How to Manage a Small Law Firm in 2024
By Mary Elizabeth Hammond
Managing a small law firm in 2024 has unique challenges for solo practitioners and small legal teams. Limited resources make the margin for error slim, especially when facing competition from larger firms.
As the legal landscape gets more competitive and clients have more options than ever, it’s critical for your team to prepare for the work ahead.
Join us as we discuss how to manage a small law firm in 2024 for long-term success. This guide will cover:
- Small law firm management vs. large law firm management
- How to manage a small law firm for greater profits and productivity
- How to run a small law firm with the right technology
Small Law Firm Management vs. Large Law Firm Management: What’s the Difference?
Due to lower headcounts and fewer resources, small law firm management requires a strategic structure to oversee staff delegation, client relationships, office management, and cases.
And while it’s easy to picture a successful lawyer as a Big Law attorney, small law firms bring their own advantages to the legal market.
For example, having a small team fosters strong, personable relationships with your clients. Your team’s communication is more seamless than big firms where things can get lost in translation as they move through the pipelines.
Small law firms are also more nimble than their Big Law counterparts. A Big Law firm will likely have the administrative staff to perform many of the daily functions that keep an office running smoothly. Small law firms don’t share that luxury but have the know-how to adapt. Smaller teams can more easily pivot than large teams who are used to operating in a certain way.
Finally, small law firms can dive deep into a specific practice area, creating a demand for their knowledge. Big Law firms, on the other hand, often fall prey to being a jack of all trades but master of none. This differentiation allows small firms to stand out against the competition and boost brand awareness.
Overall, when small law firm management is done well, it can lead to a thriving legal career with a growing client-base.
Running a Small Law Firm: The Core Components
You’ll need reliable processes to manage finances, cases, and staff for your small law firm to be profitable. Let’s look at how these components contribute to streamlined workflows and more revenue for your firm
Effective management means regularly evaluating your firm’s pricing, payment models, and overall finances. To ensure your firm is in good financial health, consider the following:
- What is your competitor’s pricing? Look at the market. What are other firms in your geographic location and practice area charging? Of course, you want to offer competitive and affordable pricing to your clients. That said, reducing pricing and offering discounts is a short-term solution that can devalue your work. Ask—how are you adding value other firms aren’t? For example, a larger firm may be able to offer lower prices but not the personal touch and client experience you can. Communicate your strengths.
- How will you manage time tracking and invoicing? Determine a dependable way to keep track of your small law firm billable hours, manage accounts receivable, send out invoices, and follow up with past-due invoices. (Refer to the tech section below for solutions that can help you automate and manage these processes.)
- How will you manage trust accounts? Review your local state bar rules and regulations regarding trust accounting and ensure you have a reliable way to compliantly track the trust balance of all clients.
Bonus: Refer to this guide for a comprehensive look into handling trust accounting at law firms of any size.
- How will you collect payments? Consider how your firm will receive payments from clients. Options may include credit and debit cards, ACH payments, PayPal, and payment plans. Providing multiple payment methods—particularly online payment options—makes it easier for clients to pay you.
According to the MyCase 2022 Industry Report, 61% of 2,000 survey legal professionals claimed that their firms collected more money because of online payment processing software.
Bonus: This legal billing article breaks down different payment methods including their benefits and downsides.
When you run a small law firm, it’s crucial to stay on top of your caseload. A smaller team means limited bandwidth, and it can be a slippery slope if you start to get behind.
Small law firm case management includes monitoring documents and contracts, client communications, court deadlines, and more.
- Paperwork: Casework means dealing with contracts, documents, court orders, and plenty of paperwork. Determine how you will track, manage, and store all documents—while ensuring the security of sensitive client information. Consider investing in cloud-based storage where you can securely store and track all legal documentation.
- Client communications: Clients should be regularly updated on case progress. For example, the rules of professional conduct for the Missouri Bar and Judiciary rule 1.4 states the necessity of lawyers to provide “reasonable” and timely client communication.
To avoid unmet expectations, let clients know upfront how often they can expect to hear from you and how to contact you if needed. Additionally, consider investing in software that allows you to quickly update clients. For example, with MyCase, you can text clients without giving out your legal team’s personal information.
- Calendaring: Make sure your team is current on all case events and deadlines. Legal calendaring software can be a big help. This feature enables automatic and pre-scheduled reminders, notifications, and updates via text message.
