If you’re a small or solo firm, you’re a business. Businesses track finances, profits and losses, and taxes. Hear what’s new in financial management tech.
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Peggy Gruenke is the founder and co-owner of CPN Legal helping small and solo firm lawyers manage...
Adriana Linares is a law practice consultant and legal technology coach. After several years at two of...
| Published: | October 30, 2024 |
| Podcast: | New Solo |
| Category: | Legal Technology , Practice Management , Solo & Small Practices |
Guest Peggy Gruenke is an expert in the accounting management tools tailored to small law firms. Gruenke is the founder and co-owner of CPN Legal, helping small and solo firm lawyers manage and grow their business through legal software solutions and outsourced financial management and bookkeeping services.
Let’s talk about your firm’s finances and profitability: how are you keeping track of your business? Hear what’s new in automated accounting packages – but don’t give up on Quickbooks, and don’t cut ties with your bookkeeper.
Online accounting services are great. But they are not meant to replace a professional, especially as your firm grows. You’re not a bookkeeper, you’re a lawyer. But these tools do help with the basics of money management. The challenge is mixing and matching.
Operational efficiencies and financial planning are part of running a successful firm. Don’t shortchange the importance of bookkeeping and managing your income, marketing ROI, expenses, and taxes. It’s vital you keep your finger on the pulse of your business, and there are tools and people who can help you. As Gruenke says, “Treat your business with respect.”
Questions or ideas about solo and small practices? Drop us a line at [email protected]
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Special thanks to our sponsors CallRail, Clio, Practice Made Perfect, and ALPS Insurance.
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Adriana Linares:
Welcome to another episode of New Solo on Legal Talk Network. I’m Adriana Linares, I’m your hostess. And today I have Peggy Gruenke on as my special guest. Peggy’s been on the show before. She is in my world my legal accounting expert and guru. Whenever someone calls me looking for accounting or bookkeeping help, I send them straight to Peggy. She has a world of experience and does great work, so I’m going to let her introduce herself now. Hey Peggy.
Peggy Gruenke:
Thank you Adriana, and thank you for having me back. It was fun seeing you at Clio conference in that media section there.
Adriana Linares:
Yeah.
Peggy Gruenke:
So to your listeners out there, yes, my name’s Peggy Gruenke. I’m the owner of a company called CPM Legal and our true passion is to help lawyers succeed and we do that by providing them with stellar bookkeeping accounting services with my team of now 30 people, Adriana.
Adriana Linares:
Wow.
Peggy Gruenke:
So we’re located in Cincinnati, Ohio. We’d love to help your listeners out there become more successful in understanding your finances and your profitability.
Adriana Linares:
Well, I think we’re going to help do that today with this fun and sexy topic we’ve got planned. We’re going to talk about a little bit about built-in accounting packages and what Peggy sees in that world with her experience dealing almost exclusively with lawyers and law firms. And then Peggy’s passion and a great CLE presentation she’s put together include these four pillars for successful financial growth and profitability that include financial planning, operational efficiency, innovation and customer focus. So those are the things we’re going to talk about today. I’m hoping that we can start with Peggy, if you don’t mind talking about the built-in accounting packages that we are seeing with products like My Case and Clio and Locus. I don’t know very much about them because I just send them to you. The one thing I will usually say, which I think is true, is you’re still going to need QuickBooks.
So don’t think you don’t need QuickBooks because you’re just going to create more work for a bookkeeper or an accountant at quarterly or at the end of the year. So if you could just start by giving us sort of the view of the landscape of how built-in accounting is looking into today’s world of case management systems. That would be a great place to start. I think that’s a question a lot of listeners have right now with Clio having released its accounting package with my case, having been acquired by LawPay and then adding it into their package and think sometimes we’re just not really sure what to do yet with these.
