Kamron Sanders

Legal data analytics opens a new world of possibilities for law firms to achieve operational efficiency and improve outcomes for clients – all with existing data sources.

It’s likely that you already use legal analytics without realizing it but devising a strategy can help maximize your firm’s success. Here’s everything you need to know about legal data analytics.

What Are Legal Data Analytics?

Legal analytics is the process of including data-driven insights into the decision-making process for law firms, such as legal strategy, resource management, and matter forecasting. This offers a competitive advantage by providing full visibility and transparency into law firm operations.

Types of Legal Data Analytics

There are two types of legal data analytics: business and practice. The former focuses on data that are relevant to all businesses, while the latter is specific to legal practices. Each is broken down into specific topics.

Business Data Analysis

• Financial Analysis: At the end of the day, a law firm is still a business. Financial analysis is important to identify cost-saving opportunities, optimize billing processes, and assess profitability. This includes important financial statements like the income statement, balance sheet, and cash flow statement.
• Client Relationship Management (CRM): CRM improves the client experience by enhancing client interactions, identifying cross-selling opportunities, and improving client retention rates. The CRM holds all your relevant client data, including case history, communication history, and demographics, segments the client base according to industry, revenue, or location, and provides granular details to personalize interactions.
• Marketing and Business Development: Marketing analytics can help you understand your ideal client, where your practice stands compared to competitors, and how your marketing initiatives are performing. You can also learn where your prospective clients are coming from to determine the best marketing channels for your budget.

Practice Data Analytics

• Case Outcome Prediction: Predictive legal analytics provides forecasting for case timelines to the most probable outcome to build a case, devise litigation and negotiation strategies, and evaluate options.
• Legal Research and Document Analysis: Legal research can be a time-consuming process, but it’s key in identifying the important precedents or statutes that provide a competitive edge. Legal research analytics helps you identify the relevant cases in your practice area more efficiently to spend more time developing your case strategy.
• Workflow Optimization: Lawyers often struggle with time management, but you can improve your firm’s workflows by analyzing data on workloads, case duration, and resource allocation. You’ll save time with streamlined processes and enhance your firm’s productivity and ensure that you’re allocating resources and delegating tasks effectively.

Why Should My Law Firm Track Legal Data

Legal data is important for all firms, big and small. Here’s why:

Strategic Decision-Making

With legal data, you can make informed decisions that are backed by evidence and trends instead of assumptions and biases. Whether you’re planning to branch into a new practice area or looking to expand your law firm into new markets or locations, you can rely on data insights for more favorable outcomes.

Client Service Improvement

The client experience is one of the most important aspects of staying competitive in the modern legal market. By tracking legal data, law firms can better understand client needs, preferences, and patterns to improve client satisfaction and loyalty.

Competitive Advantage

With increased competition and savvier clients, law firms often struggle to stay ahead and acquire new clients. Legal data gives you a competitive edge by identifying emerging trends, market opportunities, and potential risks, so you can stand out in a crowded market.

Performance Evaluation

Tracking legal data gives you insights to continuously improve your firm’s performance and identify areas for improvement. Data trends reveal strengths, weaknesses, and blind spots for an objective view of your performance and success.

How to Track Legal Data Analytics

Ready to include legal data analytics in your firm’s processes? Here’s how:

Define Key Metrics

It’s important to have a goal in mind and metrics to define success with legal analytics. Your metrics will vary depending on the type of analytics. For example, client acquisition, the cost to acquire a new client, and the average value of a client or case aid your marketing strategy, while realization rate, utilization rate, and billable hours inform your productivity. Clearly define these metrics to zero in on the relevant data.

Data Collection and Storage

You likely already have data for your firm in the form of financial records, client information, and marketing metrics, but you should have systems in place to collect and store it all. Implement processes to gather and organize it effectively, then store it in a secure and reliable data storage system.

Data Analysis Tools

Data analysis tools are key to successful legal analytics. You can rely on external tools like Excel or Power BI, but a comprehensive law practice management solution with reporting helps you home in on targeted, relevant data for your goals. With Bill4Time, you can get a robust view of your data from time tracking and billable hours to clients and matters. 

Team Collaboration and Training

Legal data analytics is a firmwide initiative that involves lawyers and support staff. All team members should be trained in the importance of legal data analytics and how to use your data analysis tools for insights. 

