How to Manage a Small Law Firm

Though all law firms share some similar concerns, solo or small firms present unique challenges and benefits due to smaller headcounts and fewer resources. To be profitable, smaller law management requires a strategic structure to oversee staff delegation, client relationships, office management, and cases.

In this article, we’ll cover:

• The differences between small law firm management and large law firm management 
• How to manage a small law firm
• How to run a small law firm with the right tech 

How is Managing a Small Law Firm Different From a Large Law Firm?

When picturing a successful lawyer, you might imagine a Big Law attorney—pricey suits, expensive cars, leather suitcase in hand, taking the most high-profile cases with a big team. Harvey Specter, anyone? And though that may be one way to practice law, there are pros and cons when working for a large firm versus a solo or small firm. 

A Big Law firm, for example, will likely have administrative staff to perform many of the daily functions that keep an office running smoothly. Small law firms don’t share that luxury. Additionally, in Big Law, lawyers may have deeper pockets financially and access to a larger network of clients and legal professionals. 

Solo firms or firms that only employ a handful of legal professionals may need to be more adaptable and nimble at times, but there are also several benefits. For example, lawyers can dive deep into a certain practice area, whereas Big Law lawyers can fall prey to being a jack of all trades but master of none. 

Additionally, it’s simpler for a small firm to create and manage a close-knit legal team and develop strong, personable relationships with clients. When small law firm management is done well, it can provide the opportunity for a thriving legal career. 

What Are the Main Components of Managing a Small Law Firm?

For your small law firm to be profitable, you’ll need reliable processes to manage finances, cases, and staff. 

Financial Management

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.  
• How will you manage time tracking and invoicing? Determine a dependable way to keep track of your 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 in any law firm. 

• 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 2021 Industry Report, 61% of 2,000 survey legal professionals claimed that their firms collected more money because of online payment processing software.

Bonus: This article breaks down different payment methods including their benefits and downsides.

Case Management

When running a law office, you also need to keep on top of your caseload. This includes document and contract management, client communications, court deadlines, and more. 

• 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 personal information. 

• Paperwork: Casework means dealing with contracts, documents, court orders, and loads 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.  
• 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. 

Staff Management

A small firm means a small headcount. A single team member can have a massive impact on the productivity and output of your firm. When hiring you may want to look for someone who can cover multiple positions at one time including work that is typically handled 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. 

How to Manage a Small Law Firm Better

The process of how to run a small law firm 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 quality 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 decisions that lead to growth and maximize profitability. 

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. 

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

3. Get the Right Tech

Utilizing the right technology to automate time-consuming, routine administrative work can save your small team hours of billable time each day. 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.

Run Your Small Firm With Cloud-Based Practice Management Software

Now that you know how to run a small law firm, you’ll need the right tools 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

Get your free 10-day trial today—there’s no credit card or commitments needed. 

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