By Dave Cook, Global Director of Resource Management at Legal Futures Associate BigHand
Law firm Legal work allocation and resource management strategies are evolving, with data-driven analytics replacing traditional guesswork and intuition. Changes such as drops in demand for legal services and declining profits drive law firms to rethink how they approach resource management. At the same time, new technologies accelerate the transition to more sophisticated and objective decision-making processes that enhance productivity and profitability.
By using resource management technology, you can maximize the utilization of your lawyers’ talents, optimize resource allocations, and make more informed decisions that lead to higher cost-effectiveness and performance. Here’s a look at how your law firm can move from conjecture to precision in resource management:
Profitability issues spur firms to improve legal resource management.
Recent BigHand survey data paints a worrisome picture, with 75% of law firms experiencing a downturn in demand in business over the past year and several leading firms reporting stalled profits. Drops in demand directly impact how effectively firms utilize lawyers and the amount of revenue they generate. Though confidence in a potential recovery grows, law firm operating costs remain high. With last year’s surge in recruitment and lofty salaries, firms must find ways to afford underutilized lawyers who cannot meet performance targets. The rise of hybrid working arrangements adds another layer of complexity to effective resource management.
Traditional short-term cost-cutting methods are riskier than ever. Legal talent remains in high demand, meaning lawyers won’t hesitate to migrate and take their clients with them. And clients have next-to-no tolerance for higher prices.
All said, law firms stand to benefit most by using their existing talent and resources more wisely. Law firms increasingly appreciate the value of improving resource management processes, according to the latest BigHand research. Almost two-thirds (64%) of surveyed firms now emphasize ensuring lawyers delegate tasks to the appropriate staff at the ideal cost. Also, 62% are committed to enhancing leverage, which involves minimizing instances where senior team members handle lower-value work — a change many clients have long demanded.
Shine a light on your legal talent and resources.
The trick is to find and deploy the right people at the right time in ways that both maximize productivity and minimize costs. For that level of insight, firms must understand how and where their lawyers work and use their time.
Cutting-edge resource technology provides the intelligence needed by law firms to increase efficiency and performance — notably the 44% of surveyed firms that say in the coming months, their priority will be to review work allocation strategies with profitability in mind.
Resource management technology highlights opportunities for the most effective lawyer and staff utilization across practice areas and locations. Intuitive dashboards clarify each team member’s specific skills, qualifications, and experience and reveal their current workload levels.
In shining a light on each individual’s strengths, resource management software allows you to allocate work based on facts such as experience, expertise, and availability rather than geographic constraints or subjective factors such as seniority. Possessing cross-practice knowledge about individual competencies allows you to optimize the value of your legal talent, and especially helpful benefit as demand varyies across practice areas.
More efficient lawyer utilization improves law firm profitability.
The transition to a data-driven approach starts with an initial assessment of your firm’s existing processes to identify where firms can assign tasks and resources for greater efficiency. Technology tools that track case and matter progress and ensure accountability also generate valuable data points regarding workloads and completion times. Resourcing technology captures that data to give you fact-based insights on lawyer performance and their knowledge of specific legal matters.
With information on who knows what and who possesses which skills at your fingertips, you can pinpoint where training and professional development can equip team members to handle new tasks. Helping your legal talent learn how to deliver even higher value to the firm is far more beneficial than adopting the short-term strategy of headcount reduction to protect profits.
When gut instincts and guesswork no longer suffice to manage your law firm’s resources effectively, you need a data-driven resource management strategy tailored to your needs. Contact BigHand today for a free health check on your current resource management strategies and processes, and discover how the right tools can help you enhance work allocation processes and maximize profit margins.