Cloud-based law practice management software offers a secure, centralized source for all your firm data that staff can access at any time, from anywhere. If you want some users to have limited access, you can customize permissions and track activity for full control and visibility.

Continuous Improvement

Legal analytics is an ongoing process. You should conduct regular sessions with staff and stay updated on the latest trends and developments in legal data analytics to enhance your processes and continue to derive meaningful insights.

Final Thoughts

Legal data analytics changes the way law firms and legal professionals use their time, strategize cases, enhance the client experience, and make informed business decisions. As the legal market becomes more competitive, legal data is the key to attracting clients, staying profitable, and encouraging future growth.

Legal processes can be time-consuming and difficult to manage, especially with conflicting deadlines, missing documents, and ever-evolving data.

Instead of trying to make sense of the chaos, law firms are increasingly relying on legal project management – and legal project management software – to streamline processes and manage them effortlessly.

What Is Legal Project Management?

Legal project management is the process of defining the parameters of a matter, planning its course, managing it, and once complete, evaluating how it was handled from the firm and client perspective.

For many lawyers, legal project management is part of their work, but it’s done only in part without a defined structure. Legal project management is becoming more commonplace in firms looking to take a systematic approach to their matters.

Ultimately, legal project management is driven by the need for communication within the firm and with clients, as well as the rising demand for efficiency from clients. It relies on three core principles:

• Front-end planning is better than damage control
• Keep all crucial stakeholders in the loop all of the time
• If it can’t be measured, it can’t be managed

The five steps of legal project management include:

1. Define Project Objectives and Scope

• Gather information to understand the client’s business, needs, and expectations
• Understand the project phases, deliverables, and outcomes with the client
• Assess scope, time, and cost
• Agree on billing arrangements
• Analyze potential risks that may impact the project

2. Project Planning

• Define project phases, tasks, and standards
• Develop timelines and milestones
• Select the project team
• Budgeting
• Gather appropriate tools and resources
• Plan communications

3. Plan Execution

• Delegate tasks to lawyers and staff
• Give timely, objective, and specific feedback
• Manage team performance, dynamics, and morale
• Ensure collaborative team and client communication

4. Monitor and Measure Progress

• Track progress of phases and tasks
• Avoid scope creep and redundancies
• Ensure budget is aligned
• Make project adjustments when unexpected events occur

5. Post-Project Review

• Evaluate outcomes in terms of agreed project scope
• Identify what worked and what could be improved
• Discuss the experience with clients for feedback
• Identify the lessons learned, resources needed, and surprises to be avoided

Benefits of Legal Project Management

Most lawyers will insist they already have aspects of legal project management in place, but formal legal project management is about systemizing the process. Here are some benefits:

Improved Efficiency and Productivity in Legal Projects

Legal project management improves efficiency and productivity by delegating work appropriately, providing techniques to improve workflow, and creating a streamlined process that moves the project through each phase.

Enhanced Client Satisfaction and Communication

Client expectations are one of the driving forces of legal project management, which include value, efficiency, communication, and predictability. Adopting a legal project management process provides clarity for the resources, time, and costs involved, helping clients prepare.

Effective Budgeting and Cost Control

Because legal project management involves planning and scheduling in advance, it helps manage the uncertainty surrounding scope and budget. This is especially important with alternative fee arrangements.

Risk Mitigation and Quality Assurance

The entire project can be scheduled in advance with defined scope, timeframe, and costs. It becomes more predictable in terms of budget and completion time, even if the unexpected disrupts the flow.

Streamlined Collaboration and Team Coordination

With legal project management, everyone involved in the project is aware of the tasks and timeline to ensure better accountability, collaboration, and coordination.

What Is Legal Project Management Software?

Legal project management software helps you align your day-to-day legal operations and coordinate your team efforts in a transparent process. All projects, tasks, assignees, and documents are held in a centralized location for easy monitoring.

Features of the Best Legal Project Management Software

The features you need for your legal project management software can vary, but there are a few features that are a must:

Task and Milestone Tracking

Collaborative tools help you assign, track, schedule, and prioritize your tasks and responsibilities for streamlined project flow.

