In this article, we focus on the last step in the revenue cycle, payroll. At LawMaster, we understand the crucial and sometimes fraught role payroll management plays in your firm's operation. How a firm rewards its employees and owners can have a significant effect its growth, morale, and culture. Here are three ways in which LawMaster's integrated payroll functionality provides essential support for your firm's operation.
Analyse Productivity and Increase Transparency
In a business that depends upon human capital as much as law practice, it is important to have maximum visibility into each team member's contribution to revenue generation. Not only do you need to set compensation appropriately and consistently, but it is often critical to morale and long-term firm health to be able to explain compensation decisions to individual employees who take justifiable pride in their own contributions.
In order to manage payroll effectively, you need to understand how each staff member's efforts translate to receipts, according a variety of metrics, including new client acquisition, new matter generation, time spent on matters, differing fee structures and billing rates, and performance of non-billing firm service, to name a few. The more you understand how each team member's work translates into revenue and firm operation, the better you can be at aligning your employees' and owners' compensation with your firm's financial goals, and with their own and each other's expectations.
Take, for example, a scenario we have frequently observed: two lawyers in a firm who go about their work in distinct ways. One is an extrovert with a particular talent for attracting clients and high-grossing matters, but who tends to delegate the day-to-day management of matters to colleagues. The other is an introvert who does not necessarily excel at the client-generation aspect of the business, but has a sterling track record of winning cases with sophisticated and artfully-crafted written arguments. Each makes an important contribution in the revenue generation cycle, but how does the firm compare them and set their compensation accordingly when their inputs differ so markedly? The answer is by having an integrated law practice management solution, such as LawMaster's, that allows the firm to generate reporting across the spectrum of firm management tasks, allowing accurate measurement of what each employee contributed to overhead, capital investment, and profit through their unique efforts.
Compare Practice Area Performance Over Time and Across Specialities
By a similar token, many law firms provide services across a broad range of practice areas. Some areas generate revenue steadily, while others are less predictable. Some follow macroeconomic business cycles, others have billings independent of the economic climate. Some rely on a relatively small number of repeat clients for the bulk of their receipts, while others rarely serve the same client twice. As a result, year-over-year, practice areas will perform differently relative to their past performance, and relative to each other, making the task of compensation a potential challenge. However your firm has chosen to reward its employees, you will enhance your payroll predictability and consistency over the long-term -- and have a good chance of keeping your employees and owners happy -- by having an integrated solution like LawMaster's that allows you to compare practice area performance over time and to each other.
Gain Efficiencies in Financial Administration and Reporting
Having an integrated legal practice management solution like LawMaster's that includes payroll functionality also creates cost-saving efficiencies for your firm. Payroll and its attendant human resource-related issues (such as fringe benefits, paid leave, and so forth) take up a significant amount of your firm's administrative workday. With a solution that includes payroll functionality, payroll-related data need only be entered into the system once, reducing the probability of error and inconsistency. Time can also be saved by automating payroll functions, such as emailing payslips directly to employees. And, profit and loss reporting to firm management and/or accountants becomes far easier by integrating payroll data -- often a firm's most significant expense item -- into comprehensive financial overviews.
These are just a few of the benefits LawMaster offers by integrating payroll functionality into its law practice management software solution. To learn more about how LawMaster can help with your firm's payroll tasks, contact us today.