Research conducted by the Law Society in their last benchmarking report found that 90% of the fees generated by fee-earners at SME law firms were used to cover their costs.
Put another way, over the course of a calendar year, these fee-earners wouldn’t cover their costs until November 29th, which may be a reason as to why the Law Society has suggested that some smaller law firms are currently struggling.
With that being said, it wasn’t all bad news. The report also provided an example that indicated that a law firm of 20 fee-earners, with a charge out rate of £175, recording the average of 1,100 chargeable hours in a year, could improve profitability by almost £40,000 with just a 1% improvement in productivity. In reality, this increase would represent an additional six minute unit, per fee-earner, per day.
Where do fee-earners at law firms find that additional 1%?
It might sound like a tough task, asking the fee-earners at smaller legal firms to find an additional six billable minutes per day, but there are suggestions that it can be done. During this study, the Law Society also found that fee-earners would very rarely record in excess of four chargeable hours a day, meaning they’re likely to be spending the rest of their time on more administrative tasks, some of which, get in their way.
If we look at another study, this one conducted by Samsung, a percentage of that time could be lost to technology. Samsung found that 91% of SME employees lost time during the working day as they had to help their colleagues with IT issues. What’s worse is that they also found that 63% of these individuals spent between 15 and 45 minutes per day offering this help, meaning that over the course of a year, fee-earners could be losing days, if not weeks, to various IT issues.
Turning 15 – 45 minutes into just 6.
Given all of this, it could be suggested that law firms wanting to increase the billable hours of their fee-earners, should try to reduce the amount of time they spend dealing with IT, but how?
To begin with law firms can ask their fee-earners if there are any issues that get in the way. Is there anything that immediately springs to mind or any employees that frequently ask for help? It might seem like a simple first step, but these small conversations can often unearth a range of inefficiencies within a company. It might be something large and obvious like recurring downtime, but it might be something small, like a difficulty to transfer phone calls. It could be something you’re used to dealing with but haven’t addressed the root cause of yet.
By creating an environment in which employees can be open and honest with their feedback, law firms will uncover a range of low hanging fruit, they can resolve quickly, to start giving their fee-earners some additional time. We know that just a small increase in productivity will have a large effect, so employees should be encouraged to share their ‘niggles’ and those tiny issues that may seem too insignificant to even raise. A saving of just a few minutes a day can be quite significant when viewed across the whole company.
To read the full blog post and three additional ways that law firms can improve the productivity of their fee-earners head over to the Acronyms blog: How To Improve Productivity At Law Firms.
- Log in to post comments