Document and File Management

Document and file management are key to every aspect of your project. Your solution should have a document storage system that ensures your team can access the information they need efficiently.

Time and Expense Tracking

Time and expense tracking keeps your costs under control and provides visibility into the project budget. This feature allows you to record time, track internal hours, and stay on top of staff, contractors, and consultants for better precision.

Resource Allocation and Scheduling

The efficiency of your project depends on scheduling the necessary tasks and the resources required to fulfill those tasks. Resource allocation and scheduling features ensure that allow you to plan your project resources and tasks and align them to your project timeframe.  

Reporting and Analytics Capabilities

As mentioned, if it can’t be measured, it can’t be managed. Reporting and analytics are important for gaining insights into your work progress and team performance. Getting detailed insights about your firm’s performance can help influence staff bandwidth, budget, and more.

How to Find the Best Legal Project Management Software for My Firm

There are plenty of options for legal project management software, all with different features and capabilities. Here’s what you should consider:

1. Assess Your Firm’s Specific Needs and Requirements: Just because software has a lot of bells and whistles doesn’t mean that it’s right for your firm. First, you have to determine what your firm needs and what features are most important to you, then you can begin to evaluate your options.
2. Research and Compare Different Software Options: Compile a list of suitable software solutions based on the features and other factors that are important to you. Compare the different options in terms of costs, subscription plans, features, integrations, support, and more, so you can create a short list of your best options.
3. Consider Factors like Cost, Scalability, and User-Friendliness: Maybe your firm is small and you have a limited technology budget, but that’s just right now. If you don’t want to go through this process again in a few years, choose a solution that’s scalable to support your firm’s growth. Many software providers offer tiered subscription plans that unlock features as you upgrade, ensuring that your features and capabilities are aligned with your budget. User-friendliness is a must, no matter how small or large your firm is. You want your staff to be able to perform their tasks with ease and little frustration to increase firm-wide adoption.
4. Read Reviews and Seek Recommendations from Industry Professionals: Reviews from real-world users offer great insight into the possible software solutions for your firms. Pay attention to not only the good reviews but the flaws users mention to anticipate possible challenges and learn how well the provider supports its customers. Other law firms and colleagues can be useful in finding good solutions. Ask colleagues you trust if they use project management software, and if so, which ones they’ve tried. Ask for honest opinions on what they liked and didn’t like, which can inform your decision.
5. Test and Evaluate Software Through Demos or Trial Periods: Once you have a few options narrowed down, sign up for some demos or free trial periods. This will give you an opportunity to test out the software and get first-hand knowledge of its usability and features before committing.

Legal Project Management and Law Practice Management Software

No matter what legal project management solution you choose, it’s important that it integrates with your practice management software. Otherwise, you could get bogged down with transferring information and details from one to the other – leaving opportunities for gaps and errors.

Better yet, you can choose a solution that has project management capabilities built in, like Bill4Time. You’ll find everything you need to manage your firm’s matters within one centralized solution, as well as other valuable features like time tracking and client management. Together, these powerful features help you reach the level of efficiency your firm needs and your clients expect.

In uncertain economic times, all businesses are tasked with doing more with less – including law firms.

Every business has to pay what it owes, and with the added complexity of expenses you pay on your client’s behalf, managing invoices is key to saving money and freeing cash flow.

Developing and refining your accounts payable management strategies is essential for your law firm. Let’s take a look at the basics of accounts payable management, how it works in a law firm, and how you can improve your own processes.

What Are Accounts Payable?

Accounts payable includes everything your law firm owes to creditors, such as bills from vendors that are billed to the end client or internal costs for support services.

Typically, accounts payable refers to short-term debts, which are debts that you plan to pay within a year. Long-term debts, such as mortgages or loans for business assets, are usually written as separate liabilities outside of accounts payable.

Law firm accounts payable tends to be complex with strict regulations. With a fiduciary responsibility to your client, missteps in dealing with accounts payable could have ethical implications and consequences.

The Accounts Payable Management Process

Accounts payable management is the manner in which you handle unpaid debts for third-party vendors in your law firm. This may involve acquiring favorable terms of purchase, seeking trade credit lines, or managing the timing and flow of purchases.

