Law Firm Profitability Survey - Best Practices and More

Problem: A 250-attorney Australian law firm was struggling with getting information out of its time-and-billing system. It had no integrated reporting strategy – some reports were created in Excel, some in Crystal Report. There was also no single source of truth, and the firm needed an analytics and reporting foundation to support its requirements for financial reporting.  

Solution: The firm implemented the Iridium BI Revenue module. As the firm did not have the budget for a large, upfront licensing fee, it capitalized on Iridium’s subscription-based pricing.  As it turned out, the firm was able to eschew paper reports altogether by deploying on Iridium’s efficient and sophisticated dashboards for all fee earners. It also was able to take advantage of Iridium’s customizable cubes, allowing for ad-hoc information analysis whenever necessary.  

Impact: All firm members now have all key information available easily and in near real-time, with all dashboards loading in less than five seconds. Power users can also do ad-hoc analyses. The result is better insight into the revenue as delivered by each attorney and the ability to make quick decisions to better manage the firm.

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Problem: A Florida-based law firm with more than 500 attorneys was in the process of switching time-and-billing systems, in part to be able to use the replacement PMS vendor’s business intelligence dashboards. As it more fully understood the PMS vendor’s BI offering, the firm realized that the out of the box PMS vendor dashboards would not meet their needs.  They needed a more sophisticated BI foundation, and they needed it quickly.  

Solution: The firm purchased Iridium BI’s Revenue and GL+Expense modules and undertook an urgent implementation. The new time-and-billing system was going live soon, and the team desperately wanted to have a BI solution in place when the new PMS was rolled out. The Iridium team was able to deliver in time; quickly enough, in fact, to identify and help the firm fix some data problems that were part of its time-and-billing implementation.  

Impact: Having Iridium BI’s General Ledger module reduced the data validation process that is part of a time-and-billing implementation from a few weeks to two days, with fewer errors. The firm also was able to take advantage of Iridium’s multi-currency features to see dashboard information in local currency. The firm gets better insight into its finances and operations and has added a number of Iridium products since its original purchase. 

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Problem: A Texas-based law firm with more than 100 attorneys was running one of the time-and-billing companies’ own BI/analytics modules but was not getting the support it needed. The firm also desired faster processing, unique customizations, and a higher quality cube. 

Solution: The firm implemented Iridium BI’s Revenue and Profit modules, taking advantage of Iridium’s world-class support and customizability. Iridium’s tools offer complete flexibility, which allows the firm to fully customize based on their requirements, including custom profitability logic to allocate expenses and profits according to firm policy. 

Impact: In addition to providing a better understanding of revenue, expense, and profit, the sophistication and customization of Iridium’s tools allowed the firm to better understand the profitability of its contingency work. This makes it easier for the firm to price those matters and decide which cases are worthwhile. The firm is also able to gauge its profitability without including its higher risk, but higher reward, continency work. This allowed them to determine how much contingency work they can take on while maintaining an acceptable level of risk. 

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Problem: A Texas-based law firm with almost 300 attorneys was upgrading its time-and-billing system. During implementation, the firm came to realize that the upgraded system’s dashboards were still too primitive to deliver the type and amount of financial analytics that the firm requires.  The firm did not realize the shortcomings of their vendor’s BI solution until they were weeks from go-live, so the timing was extremely urgent.  

Solution: Undertaking a “crisis-level implementation,” Iridium was able to deliver its Revenue module as a phase 1 deliverable within several weeks. The Iridium solution was able to deliver all of the firm’s historical reports and data views, including all prior customizations.  In addition, the firm now had a high-performance cube to support ad-hoc reporting and analysis.  The Profit module implementation was done as a phase 2 deliverable and was fully customized to meet the firm’s highly customized profitability reporting requirements.  

Impact: On the day the firm went live, they had a full set of robust dashboards, including all relevant data, enabling the finance team to be heroes in the eyes of firm management. 

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Problem: A Southeastern-based law firm with nearly 200 attorneys needed to model a reduction in operating costs in response to impacts from the growing COVID-19 pandemic. It needed a tool to quickly model the possible impacts on the firm’s operating results as it moved through the evolving crisis

Solution: The firm had previously implemented Iridium Technology’s Intellistat Budgeting and Forecasting module to automate the annual budgeting process in the firm.  However, the forecast modelling component of the system was necessary to deploy to analyze the impact of cost restructuring in various scenarios. Its flexibility and reconfigurability enabled the firm to model COVID-related account budgeting, including employee travel expenses, and plan for future cost adjustments. 