Peggy Gruenke:
That’s a great question and observation. And yes, my expertise tends to lie in Clio and Clio accounting. I have been working with Clio accounting developers for the last 10 months, helping them build a really stellar product. And we have a few my case clients as well in cus as a general statement, what I’m going to say after doing legal accounting for the past 10 years is that these built-in products that you’re finding to work internally are never going to stand up to QuickBooks. I mean QuickBooks has been around for how long? QuickBooks online in particularly 15, 20 years. If you’ll remember when QuickBooks Online came out, it was not well liked, okay. It Still had to develop itself and get to a better place as well. Those QuickBooks online just has a lot more functionality for running larger law firms. Now, I know cleo’s goal is to get to mid-size law firms and get them onto a Clio County. What I’ll say, I’ll talk to Clio accounting for a minute. What I see with Clio accounting, and we have five clients actively using Clio accounting. So that’s been really exciting for me to get that hands-on experience with them is that it has a limited scope, right? And I’m going to going to tell your listeners, if you’re a brand new law firm and you’re looking at getting started, I have no problem setting you up on Clio accounting. It’s a great product. It’s still developing and it’s still evolving and they’ve got a great roadmap built for it. I meet with the developers still once a week, so I have my pulse on that and I feel comfortable recommending that.
Adriana Linares:
That’s what they said too actually when they were on the show, they said the same thing. This is going to be great for smalls and solos just getting started, but we’re developing it slowly. Exactly. And I imagine you could probably say the same for its competitors. They might be a little bit ahead of the curve, but they’re also constantly developing those products.
Peggy Gruenke:
And I feel like Clio is so committed to making this a great product that it is going to be there and I’m kind of excited about that, seeing that roadmap develop. But for your solos just starting, or even if you just started this year and you’ve been doing things by hand, which is not a way to do your accounting, you’re a good candidate too to switch to the Clio accounting product. But I’m going to say Clio accounting, that’s what I know on that grounds be wary of taking your current QuickBooks processes and trying to convert to Clio accounting because we can’t load historical data. They’re working on that as a possibility to do one day. But what I’m going to say is if you’ve got five or years worth of your financials and QuickBooks online and you want to jump to Clio accounting, you’re going to lose a lot of the potential functionality you have set up in QuickBooks online, such as if you use class codes, if you do allocation of profit, there’s a lot of different things you have to think about.
Will Clio County be able to serve those needs and do you care that you won’t be able to run comparative p and ls anymore because we can’t bring that data over. So that’s why I’m sticking with New Solo small firms just started. Yes, let’s get you set up on Clio County and lets you evolve with the product, what’s going to happen. Now, another thing that I think is potentially a problem is lawyers will say, oh, it’s an integrated accounting system. I can do my own accounting work all just remember, you’re still not a bookkeeper, you’re still a lawyer. And the bookkeeper’s job should be with somebody that understands finances and law firm bookkeeping, which isn’t your paralegal, by the way.
Adriana Linares:
Yes.
Peggy Gruenke:
So just don’t get that shiny object as an ultimate like, yes, I can do my own accounting now because it’s integrated, it’s still the time consuming process to make sure everything’s done correctly. I will tell you that Clio accounting’s processes that they’ve got started right now work really well. The integration with Clio manage the categorizing the recording deposits, the recording of trust transfers, they have nailed that down really, really well. Very happy to see that part. But as a lawyer, you’re still not a bookkeeper. So now you’ve got to go find a bookkeeper that knows Clio County or my case accounting or law case, and there are far and few between. It’s not going to happen. It’s not going to happen. And then on top of that, you need an account to file your taxes.
I’m a little bit worried about that. I mean, if you have a good bookkeeper doing your Clio accounting work, then your bookkeeper can prepare your month end statements and your balance sheets and your p and l statements and send them to your accountant to use and then work directly with your accountant to make sure if they have to make adjusting journal entries or things like that to the books which they do we’ll make sure that they get added to Clio accounting so that your books match what you filed for taxes. And I want to just point that out, Adrian, this is probably one of the more frustrating things we see is that we’ll take on a new client, they’ll get their QuickBooks and their QuickBooks, let’s say in this situation it’s relatively clean or they think it’s relatively clean. So we’ll go and we’ll ask for a copy of their prior year’s tax return.
Because what we want to do is make sure that that balance sheet, and if your listeners don’t understand what a balance sheet is, a balance sheet is really probably the most important document your account was going to use to file your taxes. And that balance sheet that they use to file your taxes has to match what’s in QuickBooks so that you’re starting the year off with the right numbers. And that is something that’s missed so many times is they don’t think about having their bookkeeper get their final tax filing report from their accountant so that we can adjust QuickBooks with whatever journal I treasury your accountant did. That’s a little bit of a sidetrack, but since we’re getting to year end and tax filings really keep that in mind when you send off your books to your accountant to do that, if they made any adjustments, those adjustments have to get added back into your QuickBooks or your Clio counting or whatever you’re using to that one. So that was kind of long-winded answer there to your question, but that’s it. Yeah.