The specific process for accounts payable management can vary between law firms, but it generally includes:

1. Invoice Receipt: Your law firm receipts invoices from vendors for goods or services.
2. Invoice Verification: Your law firm invoices are reviewed internally to ensure they are accurate and in compliance with the agreed-upon terms and rates.
3. Invoice Approval: Once reviewed, invoices must be approved. Depending on the process at your law firm, this could mean partners or managers must go over them.
4. Coding and Recording: After the invoices are approved, they are coded with relevant account codes for tracking expenses and entered into the accounting system.
5. Payment Scheduling: Invoices that are approved and recorded are ready to be entered into the payment schedule, which includes determining the payment terms like due dates.
6. Payment Execution: Payments are made to vendors according to the payment schedule. They may be paid using checks, electronic funds transfer, or online payment platforms.
7. Reconciliation: Reconciliation involves comparing the firm’s records and the vendor statements to ensure payments have been made, the records are accurate, and any discrepancies are noted for financial reporting.
8. Reporting: Tracking and recording accounts payable activities is essential to gain visibility into your law firm’s financial health. This reporting is also necessary for legal and regulatory requirements.
9. Vendor Relationship Management: Throughout the process, your law firm must maintain communication and build a relationship with vendors to handle payment discrepancies and address inquiries.

How Do Law Firms Manage Accounts Payable?

Law firms manage accounts payable with robust systems and processes – as well as technology to assist.

Along with an accounts payable management system to ensure accuracy and timeliness, you must have an approval workflow to verify invoices and authorize payment to vendors. Depending on your internal procedures, you may need to institute multiple levels of approval.

Software like Bill4Time’s law firm invoicing software helps you stay on top of your business’ finances and accounting activity in one centralized dashboard. The billing features in Bill4Time make it easy to track expenses to ensure that you can get reimbursement from clients as needed. Since you can manage all aspects of your billing in Bill4Time, you get a comprehensive view of your firm’s finances. 

Common Challenges with Accounts Payable Management

Accounts payable management is key for your firm’s efficiency and financial health, but it can get complicated to manage. Between the reports and payment allocation tracking — here are some common challenges law firms face: 

Cost Recovery

Law firms often incur costs on behalf of clients, such as expert witness fees and court filing fees. It’s important to recover these costs and allocate them to different matters, which can be time consuming and error prone.

Billing

Similarly, law firms bill clients based on billable hours spent working on legal matters and case-related expenses. You have to track your billable hours and client expenses accurately to ensure you recover the costs you put out.

Complexity

If your law firm is juggling a range of clients and legal matters, it can be difficult to manage all of them simultaneously and track their respective expenses without a software solution to help.

Trust Accounting

If your law firm manages trust accounts for client funds, that comes with strict compliance that you must adhere to. This includes accurate tracking of client expenses, and allocating payment in the proper accounts. 

Invoice Management

Law firms receive invoices from multiple vendors for both law firm and client expenses, including court reporters, expert witnesses, research databases, and legal transcription services. All of those invoices must be processed, verified, and reconciled.

Tips to Better Manage Accounts Payable

Managing accounts payable effectively is crucial for any organization, including law firms. Here are some tips specifically tailored for law firms to better manage their accounts payable:

Establish Clear Procedures

Create well-defined accounts payable procedures specific to your law firm. Document the steps involved in the payment process, including approval levels, invoice handling, and payment methods. Communicate these procedures to all relevant staff members to ensure consistency, transparency, and efficiency.

Implement Electronic Invoice Management

Embrace technology by implementing an electronic invoice management system. This software streamlines the accounts payable process, automating tasks like invoice capture, data entry, and approval workflows. It reduces manual errors, enhances efficiency, and provides better visibility into the payment status.

Maintain Vendor Records

Accurate and up-to-date vendor records will help facilitate smooth communication and payment processing. Ensure that vendor details are correctly recorded, including contact information, payment terms, and any special instructions. Regularly review and update this information to avoid payment delays or miscommunication.

Monitor Payment Terms

Law firms often have specific payment terms agreed upon with their vendors or clients. Monitor these terms closely and adhere to them to maintain good relationships. Missing payment deadlines can strain relationships and may result in penalties or legal consequences. Consider setting up reminders or implementing automated payment plans to stay on top of payment deadlines.

