the reasons for write-downs and write-offs, a firm can work to eliminate one of the most noticeable for lost revenue and productivity. Practice management software can aid in providing the necessary information to identifying this drain on billable hours.

In flat fee and contingency cases, the ideal scenario is to work the minimum number of hours that will produce the high quality service and results the client expects. One way to speed up productivity is to implement a practice management software package that automates work flow and document production. The helps keep people organized and focused on the appropriate tasks. Documents are generated more efficiently and in many cases, more accurately.

Many firms use Outlook or GroupWise as a calendar, though usually as a personal calendar. Some firms have implemented a firm calendar but this can get quite confusing. All the good practice management software will allow a calendar to be viewed as a firm calendar, a personal calendar, a case calendar or even an event calendar (i.e. the firm's trial calendar).

One thing often over looked is case analysis. If a practice management package is used properly to collect and organize information, then why not analyze the data through the reporting tools? How can this be useful?

One firm might look at previous cases to find a trend that, under particular circumstances, the odds winning the case are high. This could be as simple as taking into consideration the presiding judge and opposing counsel. This information can usually be found within the database of the practice management software.

Another firm might do a case analysis for marketing reasons. One firm took their information, broke it down by area of practice and determined the average time the case took, the cost to the client and the verdicts. They used this information to market the areas of practices which were most profitable.

One size does not fit all

To maximize their customer market, software companies generally design the software to be appealing to as wide a group of potential customers as possible. But as we have already determined, no two firms are alike. This presents a problem.

No single off-the-shelf package will do everything exactly the way you want. Therefore, it becomes necessary to identify which features are critical to your firm, and which are secondary to the firm. Once the needs of the firm have been determined, it is useful to rank them in order of importance. This way, the firm can "shop around" and determine which software packages are strong in their firm's critical features, and eliminate from consideration the ones that are weak in those areas.

Unfortunately, the task of identifying which software packages on the market are weak or strong in certain features is not always easy. Slick marketing and smart salespeople can use all the right buzz words to make a package seem attractive. It is up to the consumer to dig beneath the surface to see if it meets your needs. This can be a very time consuming and frustrating task for the busy office manager or attorney. It may be worth paying a consultant already familiar with the different products on the market to review your needs and narrow down the selection for the firm. While it may seem to be an unnecessary expense, the saving in time, frustration, and possibly avoiding a mistake makes up for the cost.

As you look at the software understand certain procedures in the firm might have to be adjusted. The idea of practice management software is to help streamline the way your firm operates and make it more profitable.

Budget time and money

The cost of the software itself is typically a small part of the total cost of the project, but it is the one that is the most easily identifiable. The software will usually be priced on a per user basis. The other primary costs are implementation and training. Even if you do not plan to hire a consultant/trainer to assist in the implementation, then someone in the office must be assigned to do this work. The time involved in installing and customizing the package will be a significant part of cost.

One common mistake is not factoring in the "hidden" cost of doing it yourself. "In-House" staff often has a much higher billing rate than that of a consultant. Additionally, the implementation will usually take longer causing greater disruption to the firm's operations.

Another "hidden" cost is the learning curve. During the implementation of a new product, users must take the time to learn the software. This down time cuts into the firm's ability to generate billable time. Professional trainers can significantly ease the transition to a new system and in most cases is a wise investment.

Everyone works together

Users who are resistant to change may find it more difficult to understand the purpose of the new software, and therefore be less likely to adopt the new system. For the practice management software package to be effective, it must be used by all members of the firm consistently. Anything less than 100% cooperation by the entire firm will undermine the effectiveness and value of the software. Before new software is introduced into a law firm, it should be made clear to all users what is required of them to learn and use the new system, and explain the benefits that will come with the change. The firm who approaches the practice management system with enthusiasm is far more likely to experience the benefits of the software than the firm who fights it from the beginning.

Will Practice Management Software Work for You?

Success depends on many factors - all important in their own right. Overlooking or minimizing the importance of any of the factors can be very costly and possible doom the software to failure. Trying to decide which software is the best fit for your firm can be very complex and overwhelming decision. Identify the needs of your firm and then pick the software best suited for your firm.

Remember:

1. Identify your firm's needs
2. Pick the software best suited for your firm
3. Plan your implementation
4. Train everyone is use of the management system
5. Reap the benefits of increases productivity and profitability