3 weeks ago
With changing client needs, global competitors entering the UK market, and emerging technologies, it’s clear that the legal sector landscape remains challenging. Last year, PWC reported that almost half of all UK firms experienced a fall in profit during 2017, putting even more pressure on firms to maximise profitability, integrate new technology, and improve staff performance. To overcome these challenges, firms need to become more efficient, using technology to standardise, centralise and modernise processes, trimming the excess wherever possible.
Digitalising your firm’s electronic resources and physical assets is the first step towards innovating your workplace efficiency. Despite fairly recent improvements, many traditional firms still heavily rely on paper documents and physical storage systems to manage information, which is a high-security risk. The most obvious example of this is the use of paper invoices. By digitalising your invoices, you can better track outstanding payments and quickly archive those that have been paid. Whilst many firms practise this, only 2% of firms have established smart contract technology into their workplace, demonstrating that not everyone is maximising the potential for digitalisation.
Digitalising paperwork can save employees on average 5 hours a week, time that could be spent on improving operational efficiencies, such as creating audit trails, improving data capture, streamlining security and governance protocols.
With the new GDPR regulations coming into effect in May, the ability to access centralised data within secure parameters is even more critical.
Legal finance teams manage vast amounts of data from various sources and suppliers. For example, the controller needs to ensure accurate and consistent management of data, as well as overseeing the activity of each fee earner, the variety of discounts offered to clients, and how many instructions are coming from each client. Whilst stakeholders often have multiple software solutions in place to manage these data streams, they are very rarely fully integrated with one another.
To streamline efficiency, controllers need to ensure that platforms are integrated to prevent oversight, information gaps and data discrepancies being transferred across departments. This in turn, creates a more reliable cash flow management process, prevents department silos and allows you to forecast more accurately.
However, these systems need to be frequently reviewed and refined to suit your firm’s needs. This is integral to future-proofing your business by ensuring that your development is matched by your software’s functionality.
One of the easiest and perhaps overlooked ways to increase efficiency within your workforce is by providing timely and effective training to departments using software platforms and integrated systems. Understanding the system’s processes, resources and functionalities means that employees can utilise the platform’s full capabilities and manage cash flow vision with certainty.
But training is about more than efficiency. As staff costs in law firms continue to increase by a yearly average of 2%, it’s important to ensure that you invest in your team to ensure that they can thrive in changing markets and feel a part of your company’s journey. This is key to effective staff retention - a problem that many firms face in their finance departments, especially as 2017 saw a dip in trainee retention which is now at 79.1%.
Automating traditional finance tasks, such as invoicing, closing monthly books, and analysis, gives controllers and stakeholders more time to analyse cross-functional insights and implement critical/strategic planning. Freeing up time that was once dedicated to automated processes creates more opportunity for CFOs to focus on risk assessment, forecasting and company development, negotiating better discounts, and ultimately encourages teams to implement high-level thinking.
The Economist Intelligence Unit revealed that 62% of finance executives plan to launch or oversee an initiative to increase automation in their department in the next two years, showing the growth and the opportunity of an automation strategy.
There are many business benefits to improving your workforce’s efficiency; from standardising and centralising processes, modernising legal practices and freeing up time for stakeholders to prioritise strategic forecasting. Technology doesn’t just play a role in your team’s performance, it’s now a client expectation.
ARCS, the ultimate law firm cash management tool, is designed to help firms achieve market-leading performance and cash forecast transparency to protect the future of the firm. If you’d like to find out more, book a demonstration here.