Second Opinions

Billing Software Issues for the Mid-Sized Firm

By Thomas Baldwin

MID-SIZED FIRMS (approximately 50 attorneys and about 100 total users), face difficult decisions when confronting I.T. projects. None are more important than the selection of a time and billing system. Unlike other technology decisions, which are usually phased out in three years, most accounting systems are expected to last much longer. Consequently, the margin for error for selecting a system is almost non-existent.

Smaller firms and larger firms generally have a niche of products that cater to their individual needs. However, a mid-sized firm can get lulled into a variety of directions. It is unlikely that you'll see a five-attorney firm using the same package as a 500-lawyer shop, but it's not uncommon to see a 50-attorney firm go in either direction. So how do you know when you are making the right decision? Ego often pushes these firms to try and play with the "big boys and girls," but just because the XY&Z firm down the street has a particular time-and-billing package, it doesn't mean it's necessarily right for your firm.

So here's a plan:

1. Begin planning early

Give yourself at least six to 12 months to get a new system in place. This time frame will vary depending on the system you select, but includes everything from initial product research, to the month you go "live" on the new system. Get in their "queue" as soon as possible.

2. Form a committee

Make sure that there are multiple people involved in the decision process, don't put all the pressure on one person. Generally, your accounting manager, firm administrator, and a partner should be spearheading the decision with I.T. involved to be sure that the system selected also meets technical requirements of the firm.

Because some mid-sized firms don't have a full-time chief financial officer, but rely on an outside accounting firm for this function, plan on including them as well. While you want involvement from a few different groups, be careful that the committee doesn't get too large, this often bogs down the entire decision making process.

3. Assess needs and start planning

This will take the most time of any phase in your plan and absolutely is vital to the selection of a new system. It will require input from the members of your committee as well as your clients, to be sure all aspects are considered. Once you've developed your needs, finalizing your project plan will be a bit easier.

General considerations

Your billing system is an extension of your ability to service client needs, so flexibility, and promptness is critical.

Those of you looking to purchase a system now, probably avoided a forced upgrade during the Y2K frenzy and may be on an antiquated DOS or Unix package (or you made a hasty decision to get your system Y2K compliant and are now looking to correct the situation).

Systems that integrate time entry, billing and accounting are no longer the exception, but the rule. So, look beyond this. Most now offer an entire suite of law office automation tools that integrate many functions that are either disjointed, or not automated at all.

When purchasing a new system, this is the ideal time to change the way your firm operates. Many mid-sized firms have either grown to this size or, scaled down from a larger organization. In these instances, legacy billing practices and reports often don't meet the needs of the firm. Adopt new practices, reporting and policies that best utilize your system, don't always try to make the system adapt to your way of doing things.

I.T. Considerations

* The system must be highly stable and not require heavy maintenance. Support must be superb. While this may seem obvious, mid-sized firms are generally understaffed in I.T. If you use the ratios that Hildbrandt International suggests, you should have one I.T. person for every 20 to 30 users. In many mid-sized firms, that means at least three full-time staff, which is somewhat rare. Given this, your billing system can't require constant support.

* Your infrastructure must be up to the task of handling this new beast. Server room facilities, cabling, network backbone, etc., all must be taken into account.

* Many accounting systems have complicated report writing, which can require in-house programming expertise.

* Mid-sized firms should look at systems that run SQL.

* Dedicate an internal project manager to oversee the conversion. Usually, these projects follow the 75/25 rule, 75 percent of your time will be spent in the planning phase and 25 percent will be spent implementing.

* Thorough training is essential. This is probably one of the most common reasons that a new system fails in a law firm.

Checking references

This is probably the most critical aspect of selecting a new system. Ask the vendor for references from firms that:

* Practice the same type of law that your firm practices.

* Are of relative size to your firm.

* Are using the exact same software.

* Have been converted from the same type of billing system.

* Practice in your state.

Finally, visit a firm that has the product installed.

Tom Baldwin is the principal at Cyber-CIO, based in Hermosa Beach, Calif.