Don't Be Penny-wise and Pound Foolish
As practice management advisors we continually advise lawyers, particularly newer lawyers or lawyers starting their own firms for the first time, not to overextend financially. Creating too much of a monthly obligation may lead lawyers to engage in risk-laden behavior such as taking on too many clients or taking clients they know they should avoid. At the same time, spending money to start or build a practice is a practical necessity; spending it wisely is the key.
So what should you be spending money on at the outset? First, some absolute necessities: your bar fees have to be paid. Remember, the fees process is now online and you won’t get a notice by “snail mail.”
What else? In Arizona, lawyers are not required to carry professional liability insurance (aka malpractice insurance). While not required, carrying professional liability insurance is a best practice. There are a number of providers – some of whom may provide a discount because you are a State Bar member – and you should shop around as rates and degrees of coverage may vary dramatically.
But here’s the topic we really need to discuss – practice management software. At the risk of belaboring the obvious, practice management software will help you . . . OK, here’s the obvious . . . manage your practice. The best software will integrate calendaring, document creation and storage, billing, and contact/client management. Many of the newer products offer a client portal for information sharing with your clients, document automation and integration with other software on which you rely. It is important to remember that like malpractice coverage, practice management software comes in a variety of shapes and sizes and at a wide range of prices.
There are, well maybe not hundreds, but certainly dozens of products on the market at present. Many offer common features, but some offer features others do not; some are more user-friendly or have a more user-friendly look and feel; others have more “back office” functions like billing and time-keeping. Before you choose software you will have to make some very basic decisions including whether you want installed desk-top based software or cloud-based software (also known as “software as a service” or SaaS). You will also need to know what is the most important to your practice – do you have a forms-driven practice? Do you need rules-based calendaring included? How many users will you have and how will that increase your cost? What training is included and if you are using another system, will your new provider help you migrate or “on-board” your data? What are the terms of service and are they consistent with the needs of your practice.
Practice 2.0 is here to help you identify and work through your needs. We have posted a chart comparing some of the newer and more popular practice management software here. We’ll be expanding it over time, so check back often. We will also be posting a checklist to help you identify some of the issues that may help you decide. If you need more information, please call us at 602.340.7332 and speak to one of our practice management advisors by phone or at the State Bar offices.