Adriana Linares:
Well, let me add a quick side note, which is you’ve been on the podcast in the past and we also had a CPA named Amanda Moore on the podcast. So if you are listening to the podcast on a regular basis and search for an episode called Money Management 1 0 1 for so and small firm professionals, CPA, Amanda Moore was our guest, and we discussed the four reports that you should be getting every month that hasn’t changed, even though the episode’s a couple years old. And the balance sheet in the basics that Peggy is going to mention has mentioned and will mention through the rest of this episode are in that episode. And then Peggy came on. This one is titled O, the Messes We see where Peggy came on and gave us a great list of best practices on how to handle accounting and finance and management. So if this is a topic that is hitting home right now, please go back and listen to those two older podcasts from New Solo from this podcast of course, which are still super relevant.
Nothing has changed with those podcasts unless we mentioned some services or technologies that might be out of date. But the principles and the basics still apply. Okay, Peggy, to sort of put the bow on this discussion, it’s okay to use your built-in accounting package, but you’re going to be hard pressed to find a case where QuickBooks isn’t going to be helpful and isn’t necessary. And you should still have that as part of your tech stack. And if the two products integrate, which they do with today’s modern case management systems, then you’re in the best case scenario. And Peggy, can you tell us, for the most part, a law firm just needs one QuickBooks seat that they also are able to share with their accountant, right? So I have think the starter for QuickBooks for my company, my accountant, my CPA and my bookkeeper can still get in there. It doesn’t cost me extra to give them access. And then I think it ranges because you usually get a big break on your first six months and then after that they start to, so what’s the average cost for that one C? Or tell me if we need more that a law firm would be paying for QuickBooks so we can give them an idea of what that’ll cost.
Peggy Gruenke:
I will answer that. Can I backtrack one second to what you said? Just to make sure we’re not misleading our clients. If you are going to go using a product like Clio Accounting, you don’t want to run QuickBooks parallel to quick Clio accounting, you really don’t want to get in that habit of having two financial packages. If you are a good fit for a Clio accounting product, integrate then be a good fit. Okay? Don’t
Adriana Linares:
Force yourself. Oh, so you don’t need a QuickBooks at that point?
Peggy Gruenke:
Well that’s good to hear. Don’t QuickBooks online, but if you’re not a good fit, don’t fit a round peg into a square hole, right? Then just stay with QuickBooks online. There’s no reason to switch to the nucleo account product unless you’re that new person’s getting started for right now. Okay, now to answer your question, QuickBooks online, boy, they keep raising their prices. Adrian. I know they don’t care, man. I think it’s up to $90 a month now for what’s called Essentials. Actually, plus it’s called plus. And we always recommend plus online. Online plus because it has a better set of p and l profit and loss reports. Balance sheet reports has better reporting functions. And if you’re integrated with Clio, it has a level of integration for the hard cost importer that’s not available on the essentials package. So we always recommend QuickBooks Plus that’s about $90 a month, which to your point includes five user licenses and one accountant license.
Adriana Linares:
Nice. Okay, good.
Peggy Gruenke:
So you could give your accountant access and not pay for that license.
Adriana Linares:
Great. I will just repeat myself as I have done on any, anytime this topic comes up or when I do a new firm consult, which is hire a bookkeeper from the beginning, you cannot be doing your own bookkeeping because what’s going to happen is at the end of the month you’re going to say, oh, I don’t have time to do it now. I’ll do it at the end of next month. Then the end of next month. You think you’re going to find time to reconcile. And here’s what’s going to happen the week between Christmas and New Year’s when you’re trying to enjoy and take a break. You’re going to be sitting there trying to reconcile 12 months of bank statements and figure out where you are with your accounting. So please, please hire a bookkeeper. They aren’t that expensive. You can ask a listserv in your local bar association, you can ask your peers, believe me, there are bookkeepers all over this country.
This doesn’t cost you a fortune who are able to help you on a monthly basis and you will feel so much better when you do this. So if you haven’t done that, make sure you get out there and do that. Okay, let’s take a quick break, listen to some messages from some sponsors and when we come back we’re going to talk about, really we’re just going to continue this exciting conversation about finances and accounting and talk about financial planning, why it’s important, and also operational efficiency. They go hand in hand according to Peggy. So we’ll be right back to talk about those couple of things. Okay, we’re back. I’m here with Peggy Grenke. Peggy, you speak a lot to law firms about the importance of financial planning and what I call financial health for a firm and also operational. What do those two things mean and why are they important for lawyers at any stage in their firm’s lifespan to truly understand financial planning, which I think is the least understood aspect for most law firms of running their successful law firms and also operational efficiency. What does that mean?