Track Expenses 

Stay vigilant about tracking expenses associated with your law firm. Maintain proper documentation of all invoices, bills, and receipts. Accurate expense tracking allows you to review costs, allocate expenses correctly, and plan your budget effectively.

Review and Reconcile Accounts Regularly

Conduct regular reviews and reconciliations of your accounts payable records. Verify that invoices match purchase orders and are accurately recorded in your accounting system. Address any discrepancies promptly to avoid errors and potential financial issues.

Monitor Cash Flow

Keep a close eye on your law firm’s cash flow to ensure you have enough liquidity to cover your accounts payable obligations. Maintain a cash flow projection and regularly review it to anticipate potential shortfalls or surpluses. This analysis will help you make informed decisions regarding payment timing and prioritize invoices accordingly.

Remember, efficient accounts payable management not only helps maintain good financial health but also fosters strong vendor relationships and supports the overall success of your law firm.

Streamline Your Accounts Payable

Accounts payable for law firms can be challenging, but with a smooth management process in plan and support from law firm billing software, you can streamline accounts payable in your firm and improve your financial position. 

Are there hidden red flags in your firm’s billing practices? Transparency in billing is a key factor in client satisfaction and retention. 

For some clients, the legal billing process can be challenging to navigate making it crucial for firms to have transparent, easy-to-digest terms.

Find out more about red-flag billing practices to avoid and how you can maintain compliance with law firm invoicing software.

What Is Upbilling?

Upbilling is the practice of rounding up billable time. Most lawyers bill in six-minute increments, but with upbilling, lawyers are rounding their billable time up to the next half hour or hour, leading to excess revenue and unjust billing practices for the client.

Another issue related to upbilling, as revealed by the report, is that lawyers were billing for a single six-minute increment of time, despite listing tasks that would typically take a fraction of that time.

What Is the Difference Between Upbilling and Block Billing?

Though equally problematic, upbilling and block billing are different practices. The former involves rounding time increments up for billable hours, while the latter includes a range of tasks in one block of time.

With block billing, lawyers list separate tasks under one time entry for a bill, rather than itemizing their tasks and time increments. 

This doesn’t necessarily mean lawyers are billing for hours they didn’t spend working for the client, but it does make it difficult for clients to determine how that time was spent.

Issues with Block Billing

Clients often complain about block billing because it creates challenges for them in understanding how to budget and may lead to suspicion surrounding your timekeeping practices. 

Common Legal Billing Red Flags to Avoid

Some lawyers struggle with accurate timekeeping and end up underbilling for their time, missing out on valuable revenue for the hours they spend working on a case. Still, clients are quick to suspect that lawyers are “padding the bill,” leading to client disputes.

There are several legal billing red flags that you should avoid to maintain client trust, especially when it comes to the billing process:

• Block billing with large chunks of time and vague tasks
• Repetitive tasks, such as emails or phone calls, that are billed at the same amount, as the time typically varies
• Double charges for work performed by paralegals or other staff members, which is then reviewed by a lawyer
• High minimum billing times, such as half-hour increments for short tasks like client calls
• Repeated entries that have the same amount of time
• Billable hours that don’t align with the client experience, such as a bill for an hour client meeting that only took 15 minutes
• Billing for excessive office overhead

Research is another area where some lawyers may pad a bill. While some cases will involve extensive research on specific legal issues, lawyers should not need to conduct basic research for straightforward cases in their practice areas. That’s what the client is paying for – legal expertise, education, and experience.

Legal time tracking software like Bill4Time helps your firm avoid these pitfalls with accurate, convenient, and compliant timekeeping and billing practices. With custom invoices, you’ll have a detailed list of the tasks performed for a client and spot-on billable time with efficient timekeeping practices.

Adopt Transparent Legal Billing Practices

Whether law firms are deliberately padding bills or extremely inefficient, bills with red flags and errors breed suspicion and doubt in clients.

It’s essential for your law firm to maintain trust and compliance with accurate timekeeping, itemized invoices, and streamlined processes. Law firm billing software is the best way to optimize these processes and ensure that clients are paying fairly for your time spent on their cases.

Once you complete a case, your work isn’t quite over. You still need to get paid for your legal services, though this can be a struggle for many law firms.

