Why practice management software is critical to business success

When the COVID-19 pandemic burst into our lives in 2020, many US law firms saw increased demand for their services and a greater need for efficient operations.

Some companies have creatively adapted to the new normal, launching coronavirus task forces and other initiatives to address what Amy Traub, partner at BakerHostetler, called “an immediate need from our customers for support.” ‘information on how to deal with… these very unusual circumstances’. [in real time].”

The impact of COVID-19 was just as inevitable in 2021. For lawyers, this means increased demand for services and an opportunity for significant revenue growth. According to Wells Fargo Private Bank’s Legal Specialty Group, U.S. law firm revenue grew 14% in the first nine months of 2021. Additionally, Citi Hildebrandt saw a similar average increase in revenue (14.7 %) and an increase in demand of 6.6% in 2021.

Along with this recent revenue growth, lawyers are also experiencing an increase in demand for legal services as the United States continues to grapple with litigation related to COVID-19. According to the 2021 State of Small Law Firms in the United States Report, 54% of small law firm executives expect moderate to high demand for services to continue next year; 59% expect this growth to continue over the next three years.

These changes mean that businesses must have effective systems in place to manage their business. While some smaller law firms have been slow to adopt dedicated time tracking tools and billing software, the benefits of proposal management software often outweigh the costs. With such software, companies can automatically capture every minute of work in real time. Legal professionals, whether working in-office or remotely, can stay focused on the real work without worrying about billing later.

As the influx of requests for legal services continues, here are five ways law firm management software can improve operations within your firm, illustrating why you should prioritize this software in 2022:

    1. Improved time tracking and invoicing. According to Smokeball’s research, 30% or more of law firm work is not billed inadvertently or deliberately, with some small law firms deliberately not tracking hours to reduce legal costs for clients in trouble. The best law firm management software offers automatic time tracking tools to help you keep track of your time by capturing how much time you spend working. This software also streamlines the invoicing process and builds customer confidence, with detailed reports on the time you spend on their cases. There is also evidence of the financial benefits of using software for time tracking and invoicing. Law firms using law practice management software are more efficient and often earn between $5,000 and $22,000 extra per year, according to a 2015 study by Blue Hill Research.
    2. Better use of time. Practice management software helps law firms hone their accounting and reporting skills, improving their ability to analyze where they spend time and how productivity affects the bottom line. Law firms should look for software suitable for time tracking, case management and client contact, with strong document creation capability and granular reporting features that help firms determine which cases and which personnel maximize profits.
    3. No more billing bottlenecks. A 2019 study by the Thomson Reuters Legal Executive Institute found that 61% of small law firms said getting paid by clients was a significant challenge. However, the best law firm management software offers clients multiple payment methods to help break down billing hurdles. It allows partners to create reminders that alert customers to pay promptly, ensuring fewer late payments. Keeping up to date with accounts receivable is essential to generating revenue and managing profitability. An ideal law firm management system can also fully integrate with a firm’s existing billing system.
    4. The power of automation. Establishing and maintaining regular billing cycles sets a reliable precedent with customers. The best legal practice management software automates a process that shouldn’t depend on guesswork and hunches, impulse memories, handwritten notes, or manual spreadsheets. Lawyers who use automated software tend to bill more often and more accurately than those who don’t.
    5. Better overall operations. The right software must also recognize that invoicing and time tracking are only part of the story. The key phrase is not “billing management software”. Successfully running a law firm goes beyond simple invoicing. With the right law firm management software, firms can improve functionality and accessibility to information. The software can be operated in hybrid work environments and support remote employees and customers. Additionally, the right software can enable more efficient operations, streamlined workflows, and improved collaboration.

The market is full of law firm management software solutions. Making the right choice is critical to business success. So you need to consider the size of your practice, monthly workload, accounting and reporting needs, and budget. When evaluating software, it is also essential to consider three main points of value – usefulness, profitability and psychological benefits – and to ask these essential questions:

    • Who will use this software and how long will it take them to learn it?
    • How much time and effort can we save by using this software?
    • Does this software handle multiple billing types to meet both your current and potential needs?
    • Will the software help all employees do their jobs more efficiently?
    • Will the software allow employees to report their performance and value to the company?

Participating in free trials, consulting with other legal professionals about their use of the software, and doing extensive research are just a few ways to find law practice management software that best suits your firm’s needs.

Making the right choice for your practice may also depend on how much buy-in you will need from partners and employees. Some systems are more complex than others, making adoption difficult for those reluctant to adopt new technologies. The best legal practice management software offers an intuitive and user-friendly approach, helping to turn skeptics into believers.

Your modern legal practice faces a variety of challenges: data security, compliance requirements, infrastructure, changing technology, changing digital usage, and the impact of remote work related to COVID-19. Your company’s software should not be on this list; it should lighten the load on your business and handle a multitude of tasks simultaneously, allowing your business to work more efficiently than ever.


Ruchie Chadha is president of Smokeball, a company that provides law practice management software for small law firms. In her role, she oversees the product, marketing, sales and customer teams. Prior to joining Smokeball, Chadha was a family law attorney in the Chicago area. She now focuses her career on providing innovative solutions to lawyers, so they can better serve their clients and build healthier businesses.


Mind Your Business is a series of columns written by lawyers, legal professionals and others in the legal industry. The purpose of these columns is to offer practical advice to lawyers on how to manage their practices, to provide information on the latest trends in legal technology and how it can help lawyers work more effectively and strategies to build a successful business.


Interested in contributing a column? Send a request to [email protected]


This column reflects the opinions of the author and not necessarily the views of the ABA Journal or the American Bar Association.

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