Peggy Gruenke:
No, we’ll get into both those. I want to go back to what we said right before the break. We were talking about hire a bookkeeper, do your stuff. What I just want to highlight on that note is don’t pick just any bookkeeper. They actually have to understand how law firms operate. Oh good. And it’s really because of the trust side. So when you said go to your bar association, they may have somebody to recommend, they’re probably going to be able to recommend somebody that understand, make sure you’re going to a bookkeeper that understands how law firms operate. Getting back to your question about financial processes, let’s talk a little bit about, before I get into financial processes, I’d really like to make sure that a lawyer has a vision for their firm. And with vision comes strategy, which comes understanding your financials. So you have to really sit down and ask yourself, do you want a lifestyle business? You just need to make enough money to support yourself. Are you really looking to grow your business? And you can’t grow your business, by the way, if you’re doing your financials in Excel. Alright, that’s the first thing. You need to have them integrated into a financial package like QuickBooks online or something.
Adriana Linares:
Well, I have a feeling a lot of our listeners are trying to do that in Word, they’re not even in Excel in Word.
Peggy Gruenke:
There you go. Yeah. Word in Excel. So the first pillar to get to growth is to get into a financial package so that we can actually document and have data to make decisions on. But having that vision first is really going to help you decide and keep a pulse on your business as we go through cashflow analysis and everything like that. Because some lawyers say, I just need to run a business and support myself. That’s great, alright? But what happens is what I’ll call accidental growth. Okay,
Adriana Linares:
I see this all the time.
Peggy Gruenke:
Oh yeah, I see. All right of a sudden they’re like, oh my gosh, I am getting more business than I can handle. And I love that part of it. Come to us with that need and say, I’m at a point where I really need to get my finances together so that I can make better. I don’t know if I can afford to hire somebody,
I feel like I can afford to hire somebody, but how do I know that? And that’s where we come and play and say, that’s why you need good financial disciplines upfront. We need to be able to build your financial system so that you can get reports, you can get KPI reports, key performance indicators so that you can make better business decisions. And it might sound complicated, but it’s as simple as having a profit and loss statement and having that profit and loss set up with a what’s called a chart of accounts. So you can track your expenses so you know exactly where you’re spending money and how much money you’re bringing in to know what your net income is, what’s your profit, okay, where are you sitting down on profit? Now, more importantly on that profit and loss, when you’re looking about financial disciplines, we like setting up that p and l statement so that we really keep an eye on two expense categories, particularly more than that, but two mainly one’s marketing and one’s just your general administrative expenses. But the marketing one we actually set up, make sure we set that up as a separate item on the p and l end budget as we budget for this stuff, what’s going to grow your firm?
And in the new legal trends report that Clio came out, they had some interesting statistics in there about solo small firms investing in marketing and the return on investment. Now we see that because Clio used our data, but we see that because what I get excited about is I see that they committed to spending on marketing and then we’ll see then we do dashboards for ’em. Adriana that shows their return on investment. What’s their actual acquisition cost? Yeah. So
Adriana Linares:
Hey, otherwise, how do you know where your money’s going and where it’s being best spent?
Peggy Gruenke:
And marketing is such a black hole. Make sure you pick a marketing group that understands law firms. There’s a lot of bad ones out there. Don’t hire your neighbor’s nephew or your neighbor’s son. You really got to treat your business with respect and invest in that area upfront. So that financial discipline starts by having an idea of how much do I want to make? What are my fixed monthly expenses? That’s what we call a monthly nut. Those are expenses that don’t change rent. Paying yourself, paying yourself first. Don’t make that the last thing, don’t Not yourself.
Adriana Linares:
Yeah,
Peggy Gruenke:
Don’t make that. Go to the bottom. Paying yourself. We got rent, we got supplies, we got software. Software spend is another area, Adriana, where we’re seeing an increase due to ai, which is a whole nother topic. A lot of law firms are investing in AI software right now, but if you build that monthly nut, that’s the number that you have to meet every month to break even. Alright? Say it’s $125,000 when you are tracking your revenue, you’ve got a good financial process in place and a good product and you’re looking at your revenue. We do this with weekly cash flows as well, Adriana. So we’ll watch the trend throughout the week and we really, we celebrate. So when I do their cashflow reports and I say, you’ve met your monthly net this week, go out to dinner tonight. So they can then see that everything that’s coming in for the rest of the month is really extra money that they can put into savings or they can invest back in their business or they can hire. So getting back to that, they come to me and they want to grow and they want to hire. We got to do a little evaluation before I feel like I can actually answer that question.
