Legal teams are increasingly required to deliver their professional service as a business. Corporate legal departments and law firms are equally expected to contribute more to their clients’ optimization efforts and to offer solutions in strategic initiatives. Irrespective of the size of a legal team, drafting a formal annual budget is a necessity. This article helps in-house counsel and law firm attorneys discover best practices, access free templates and start testing tools to get their legal budget in shape.
Recent surveys and reports show that an increasing number of legal leaders include in their annual budget investments in legal technologies like matter management, document automation and digital contracting solutions. Yet legal technology is not only a cost item on a well-defined budget, but also a tool that enables lawyers to better assess their business and improve value-creation for clients.
For In-House Counsel: Access PDF Guides & Legal Budget Template
Our long-term partner team at Xakia helps corporate legal teams to proactively plan ahead and be far better positioned to thrive even in challenging economic environments. Xakia developed a 10-step process for creating an in-house legal budget and an 8-step guide on a legal department strategy. While every department, organization and accounting system are different, the Xakia platform and their PDF guides enable legal teams to shift away from the “last year plus five percent” thinking, and get started with a data-driven approach to an annual legal budget.
➤ This 10-step guide on a Smarter Legal Budget provides lawyers a solid first draft for internal discussions (and negotiations) with finance teams. If you also happen to need a free legal budget template, just let us now – we’ll send you one via email.
➤ This 8-step guide on a Legal Department Strategy is best for a straightforward plan that will fit on one page, so that in the year ahead, you can easily reference and execute it – then measure and report on your legal team’s success. We also have a free editable template ready to share via email – get in touch.
For Law Firms: Start Tracking Your Budget
Like any well-crafted legal document, there’s a disclaimer for every law firm’s budget: it is unique to your team. To list all planned expenses and revenue, any low-tech (or no-tech) spreadsheet template will prove helpful. However, to get a sense of how well you’re tracking against your budget or whether you need to adjust any of your projections or document any expenses you didn’t account for, a digital (cloud-based) practice management solution will help stay on top of your data.
Check out how our partner solution Matters.Cloud enables attorneys to make law firm revenue more predictable and keep track of their budget. A law firm’s client portfolio, fee structures, collection rates, team coordination and payment delays can all impact cash flow. Getting the team more organized on matter management has a direct influence on your law firm budget, too.
For law firm leaders, it’s good practice to assess every month if they’ve collected on all client invoices. It’s also a diligent practice to review and reassess the law firm budget annually. With a dashboard view of previous years’ performance, a legal practice management tool will allow lawyers to easily update law firm goals that have evolved over time, and ensure that the next year’s budget accurately reflects day-to-day operations.
Work smarter: Tools that increase legal budget efficiency are worth the cost
Several studies show that lawyers spend valuable working hours doing non-legal, highly administrative tasks like registering client opportunities, opening new legal matters, issuing bills, tracking invoices, and logging time or expenses. Yet most of these repetitive tasks can be automated with a matter management software that was specifically developed for lawyer end-users: an in-house legal team or a law firm.
If you have any questions about our selection of tools for managing your legal budget or would like further guidance in this context, leave us a note below!