Late payments, missed payments, or collections can stall your firm’s cash flow and create a lot of time-consuming administrative work. Much of this work can be avoided by standardizing your billing and invoicing process. Having invoice templates and invoice email templates can save your firm time and get you paid faster, while also building stronger client relationships

What Is the Importance of Legal Invoice Email Templates?

The greatest benefit of an email template is saving time. Instead of typing an email every time you send an invoice, you have most of the information ready to go — all you have to do is include client information.

This is especially useful for law firms since staff will save time by only having to pull the client’s contact information and review it for proper formatting. A template is useful for sending invoices to multiple clients as it ensures that the invoice alerts are consistent.

With a basic template in place, you simply personalize it to the client with their name and other relevant information.

What Should Be in My Legal Invoice Email Templates?

Your email and invoice should include all the information necessary for your client to process the payment.

Your invoice template should include:

• Your business details, such as your name, logo, and contact information
• Invoice number
• Client’s full name and contact details
• Invoice date
• Due date
• Amount due
• Itemized list of services with a breakdown of rates
• Any applicable details like terms and conditions and available payment methods

The invoice email should include:

• Invoice number
• Due date
• Amount due
• Payment instructions that are clear and easy to follow
• Completed work
• A notice if payments are past due and options to resolve overdue balances
• The attached invoice

Your invoice templates should make it clear and easy for the client. Traditional billing practices like paper invoices or paper checks can delay payments and even create obstacles for the client to pay. 

With Bill4Time Payments, your firm can accept online payments and include custom payment links on the invoices automatically. This allows your clients to quickly and conveniently pay their bills using the method they choose on a secure and private portal. 

Clients can pay in just a few clicks whether they use eCheck or a credit card. You can also enable Bill4Time’s user-friendly client portal where clients can view invoices, pay online or review documents. 

Example Legal Invoice Email Templates

If you’re not sure how to write an invoice email, here’s an example template to inspire you:

Subject: Invoice [number] Due on [date]

Dear [client name],

I hope you’re doing well. Please see invoice [number] for [completed work] attached. The balance of [amount due] on this invoice is due by [date]. You can make your payment online via eCheck, credit or debit card. If enabled, we also welcome you to use your client portal to view and pay your invoices and review your payment history. 

If you need to make other payment arrangements, please contact our accounting department at accounting@lawfirm.com 

Please reach out if you have any questions or need clarification regarding your invoice.

Best regards,

[your name and email signature]

This invoice email template is brief and clear, free of unnecessary details or conversation. Usually, this is appropriate for most clients, but use your discretion to determine how much additional information to include.

If you wish to include a personalized greeting, you can put it in the body of the email. This helps to set your firm apart from others and will make your client feel like they have a more engaging experience.

Automating Invoice Templates with Law Firm Invoicing Software

The standard invoicing process can be time-consuming, especially when you consider tracking billable hours, payments received, payments due, and what accounts need to be sent to collections.

Legal billing software like Bill4Time helps you automate the process of creating invoices and emailing them to your clients, giving you benefits like:

Improved Cash Flow

Your collection time will improve when you shift from manual processes to efficient automated invoicing. In Bill4Time, you can set up automated invoices and payment reminders, and accept online payments — all proven tactics that help law firms get paid up to 70% faster.

Better Client Relationships

Automated law firm invoicing also supports the attorney-client relationship. Clients get the benefit of predictable invoicing and self-service payments through a secure portal, while you can be relieved of the stress of chasing down late invoices. You can also generate a thank-you email to improve the relationship and get feedback.

Minimized Human Error

No matter how careful your staff is, mistakes can happen. Legal billing software automates the intricacies of data entry, time tracking, and billing calculations. Bill4Time allows lawyers the ability to set multiple timers so they capture time as they switch between cases. Features like this help to minimize inaccurate invoices, billing disputes, and overpayments. You can track cash flow in real-time to get a clear view of your firm’s financial health.

Create a Custom Template

It only takes a few minutes to create professional branded invoices. In Bill4Time, you can customize your firm’s invoice with all required components, like your rates or fees, and even add your logo.  

Increase Workflow Efficiencies

Create batch invoices, apply payments to current invoices, or create invoice summaries to customize your workflow. Schedule your invoices to send automatically or recurring, so the clients you bill each month get their invoices on the payment schedule outlined in your legal billing policy at intake.