Adriana Linares:
Of course.
Peggy Gruenke:
So then that’s when we dig in and look at the trends, the weekly trends and what’s going on and do they have enough to cover payroll and all that. And I’ll tell you another thing is you don’t have your financial discipline focus on cutting expenses. Cutting expenses is not the way to be profitable and grow your law firm. You guys run a lean business already. It’s probably where the leanest business law firms are really profitable. Businesses can’t, they’re simple businesses. You see that you don’t need a lot to start a law firm
Adriana Linares:
And it’s easier and cheaper than ever to run an efficient law firm today and a profitable,
Peggy Gruenke:
We’ll get into efficiencies in a minute here,
But my point is don’t go looking at your p and l to find out where I can cut expenses, because that’s not how you’re going to make more money. You’re going to make more money by focusing on getting better clients and more clients, which is a whole nother topic in itself. So that’s the financial discipline. The other thing on that financial discipline is looking at to percent of you got income and then you got your expenses in QuickBooks, there’s a report called percent of income. Okay, so what percent of my expenses are eaten into my income? Now? The highest one’s going to be payroll, the next one’s going to probably be rent. The other one’s going to be, and actually, I’m sorry, marketing, payroll and rent. Those are the three highest ones. But you want to make sure that you’re looking at those numbers to see what percent of your expenses are eaten into that income. Okay?
Adriana Linares:
Do you have a percentage that is a healthy percentage that you want to keep at or under?
Peggy Gruenke:
It depends on the firm and in the marketing. That’s a good one. And the marketing sped is that at the beginning of your law firm, you’re going to spend more on marketing. You have to establish yourself, right? You got to get your presence out there, the mature your firm is, and you start getting referrals from your clients or rather lawyers. That marketing spend can actually drop a little bit, but it’s going to be three or four years before you can get to that spot. So that’s why we’ll see 10% on marketing. Expend 38% on payroll. Payroll drips obviously coming down, software’s the one that’s going up. So keep all those in mind. Yeah. I will warn your clients on credit cards. Okay?
Adriana Linares:
Oh sure. Yeah.
Peggy Gruenke:
Alright. I’m going to say this is that a lot of clients say, well, I don’t want to get a credit card. The problem is, is that they’re running all their expenses through their operating account is ACHs and stuff. We’re seeing a lot of fraud happen on bank accounts. And the problem with paying your e-filing and all that stuff directly through your bank account, once that money’s gone, you can’t get it back. If it’s on a credit card, you could dispute it and get it back. And besides it helps you build your credit. The two best credit cards we see for solos law firms is Chase, chase, Inc. And Capital One.
Adriana Linares:
Oh, that’s great. Those are great tips. But I think your tip would be rounded off by saying, if you’re going to use a credit card because the transactions might be more secure and we’re seeing that this is a good best practice, you need to pay it off at the end too. You still got to pay it off, use it for what it’s good for, which is protecting your transactions, but then don’t use it for what it’s bad for, which is collecting debt or gaining debt in order to keep the lights on
Peggy Gruenke:
And it’s still part of your monthly nut. Okay, that’s still part of your monthly nut. All right, so keep that in mind. It’s still expenses that have to be covered every month. They just happen to be on a credit card.
Adriana Linares:
Well, I think that’s a great tip. People ask me about that all the time, and I definitely agree that for security purposes and for the ability to fight or dispute a transaction, that’s a really good tip. I want to ask you a quick question before we move on to our next segment, just because in this segment we talked about hiring and we’ve talked about bookkeepers. Something that I have seen over and over again in my 25 years of helping lawyers and law firms is lawyers not taking a look at those reports and understanding where their money is going. And unfortunately, a rogue employee who has the keys to the kingdom taking money or using it to their own benefit, and there have been times where a law firm has had the most loyal, the most amazing office manager or bookkeeper, and then come to find out at some point that they were stealing money from the firm. Can you reiterate to our listeners just how important it is for you to look at these numbers on a monthly basis? You’re going to know, you’re going to know somewhere, a little flag’s going to go off in your head when something isn’t right, and also just being sure that you are the one signing off on checks or that there needs to be a process for payments over X amount or withdraws. Can you just speak to that for just a moment?