At boutique law firms, a single team member can have a massive impact on the productivity and output of your firm. That’s why it’s critical to invest in the select few you decide to bring on board.
When hiring you may want to look for someone who can wear many hats. This includes a multi-faceted individual who can take on work typically performed by a receptionist, paralegal, office manager, billing coordinator, etc.
Once you’ve hired the best staff out there, consider how you want to invest in training. As Sir Richard Branson, founder of Virgin, advises, “Train people well enough so they can leave, treat them well enough so they don’t want to.”
Team training not only ensures that your processes and workflows go according to plan, but it also shows employees that you want to invest in them. Plus, proper training can help your team avoid costly mistakes and potential malpractice.
Finally, once you’ve established your team, it’s time to keep operations and communications running smoothly. This guide on legal team management can help you nurture a successful team that serves its clients to the best of its ability.
How to Manage a Small Law Firm for More Profit & Productivity
The process of small law firm management involves keeping track of several moving parts without the assets, team size, and deep pockets of a Big Law firm.
Below are three tips that can help you successfully manage a profitable and productive small law firm.
1. Make Data-Driven Decisions
Issuing business decisions without data on your firm’s inner workings is like taking a stab in the dark. On the other hand, law practice management software with data analysis capabilities enables you to make informed decisions that lead to growth.
For example, legal analytics software provides a comprehensive overview of the history, progress, and status of every case and task. With MyCase, you can access a dashboard that shows a snapshot of the next event or task, and the latest status update on all cases. You can also filter by stage, practice area, or lead attorney. In addition, you can run customizable case reports to quickly view and sort the data you need.
All these tools support your team in making the right moves for running your business.
2. Delegate and Create Processes
Creating structure through delegation and procedures maximizes workflows and keeps your team compliant with bar regulations. With a lack of structure, you risk unhappy clients, billable time going untracked, profit loss, and malpractice.
Often, when an attorney opens their own firm, they are surprised with (and possibly overwhelmed by) the tasks needed to keep a law firm afloat. From licensing and bar compliance requirements to communicating with clients and filing court documents—it can be a lot.
Clear processes ensure that tasks are properly organized and finished in a timely manner. When setting these procedures, consider:
- Creating a document that clearly outlines how workflows should go, including who owns each process and touch point
- Training current and new employees on processes regularly
- Using legal practice management software to automate processes wherever possible
Having these processes in place can help your team avoid lawyer burnout—a very real threat to your lawyers’ well-being and your firm’s productivity.
3. Get the Right Technology
Utilizing the right technology can save your legal team hours of billable time each day. These tools automate time-consuming, routine administrative work that chips away at what your firm does best—practicing law.
Below are features to look for in legal practice management software that will help you maximize productivity and profitability:
- Client intake and communications: Elevate your onboarding experience and eliminate the manual work that comes with new client leads and onboarding. Legal client intake software, such as MyCase, allows you to create a custom intake form for your site and receive notifications whenever a new form is submitted. Additionally, you can easily keep on top of client communications with the MyCase Client Portal.
- Virtual receptionist: Never miss a call and avoid constant interruptions that reduce productivity. All calls can be tracked and accessible in one centralized location.
- Accounting: Keep your firm finances on track and eliminate redundant data entry across multiple systems. MyCase Accounting enables you to track all of your client’s trust transactions and reconciliation in a single, secure location.
- Billing and invoicing: With MyCase billing, you can automate invoice creations and reminders, set up time tracking timers to ensure no billable time is lost, and accept online payments.
- eSignatures: Gathering signatures virtually can save you billable time—no need to meet up with clients in person or send documents by mail to collect wet signatures.
- Document storage and management: Organization is key in any successful law firm—especially a small law firm that has fewer resources. MyCase legal document management software enables you to keep everything in one place with unlimited data storage. Additionally, you can create templates that automatically populate documents with case information.
Manage Your Small Law Firm With the Help of MyCase
Now that you know how to run a small law firm, you’ll need the right legal software to get started.
MyCase serves over 15,000 law firms, many of which are small or solo practices. These firms see an average gain of three additional billable hours a day using MyCase time-saving features, including:
- Case management
- Billing and payments
- Time tracking
- Automated invoicing
- Calendar management
- And more
With MyCase, we can help your team juggle the many demands of running a small law firm. We’ll give you the tools to streamline your workload, stay on top of every case, and access critical information from anywhere, with our cloud-based data storage.
Get your free 10-day MyCase trial today. There’s no commitment or credit card required, and you can cancel at any time.