Grow Your Law Firm by Collecting Your Data
Expand your business the smart way.
Gale Kirsopp of 4700Group understands that if your financial data is properly organized, you’re sitting on information that, if leveraged, could make your law firm more profitable. Profitability leads to growth, improved lifestyle, and stability. It also leads to peace of mind, better sleep, and more time with people you love. Gale works mainly with midsize law firms, helping them improve their workflows with financial management reporting.
There are two main functions that Gale works out for you:
- How to get refined data from your financial software
- How to organize that data to give you insights into the financial health of your law firm
QuickBooks Online Advanced and LeanLaw Pro are two of the tools in Gale’s toolbox. LeanLaw customizes QuickBooks for law firms, meaning that the data collected by QuickBooks can be sorted out in LeanLaw to identify workflow issues and guide law firms into better management of resources. LeanLaw also fills in some data gaps that QuickBooks doesn’t collect. Together, these tools are a powerhouse for mining law firm data.
Lead, not Lag
With a leading indicator, like a Days to Pay report, you’ll see how long it generally takes to collect payment – most likely with real-time data (clients who have yet to pay you). Did you know that for many law firms, it takes 72 days for clients to pay? Gale’s job is to determine what factors contribute to that report. She wants to help show you how you can change those factors so that you are affecting results.
Gale prefers to look at leading indicators, rather than lagging ones. An example of a lagging indicator is a Profit & Loss (P&L) report. It shows what already happened and it’s hard to determine why the data turned out the way it did.
Gale helps you to see what is contributing to the problem in your workflow helps you alter your workflows so that they boost your business rather than drag it down.
In the case of getting your clients to pay you in a timely manner, Gale first looks at all components to determine whether the client is going to pay:
- All communication with clients (e.g., Letter of engagement relative to payment terms)
- Retainers / Flat Fees / Payment Structure
- Credit check on new clients
Gale considers accounts receivable on par with an extension of credit: Whether you’re aware of it or not, you are loaning your clients money. And you are outright giving it to them, if the client ends up not paying at all.
Once you uncover the issue at its source, you have the knowledge to change. When you change your workflows based on data, you are able to improve say, your Days to Pay data. You don’t want to chase your clients for money. When communication is clear up front and retainers, expedited invoicing, and electronic payments are put in place, there is much less of a chase.
Digging for that data to show you where you need to change is at the heart of what Gale does.
Tools to Uncover the Data
This is where QuickBooks Online Advanced and LeanLaw Pro come into Gale’s workflow.
LeanLaw extends the functionality of QuickBooks Online Advanced for midsize law firms through its very tight, 2-way, continuous sync. Other software just pushes summary information. The detail of what LeanLaw can extract from QuickBooks is what Gale can use to generate a variety of reports.
Why QuickBooks Online Advanced?
Platform Functionality
Gale explains that the vast majority of people who use QuickBooks enjoy a fraction of its robust capabilities. They may not have their banks connected – doing that in QuickBooks streamlines many processes and adds to the data collection.
Payroll and Payments through the Intuit Payment Network not only save time, but also gives you more detailed data to use for reporting.
Apps
Gale extols the uniqueness of LeanLaw as giving as much data as possible to those who use QuickBooks. The sync makes it possible for lawyers to stay in the user-friendly interface of LeanLaw while the accounting pros can do their magic in QuickBooks. And everyone is looking at the same data – there is only one set of books with QuickBooks as the source of truth.
Some apps fear that if you give too much information in QuickBooks, users won’t go to the app, but LeanLaw knows that midsize law firms appreciate the user roles created by QuickBooks + LeanLaw – it keeps people where they need to be.
The Beauty of Backup
QuickBooks Online Advanced has continuous automated backup: you can restore from a certain date & time. Very handy, according to Gale, when someone on the inside makes a mistake that needs to be cleaned up.
Backup is also critical for any future audits. The tools allow for narrow extraction of data based on date ranges, thus you can extract a specific period and not deliver any data the party isn’t privy to see.
Gale: “Start at the origin. If it’s not set up right, their reports are not going to reflect accurate information. We work with them so that the final product is what they want and need.”
Data
Having flexibility in data capture specific to your firm’s requirements changes everything. Using Custom Form Fields in QuickBooks, you can tag items and then run specific reports – either in LeanLaw or QuickBooks. You can tag data regarding location, practice area, or a partner. Once you have the data, the reports can be generated and be delivered via email in an entirely automated way.
Gale can set up automated reports that get sent to you weekly, monthly or even daily — all through QuickBooks Online Advanced and LeanLaw. These reports are not just standard reports that she does for all law firms: she investigates your processes so that the formula for your data is unique to your law firm. Sure, many law firms do similar things, but there are always variations that require tweaking of the algorithm.
Integration with Office or GSuite
Gale takes her reports and exports them into a Google Sheet or an Excel spreadsheet. Having the ability to do both from QuickBooks Online Advanced is an added perk – younger firms are using GSuite much more than Office 365.
Solid Foundation
Software alone won’t get you there, but getting set up properly in your financial software so that you can understand indicators that reveal the health of your law firm — that’s the foundation for a successful business. If you’re looking for stability, growth and peace of mind with regard to your law practice, having the proper software to reveal the health of your law firm, along with a trusted advisor like Gale pays dividends.
