Second Opinions

Billing Software Issues for the Mid-Sized Firm

By Dena Rafte

LET'S START with a few basic premises:

1 Consider only systems that can perform all of the standard accounting functions your firm requires.

2 Do not underestimate the importance of this decision. Accounting software tends to have a much longer life span than other software.

3 Look beyond the specific requirements of the accounting department when selecting a system. A global understanding of all the operational processes in your firm is critical in evaluating the long-term suitability of an application.

Indeed, some of your current work processes may need to be modified to increase efficiencies throughout the firm. Treat the accounting system as the "hub" of your firm's business intelligence rather than a necessary evil.

The Needs Analysis:

Examine the output from your current system. Consider your clients' billing requirements, your internal and external reporting methodologies, and most importantly ­ information that is being generated outside your current system to meet specific reporting needs. This will provide the base-line standard for minimum requirements.

Avoid the instinct to focus only on those issues that directly impact the accounting department. (i.e, Does the software produce the bills we want? Can we split, allocate, and electronically bill? Can we attach a scan of a vendor invoice to a check or purchase order?)

While the answers to these questions are very important, they only provide a piece of the equation. The other, and arguably more important piece is how can this new system work in conjunction with other firm applications to better leverage information. How will it make the firm more efficient and profitable?

The accounting function is "coming out of the closet" and is dead center in terms of the firm's critical data store. Your system should allow you to get information in and out easily, whether through electronic transfer, use of a report writer, etc.

Look for key operational applications and the accounting software. The larger a firm is, the more critical the integration becomes.

For example, let's focus on a specific application common to many firms ­ the conflict of interest system. In most cases it is directly tied to the accounting system, and is generally one of the modules that can be purchased with the system.

Have you ever considered that there is relevant information in the firm that has never been entered into your conflict system? Depending on the firm, this information is stored in a variety of places. For our purposes, let's assume that it is in a case management program.

Ideally, there would be a three-way interface between accounting, conflicts and case management. The conflict search, if desired, would examine all of these applications. This helps leverage relevant business information electronically, without having to distinguish between separate data stores.

With competition becoming increasingly intense, it is important to maximize the use of captured data. Firms that previously would have never considered any type of formal business development campaign are implementing systems for cross-selling, marketing and customer service. Firms are beginning to ask, "What have I done for my clients that I can do for others? Which clients are generating the most revenue for my firm? Which practice areas are most profitable?"

The trend in legal technology is to make your accounting system the hub of all client information. Accordingly, the goal would be to go to one place, and depending on the user's rights, be able to see billing, productivity, and even emerging trends in your practice -- all without entering data into multiple systems manually. Many vendors are already responding to these demands by creating their own add-on modules for docketing, case management, and marketing. Others are attempting to create "best of breed" options via strategic alliances with complementary products.

Clearly, the industry is aware of the importance of Web accessibility along with an interface to personal e-mail and calendaring systems.

Ultimately, you need to ask whether your firm needs traditional time-and-billing, or graduate to business intelligence software!

Dena Rafte is president of Houston's Rafte & Company, which offers consulting to the legal market.