The ABCs of LPMS

Law practice management software/applications (LPMS) have been on the market for nearly 30 years and can help law firms monitor trust balances, track time accurately, reduce error from re-keying, check for conflicts, help manage tasks and deadlines, calculate court deadlines, provide secure communication options, and so much more. But the products and offerings are in a constant state of flux, making it hard to know what to buy or what to move to when the time comes.

In the last few years, a flood of private equity dollars, vendor consolidation, and a complex slate of overlapping products have made choosing a practice management application more daunting. It is difficult for lawyers to get the straight dope on what the products can do, assess what the firm needs, and how be an informed shopper.

For firms looking to migrate to a new platform or are first-time purchasers of a law practice management application, deciding which product to select can be daunting.

Preparing to Compare

In the article “A Quantitative Approach to Selecting Legal Tech,” author Chase D’Agostino suggests a way to approach shopping for an LPMS (or any technology) that helps you compare platforms. While many products seem identical, there are differentiations that will make or break what succeeds for your firm.

First, identify the problem(s) you are trying to solve. Missing files? Missed deadlines? Spending too much time retyping information? Missing out on lucrative clients because of a lag in follow up? Bottlenecked time entry with multiple reviews that cause the firm to stop working to get the bills out? If you aren’t sure what your problems are, start a list and get feedback from everyone on the team.

Second, look at the systems you are using and create a tech stack list. Include every single piece of technology used by each person in the firm. You may find individuals are using tools that create silos and information deserts that aren’t shared firmwide. Or someone may use a tool that is great and could be deployed across the firm. By creating this list, you can identify overall spend, potential licensing issues, rogue software or services that aren’t protected or backed up appropriately, and what is useful and should be integrated into any new product you buy if the functionality is unique. Often, you may find that the firm has documents stored in Dropbox, SharePoint, OneDrive, Worldox, and on a server. This is too many redundant repositories and can create issues with file versions, retention, cost, and knowledge management.

Next, prepare a feature list that includes what you have and what you want. Then start reviewing products. While the author suggests sending the list to vendors to have them check off the boxes for features their products incorporate, this may be better suited to an independent review and reality check by someone in the firm.

Once you have identified the features that you want you can score and rank the products. D’Agostino suggests ranking importance of features, with the example of “required” = 4, “critical” = 3, and so forth. Then, how well does the product deliver on the feature? Examples include “available out of the box with no customization” = 4, “available through third-party integration at no additional cost” = 3, etc. Then add the scores, and you will have narrowed your list of products and can begin a deeper dive and discussion into a few contenders.

What Does an LPMS Do?

There are dozens of LPMS products on the market. Some are cloud-based, running in a browser. Some are hosted on a vendor’s servers, a “private” cloud approach. Some are installed on a firm’s servers. These are important distinctions for price, access, ownership, and upgrading. However, to get started with a comparison, you can first focus on what the product does. LPMS products may include features that help with marketing, client interaction, “front office” functionality, and “back office” functionality. Not every LPMS will have every feature, and some will have features not listed here.

Marketing Features

  • Websites
  • Sales leads and contacts
  • Email drip campaigns
  • Profitability reports
  • Intake workflows

Client Interaction Features

  • Client portals (communications, calendar, secured document sharing, secure document upload, task lists, invoices, payments)
  • Esignature tools
  • Automated client interviews
  • Client apps
  • Client texting
  • Credit card processing
  • Electronic payments
  • ACH payments

Front Office Management Features

  • Shared calendars
  • Deadline calculations from court rules
  • Contacts
  • Conflicts checking
  • Email and text storage/association by client/matter
  • Document storage/association by client/matter
  • Internal messages
  • Workflows
  • Task management
  • Notes
  • Document assembly
  • Time/activity entry
  • Dashboards (personal, firm, matter)

Back Office Management Features

  • Invoicing
  • Payment processing
  • Trust account balance
  • Trust account reconciliation
  • Outstanding balance
  • Bank accounts
  • Expenses
  • Accounts receivable
  • Accounts payable
  • Check writing
  • General ledger (cash and/or accrual)
  • Chart of accounts
  • Revenue distribution
  • Electronic bank statements
  • Bank statement integration
  • Bank reconciliation
  • Financial reporting

Once you have identified which features a product has you can start to narrow down quickly. You may handle your accounting with QuickBooks. Do you want your new LPMS to replace QuickBooks or integrate with it? What types of reports and dashboards are important to your firm? When you start digging into certain features, discover if they work the way you work. For example, if your firm wants a historical record of pre-bills reflecting write downs, make sure the product can do that (or decide that is no longer a necessity). Does the product you are considering have integrations and add-ons to expand feature sets, rely on you to get the functionality from a different product, or is it built into the product?

Shopping and Review Websites

You may speak with firms like yours to see what products they use and like. However, remember that all firms are different below the surface. There are some online software and service databases that list LPMS products, with reviews. Like many public product lists or databases, vendors may pay for placement, ratings, and other differentiations from their competitors. Do your due diligence to determine the criteria for inclusion. Once you begin working with a company to investigate a product ask for references – and check them!

Conclusion

Once you have narrowed the list of products, you will need to consider pricing, migration, integration, customization, and training to make sure that you understand the total cost of ownership. Adopting an LPMS into your firm is not a magic bullet, but a savvy shopper who understands the goals and outcomes will find that the time invested in the selection process will reap benefits.

Catherine Sanders Reach serves as director of the NCBA Center for Practice Management.