Impact: Intellistat’s Budgeting and Forecasting module allowed the firm to quickly and efficiently prepare various models within hours—rather than the days or weeks it would have previously taken with Excel spreadsheets. By using these new models to make data-driven decisions, the firm minimized compensation reductions and discovered alternative means to mitigate the pandemic’s impact on firm operations. The ability to create models on the fly made a difficult time easier to manage. 

"The ease of Iridium Technology Intellistat Budgeting and Forecasting product allowed us to quickly and efficiently prepare various models due to the COVID-19 crisis. Without this software, we would have spent hours and days developing.  The ability to create versions on the fly made a difficult time easier to manage."

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Problem: A Carolinas-based law firm with nearly 200 attorneys needed accurate real-time reporting and analysis of employee hours in order to manage collections and cash flow during the evolving COVID-19 crisis. Monthly reports were not frequent enough for collecting delinquent data entries and there was no system to regularly alert practice group leaders to current data.

Solution: The firm implemented Iridium Technology’s Steere AlertManager to drive alerts, distributed via email, based on time entry and delinquent hours. With daily or weekly alerts, practice group leaders could quickly identify where timekeepers were out of compliance and adjust where necessary.

Impact: Practice group leaders now collect more immediate and reliable data to drive informed decisions in managing the firm throughout the COVID-19 pandemic.  This also helped the firm obtain more accurate data to assist in managing its resources. Faster time entry also means better realization and collections. “Time has the most value when you work it.”

"Steere AlertManager has made an immediate impact and is helping to drive decisions on how we manage ourselves during the COVID-19 crisis. The ability to report to Practice Group Leaders where we are on hours daily or weekly, and who is delinquent on time-entry, has helped us get more reliable information to assist us in managing the firm and its resources."

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Problem: An East Coast law firm with almost 300 attorneys was in the process of creating new budgets for a client. The firm needed an effective solution that could give it a head start based on historical matters and time history, even if previous matters did not have the same phases and codes.  

Solution: The firm purchased BudgetManager from Iridium’s Steere product line and used its pricing analytics function. This allowed the firm to analyze historical matters and data-warehoused time history to estimate billing times for various tasks. BudgetManager then organized these entries into the assigned phases and matter codes based on requirements for the current matters being budgeted. It was able to provide estimates for current matters, calculate the accuracy of those estimates, and rank levels of work.

Impact: The firm was able to build budgets more quickly and accurately by basing them on actual experience rather than estimates of future billings. In addition, the business development team can now promote the firm’s ability to quickly create accurate budgets to prospective clients who value good budgeting. 

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Problem: A Pacific Northwest-based law firm with nearly 200 attorneys was upgrading its partner review process and wanted to use performance data, including the profitability of each partner, with their subjective evaluations held in existing performance review software (viDesktop). 

Solution: The firm implemented Iridium Technology’s Partner Performance and Compensation Portal from its Intellistat product line. This allowed the firm to combine key performance metrics and subjective evaluations from its existing platform into a single, streamlined review and compensation process. The fully customizable module allows the firm to quickly and easily compare partners and practices and provides users with an interactive portal to view partner performance data, allocate points, and assign bonuses. 

Impact: The result was a faster and easier partner review process. Instead of multiple, disparate review systems and spreadsheets, the firm is able to utilize a centralized depository storing multiple years of key metrics. It also has the ability to roll compensation numbers forward into the following years for ease of future evaluations. 

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Problem: A large Canadian law firm with more than 350 attorneys needed a flexible system that could generate alerts from its practice management system as well as other platforms and data sources, including Iridium Technology’s business intelligence systems. The firm also wanted a customizable data filtering system that was capable of more than basic demographics. Finally, it wanted the ability to schedule the delivery of alerts without requiring help from the IT department. 

Solution: The firm implemented Iridium Technology’s AlertManager from its Steere product line. This allowed data to be filtered beyond basic demographics and provided the ability to distribute notifications by email from the firm’s existing system. Iridium integrated its Intellistat Task Scheduler with AlertManager to enable a browser-based interface for quickly and easily scheduling the execution of data. The system’s flexibility and ease of use allowed users to regularly automate the delivery of alerts without needing assistance from the IT department. 

Impact: With AlertManager, the firm is able to generate reports based on any client attribute, including performance data based on a client’s industry. Users can easily derive alerts and distribute notifications without outside help, and the improved reporting and financial analysis provides the firm with more timely insights into profitability.   

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