Is technology leaving you behind?
The world is changing whether we like it or not. Like anything in life, we have two choices – we can either evolve with it, or stay as we are and risk being left behind.
As business owners, we should not ignore change, but a cautious approach minimising exposure to business risk is advisable. So how can we evaluate new ideas and ensure they will result in increased returns?
One of the key components to maintaining and improving profit margins is investment in technology. But before you rush out and spend a king’s ransom on the latest piece of technology which claims to be the answer to your prayers, take a step back and consider what you are trying to achieve. Here is some practical guidance for firms of all sizes to help you through the decision making process
The forces driving your future profit margins:
1. Recruiting the right people at the right levels
2. Increasing salary costs to maintain and attract talented individuals 3. Pressure to offer agile working
4. Limited office space, restricting growth
5. Fee pressure from clients and/or competition
6. Succession planning
These longstanding challenges to growth are familiar to us all. However, if we are open to change, technological advances can offer alternative solutions to these problems and change the way we work. More opportunities become available to us, generating larger profits for the firm.
A PRACTICAL GUIDE TO EMBRACING TECHNOLOGY APPLICATIONS
STEP 1 – IDENTIFYING WHAT TO CHANGE AND HOW
Do you know your current cost of production? Are you using timesheets to record all work performed? Even fixed fee work requires measurement. Timesheets are not just a method for invoicing clients. They are a management tool to help the firm fully understand how they deliver a service to a client. It is essential to have a timesheet policy in place which enables fee earners to record all of their time even when the value of the fee is exceeded.
Without a clear understanding of the costs incurred in delivering client services, your decision making will be impaired and measuring your return on investment will be impossible.
STEP 2 – IDENTIFY WHAT YOU ACTUALLY DELIVER
Once your data is extracted from your timesheets, you can analyse how the time is spent between following a predetermined process or truly adding value. It is the value added work that you want to preserve and ideally grow in terms of quantity and impact for the client, which is a whole topic by itself.
The key is to identify the processes. There will be elements that can be done more cost effectively with no impact on service levels, either by using more junior staff, or by using technology. Many firms already save time using template letters, but is it possible to take this further by adopting artificial intelligence?
What impact would technology have in your law firm – improved efficiency, fewer lawyers, or less reliance on support staff, perhaps?
The aim is to reduce the cost of production without compromising on service, allowing you to do more in less time.