Peggy Gruenke:
I would love to speak to that. Actually. We recently had three new clients probably in the last half of the year come to us because their bookkeeper was stealing from ’em.
Adriana Linares:
I know it’s
Peggy Gruenke:
So sad and it is sad and they, they’re embarrassed to tell you the real, they’re very embarrassed because we didn’t see it happen and she was paying herself but writing the checks to their IT company when really they were being written to her. What I really want to caution you guys on and how this happened with two of the lawyers that had got frauded is their bank allows online bank payments like Chase, which we love how we pay vendor bills for our clients, but there’s a step in that process where you can set it up to say that that has to be approved before the check can get processed. And they didn’t have that set up. So this bookkeeper was writing checks to herself, but booking ’em in QuickBooks as payments to the IT company. So there’s ways to protect yourself by setting up checks and balances. And one of them is if you’re using online bank to have your bookkeeper pay bills, you’re going to have to be the one that approves that. I know it’s an extra step for you at the end of the day, but trust me, it’s worth it.
You’ll kind of see what’s going on with your money too. The other thing that we keep eye on Adriana, and this is the weekly cashflow reports, you can’t wait till the end of the month to look at that data. I’m telling you right now, because when you get your p and l report, you’re going to need an expense detail report, which is something we include in all of our financial packages, which is another one of getting back to Clio accounting versus QuickBooks. These are the type of reports that aren’t so easily to get out of the system right now, right? In our financial packet, we deliberately include an expense detail report so they can see line by line every expense by category that happened for them to look at. They might say, oh, Peggy, you that check for a thousand dollars, that should really go to a sponsorship, not owner draw, whatever, and we’ll move ’em around. But they have to look at ’em. And if they’re looking at a weekly cashflow, when they’re looking at their checking balance at the beginning of the week and then the end of the week, they can question things,
Adriana Linares:
Right? Yes, of course.
Peggy Gruenke:
Why is that number so high? But it does happen. So don’t think you’re immune to it.
Adriana Linares:
Please. We’ve both seen it happen far too often and we hate to see it happen. And it’s a preventable issue if you just pay attention to the business side of your law firm
Peggy Gruenke:
When you’re working with a bookkeeper and you’re giving away the kings do your kingdom, which means bank logins and things like that, don’t let your bookkeeper use your login.
Adriana Linares:
That’s right.
Peggy Gruenke:
Make sure you set up your bookkeeper with their own logins so that you can set the security, their permission levels on things. That’s really, really important. And it’s important for audit control too.
Adriana Linares:
For accountability. Don’t ever let someone else use your login or someone else use someone else’s login. If you’re trying to share a license. Just attorneys don’t do that. There’s no accountability there. It makes it hard for you to keep track of things
Peggy Gruenke:
And not to complicate things even more. But it depends on what bank you pick because not all banks make it easy to add another person to have access to a credit card or Bank of America is ridiculous to work with. They want to charge you $5 a month to add a user. So do your math, do your homework when you’re
Adriana Linares:
Picking those banks
Peggy Gruenke:
Picking a bank. Yeah.
Adriana Linares:
Well, we’ll be right back. We’re going to take a quick break, listen to some messages from some sponsors, and we’re going to talk about innovation and customer service when we get back with Peggy. All right. We’re back with Peggy Grenke from CPN Legal. As we get into this last segment here, I want you to talk a little bit more about operational efficiency and innovation and how maybe those two could even go hand in hand and why they’re so important for attorneys to think about these things when they’re building their law practices or maturing a law practice.
Peggy Gruenke:
What we’re seeing in today’s world, and this has a lot to do because law firms are being driven by the introduction to AI into their law firm processes. Trust me, it’s happening. We’re seeing a huge adoption rate. 79% of lawyers adopting ai. Gosh, Adrian, you remember 15, 18 years ago when the cloud came out, we were pulling their teeth to get ’em into the cloud, right?
Adriana Linares:
This is exciting times.
Peggy Gruenke:
It’s very exciting. So now they’re actually on the front end of all this. So they’re learning to innovate, they’re learning to do things better, and what AI is going to be able to do, and the word AI kind of, I think has a negative connotation right now for lawyers. So I’m going to replace that word with workflows and processes. So the way you get to innovation, efficiency and profitability in your law firm is you have to document everything. And it’s painful, I’ll tell you.
