Maximizing revenue potential in Legal Services

Finance teams in busy law firms should consistently be recognized and considered for their ability to drive growth. In addition to managing (and chasing) invoices, comprehending complex billing structures, and managing clients’ expectations regarding how they would like to pay—and there is a lot of variability—finance teams are also tasked with plugging the holes of revenue leakage. 

How would you rate the information flow/connectedness between your firm's IT systems overall?

Revenue leakage is a literal drain on profitability, and its resolution depends on a connected firm, whether operating in data silos or sharing a single platform. It’s an issue that has undoubtedly improved with the real-time and anyplace promise of cloud technology. However, it remains the bane of many law firm CFOs.

Therefore, it is perhaps not surprising that the revenue leak problem is prevalent in a world where Briefing Frontier’s Annual Report scathingly points out that, indeed, a grand total of 0% of law firm partners and leaders would describe the ‘flow and connectedness’ of their IT infrastructure as ‘Very Effective,’ with only a measly 16% trailing behind in the ‘Effective’ camp.

So, what can CFOs do to plug the leaks? Is disparate data the true culprit, or does the problem go deeper?

The cause and effect in keeping time

The one saving grace in the legal industry is that lawyers have a good track record for logging their billable time. Their livelihoods and achievements depend on it. However, this doesn’t mean mistakes don’t happen, and there isn’t a revenue leak in this process alone. Keeping time can be incredibly time-consuming, especially when the billing is by the minute and the meetings are en masse. For this, AI has a brilliant use case, where, increasingly, software can automate time entry based on calendars and phone calls and even proactively forecast billed time. The outcome? The lawyers spend much less time doing a task they loathe by relying on and can repurpose the time towards… you guessed it, billable time.

Expenses for expenses' sake

Expenses are a hotly contested subject in any professional services industry, and in legal, the subject can make a CFO particularly hot under the collar. An excellent system for categorizing and flagging the more questionable receipts is vital for managing and minimizing the bottom-line impact of expenses. Having the right tools to mitigate expenses ‘for the sake of expenses’ and setting a standard supported by a cleverly configured and connected solution is an excellent approach to boost profitability and sealing off revenue leaks.

Services on sale

There are many reasons why client services may not materialize into their full billing potential. Competition in the industry, challenger service models and even Chat GPT threaten the pricing and packaging of legal services, particularly in corporate law. At the same time, not meeting a client’s billing or pricing expectations is a recipe for missed opportunity and revenue. As such, you’ll see the theme here: a connection between business development, client teams and finance is critical to ensuring that services are delivered at a price that best meets expectations, market standards, and competitiveness. 

Bottom Line

Identifying the root causes of revenue leakage is paramount to resolving it. This often stems from reliance on manual processes and a lack of connection between systems and functions in the law firm. While the process is critical, wrapping an enabling system around it is also necessary to ensure consistency.

evergreen delivers a solution to law firms that addresses the exact use cases above and more, enabling CFOs and finance departments to realize the untapped potential of a connected firm. Complementary to a broader Microsoft transformation and platform strategy, evergreen delivers a complete or modular user experience in Microsoft Dynamics 365, from bid through to bill. Book a free consultation today to learn more.