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Understand the importance of law firm efficiency

Attorneys at small law firms know there is usually more work than time in most days. That’s just how it is when you are staffed to provide legal services, but not marketing, office administration, accounting or any of the other responsibilities that larger law firms can delegate to dedicated personnel. This is more than just an inconvenient fact of life. It’s a potential fatal flaw, because administrative duties pull attorneys away from profitable work, thus dragging down a firm’s efficiency and putting its overall viability at risk.

“Efficiency” can be defined as the time it takes to complete a given task. In a law firm context, it pertains to the time and effort needed to carry a matter from intake to paid invoice. Obviously, the more efficient this process, the better a firm’s bottom line. And yet, an overwhelming majority of firms have ignored streamlining this area of their operations.

In the 2019 State of US Small Law Firms Report from the Thomson Reuters Legal Executive Institute, 72 percent of the 300 respondents said spending too much time on administrative tasks was at least a “moderate” challenge. That’s up two percent from the previous year. While it’s a small uptick, it shows that firms failed to make headway on this challenge. Not only that, it is becoming more of a problem.

That point is underscored by how small law firms define “success.” 76 percent say it’s based on overall profits. By clogging a lawyer’s day with non-billable work, inefficiency corrodes profits, and dilutes the most important measure of success for many firms.

If any further proof is needed, consider these three areas where a lack of efficiency creates serious structural problems:

Client dissatisfaction: In the era of on-demand entertainment and restaurant-to-door delivery service, is it any wonder clients want results immediately? That may not be possible, of course, but it’s still true that a lawyer who is not able to operate efficiently cannot attend to client matters quickly. The less time a lawyer has to spend on non-client work, the more quickly any given billable task can be handled.

Lower-quality work product: Quality legal work demands focus, and that’s hard to do when you’re dealing with issues other than practicing law. The attorney who focuses primarily on his clients’ matters produces a much higher quality finished product that leads to happier, more loyal customers.

Attorney burnout: Burnout is a tremendous issue for the legal profession. For lawyers at small firms, a major cause is trying to do everything alone. When “everything” includes too much non-billable work, lawyers become exhausted performing tasks that don’t bring in any money. That is inefficiency at its worst.

In the end, no small law firm attorney needs another thing on his or her plate. Efficiency is worthy of special consideration, however. Because, in its absence, the prospect of ultimate failure increases.

Boost your profits through increased efficiency

Further explore the problems inefficiency causes – and identify ways small law firms can address them. Read the in-depth white paper: “Is inefficiency hurting your law firm’s profits?”