Adriana Linares:
I know.
Peggy Gruenke:
So my point is, is that you can also automate these workflows if you’re using law practice management software that allows you to do this like Clio does with their task list. But you have to document before you can automate. And by documenting, it really forces you to look inward as to how you’re doing things and how you can be doing things better. And that’s where you can look at and say, gosh, I wonder if I could use AI to do that step and get it done faster or better. So document your processes, which is going to force you to look at how you’re doing things and question if there’s a better way to do it.
Adriana Linares:
I’ll throw this in if you’re questioning it, the answer is probably yes. There is a better, more efficient way to do this, and you need to take the time to figure out how to do it, because in the long run, it’s going to help you be a more profitable and efficient law firm and in the end to serve your clients better.
Peggy Gruenke:
And to that point, I’ll tie you into that real fast. One of the things that we like doing when we put together our checklist for each of our clients, we actually reformulate it and make it look prettier than a checklist and give it to our clients and say, this is the processes we’re going to be following every month. Just so there’s a lot of transparency on what’s going on. What I tell my lawyers to do is, if you are DUI, lawyer or criminal lawyer, you have a process you have to follow. It is just repeatable, it’s read through.
Adriana Linares:
This isn’t new. Lawyers are used to following processes and procedures like just add it to the way you run your law firm.
Peggy Gruenke:
So once you document that internally at that new client meeting, you’re going to look really super like a superhero. If you give that client a little printout that says, here’s the roadmap of your case and here’s what you can expect. So use that documentation of your workflow as an additional tool for, we call it the client roadmap. Create a roadmap for your case and share it with your client. That goes a long way to being client focused. So smart, focused, client centered. That’s how we’re seeing innovation is really used in workflows and processes and adding them to your law practice management software so that it’s automated. So as soon as you set up a case that’s a DUI case, it can kick off a workflow automatically,
Adriana Linares:
Specifically for A DUI case.
Peggy Gruenke:
Exactly.
Adriana Linares:
A DUI case would kick off the workflow for A DUI case.
Peggy Gruenke:
Yes.
Adriana Linares:
Divorce matter would kick off the workflow for divorce matter because you’ve created different workflows for these different processes or different matters that have different steps in them, right? That’s the important part. You can’t just create one and apply it to all your areas of law, unless of course you only practice one area of law.
Peggy Gruenke:
And on that note about innovation and integration and efficiency, we’re seeing a huge use of document automation now. And the purpose of this document automation, this is your world, this is, is to eliminate double entry, right? So we are seeing the use of intake forms those, the answers to those intake forms, that data can be imported into your law practice management system so that when your paralegal goes to the matter dashboard, they see all that intake information and no one had to enter it twice. And questionnaires, think about immigration, estate planning, family law, all those forms they have to be filled out. Clio Draft. I will tell you, Clio Draft is an amazing tool and it takes, it’s gotten great me a lot, to use the word amazing. But that is a great tool and it eliminates all that double entry. And from a client focused, client centered way of running your law firm, it really makes you look like the client. Like this guy really knows what he’s doing, right? He’s asking me good questions.
Adriana Linares:
That’s right. And in the end, the easier you’re making your law firm’s life internally, the better you’re making it for your client. So I think those are just really important tips to take away and remember and to find the time to focus on these efficiencies. Peggy, you’ve been as always, just a wealth of information and knowledge and tips and reminders, and I can’t thank you enough for taking the time to come back on New Solo. Can you tell everyone where they can find friend, follow you and learn more about CPN Legal?
Peggy Gruenke:
Absolutely. You can find us on our website, CPN Legal, which has a ton of information. You can also follow me on Facebook and LinkedIn. If you want to inquire about our services, use our intake form on our website. All that data gets right fed into Clio Grow so I don’t have to enter it twice. But more importantly, we’d love to help you. We really want to help you build. You guys are all out there to become business owners, grow your business, support your, and support other people’s families as you grow your business. We want to make sure you’re doing it with a strong foundation.
Adriana Linares:
And I agree, Peggy’s Company and Peggy are wonderful to work with. So thanks everyone for listening to another episode of New Solo, and we’ll see you next month
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New Solo |
New Solo covers a diverse range of topics including transitioning from law firm to solo practice, law practice management, and more.