Send Reminders

You can set up invoice reminders to nudge clients with overdue invoices. These can also be templated to make the process quick and simple. Schedule your reminders to go out a week before the invoice is due and once a due date has passed. These simple reminders will keep you and your clients accountable for the payment schedule. 

Build Strong Client Relationships with Legal Invoice Template Emails

A well-written and timely invoice email is a crucial step in establishing a strong relationship with your client and getting your bills paid on time. Custom invoice templates with invoice email templates using legal billing software streamline your law firm’s invoicing process and ensures you don’t have a lot of revenue in limbo.

For many lawyers, making partner at a law firm is the highest tier of the partner hierarchy.

However, accomplishing this goal isn’t always an easy task. Law firms have different partnership structures for managing partners, and different paths to get there.

What Is a Managing Partner at a Law Firm?

A managing partner is a senior attorney on a management team who is often responsible for the day-to-day operations, business plans, policies, and profitability of the firm. Like partners, managing partners have an ownership interest in the firm. 

Responsibilities of a Managing Partner at a Law Firm

A law firm’s managing partner is responsible for managing the operations of the law firm and delegating responsibilities to employees within the firm, including the lawyers and support staff. They’re comparable to the chief executive officer of the firm assisting with developing strategies and goals to support long-term growth for the firm.

Though all managing partners are responsible for both big-picture and day-to-day business affairs for the law firm, the scope and reporting relationships vary based on the size of the firm. 

It’s common for managing partners to be former attorneys, but they may have a non-practicing law degree with sufficient experience in the legal field. 

Law Firm Partner Structure

Partnership structures can take different forms, depending on the firm and its model. Traditional law firm partnership structures often choose partners based on billable hours, years of experience, and tenure. 

Traditional Partnership Structures

In this model, law firms promote based on experience and reward client acquisition and revenue generation, which are considered key factors in long-term growth.

Typically, the partner track follows this structure:

• Law firms promote senior lawyers from within the firm after a number of years of service.
• Law firms compensate equity partners with a profit share and additional responsibilities like decision-making.

This model has flaws, however, such as:

• Time and skill don’t always correspond
• Internal promotions aren’t always the best choice for the firm
• Non-lawyer staff members are excluded from partnership structures and may feel undervalued

Salary and Job Market Overview of Managing Partners

The average salary for a managing partner is $205,242 per year, but it can vary according to experience, location, or size of the law firm. On the low end, a managing partner may earn $109,000 per year, and on the high end, they may earn $395,000 per year.

Along with base salary, managing partners may earn bonuses ranging from $8,000 to $243,000 and profit shares ranging from $1,000 to $491,000. Combined, managing partners may earn up to $705,000 on the higher end of the pay range.

How Do You Become a Managing Partner at a Law Firm?

While making partner can look different at each law firm, there are a few developmental skills lawyers seeking the partner track should encompass. 

Understand the Inner Workings of the Firm 

Managing partners don’t have to be experts in all administrative aspects of the firm, but they should have a high-level understanding of their function. Managing partners are expected to know enough about the different administrative areas to effectively lead those departments and measure their impact on the firm at large. 

Develop Business Acumen

Good lawyers offer legal services but being a managing partner is more involved than practicing law. Managing partners have to bring new opportunities to the firm through new revenue streams or new client relationships, which is where a working knowledge of how to manage a business comes into play.

Build Professional Relationships

Building and maintaining a professional network is important for the success of any attorney, but it’s especially important if you want to make managing partner.  You’ll want to develop your networking skills to build strong professional relationships among your peers, staff, and other stakeholders. 

Practice Managing Change

At its heart, leadership is about managing change. The legal industry – and lawyers – rely heavily on tradition and aren’t often quick to embrace change. 

Managing partners should have the ability to shepherd the firm through change and innovation. This can include rebranding, adding a new practice group, or modernizing the practice. For managing partners today, that could mean understanding the need for legal technology and how it can improve their processes, client satisfaction and contribute to the profitability of the firm. 

Get on the Managing Partner Track

Making partner at a law firm is a lofty goal, but it takes an extra edge for an attorney to get there. Understanding business, administrative areas, networking, and leadership are essential for lawyers to show they have a mind for the business side of a law firm.