Oregon State Bar Bulletin — MAY 2005

Managing Your Practice
THE RIGHT TOOLS
Good software choices can lead to smoother operation
By Dee Crocker & Sheila Blackford

If all you have is a hammer, every thing looks like a nail. Imagine the results in your law office! However, choose the right software tools and the business of law runs more smoothly. To make an informed decision for choosing the right tools, you’ll want to review five chief areas for incorporating useful technology in managing your law business: administrative, infrastructure, production, practice management and communications. This article looks at the first area: administrative.

Administrative technologies include software for accounting, time and billing, human resources and payroll, document management and production, portable document format (PDF) and e-filing. Although you have to purchase most legal software directly from the software company, you can purchase some of it at a discount on the Internet at sites like www.blumberg.com, www.lawbuyers.com and www.pricegrabber.com. Be sure to check the software vendor websites provided for current pricing. Prices given below are approximate for single-user licenses; multiple licensing costs will usually be much different than just multiplying the single cost by how many licenses you need.

Accounting Software
Even the smallest solo practice will probably include some accounting software, such as the relatively simple featured Quicken (http://quicken.intuit.com) or Quicken’s more powerful cousin QuickBooks Pro (www.intuit.com) with added features of time tracking, payroll and estimating. You can set up Quicken 2005 (approximately $50) to handle your general business account and your lawyer’s trust account. You can also get Pocket Quicken for Palm OS & Pocket PC (approximately $40) if you want to track finances on your PDA. QuickBooks Pro 2005 (approximately $300) is a full general ledger accounting system. PC Law (approximately $300) (www.pclaw.com) handles accounting, time and billing, with additional functions available as add-on modules. Time Matters 6 with Billing Matters Plus, Professional Edition (approximately $700) (www.timematters. com) is a fully integrated case management, accounting and time and billing system. ProLaw ( wwww.prolaw.com) is another top program for accounting, case management, time and billing, calendar and conflict checking and offers a package geared to smaller offices with a special purchasing plan, called ProLaw Ready. PeachTree 2005 (www.peachtree.com) is a range of accounting programs from the basic PeachTree First (approximately $100), to the sophisticated PeachTree Premium ($500), the latter of which is an accounting program that gives all of the reporting and functionality of an accounting practice. It is a full general ledger accounting system, but unless you’ve taken accounting courses, this may be too difficult a program for general use without advanced training.

Full general ledger accounting systems for law firms start at about $300 per license. These programs differ from general business accounting packages because they consider trust accounts as short-term liabilities when calculating the profitability of the firm and can incorporate trust activity with actual billings. A general business program generally means the firm will have to customize the application to fit its needs. For instance, many general programs will generate service invoices, but not the type of professional statements usually used by law firms. Having to customize the software can be burdensome, making legal-specific products more practical for some firms.

General ledger accounting programs usually come with a chart of accounts; these legal accounts make for easy monitoring of income and expenses for the firm. Like billing software, billing functionality also is built into general ledger accounting applications, so instead of tracking money activity only for clients, they also track money activity for the firm. Monthly reconciliation is automated, and generating not only bills but also general ledger statements showing firm profit and loss and overall worth is simple to do. Check writing is another standard feature in general ledger software, but usually is not found in stand-alone time and billing applications.

Shopping for features that appeal to and accommodate the level of financial management your firm wants can be made simpler by understanding all the software options available. These can be as varied as the functions that need to be managed in the firm. You’ll find many options when it comes to accounting software.

Time and Billing
Keeping track of billable time is often the bane of an attorney’s existence; time-tracking software can help. The easier the process to track time, the more likely the time will be tracked. You can find some nice time tracking software that can be as simple as the desktop utility, Proj Clock Pro 5.12 (approximately $50) (www. topshareware.com) or as complex as Carpe Diem (www.best-software.com).

Time entries are entered directly into the timekeeping applications via entry screens that list client or matter name, type of activity or expense, start and end date of the work, description of the work, amount of time worked and rate for the work. Billing codes may be preset to include items that are common to general law practices. Another option is pop-up timers for measuring the actual time spent on a particular task. Time entries also may be brought into the software via links or import processes from legal case management systems. Online and PDA time entry also is quite popular.

Time-tracking software can stand alone and therefore may be less expensive than more comprehensive systems. More commonly, however, it is a part of time and billing software.

In addition to multi-featured programs such as ProLaw and Time Matters 6, you’ll definitely want to look at programs that have add-on modules that can enable you to address other administrative needs without needing to purchase different software packages. Tabs3 (approximately $300) (www.tabs3.com) is an integrated suite of applications, including time tracking and billing, general ledger accounting, accounts payable, payroll and check-writing functions. The program can be purchased along with the related case management program PracticeMaster (approximately $150). The website in April included PracticeMaster as a free bonus with the purchase of Tabs3.

Billing is a key administrative process in any private law office. Not all law firms handle accounting in-house. Firms using outside accountants or bookkeepers to handle account reconciliation, statement generation, taxes and other advanced financial management tasks often choose law office billing software. Billing software is very flexible and can cost anywhere from just over $100 to as much as $350 per license. You’ll find the better applications include pre-billing options and the ability to undo and reprint billing statements, along with various options for the format in which information is displayed on bills and for how bills are transmitted (i.e., PDF, HTML or RTF). The ability to track accounts receivable for client matters is standard in billing software. The ability to generate reports drawn from the systems that cover issues such as productivity, work in progress, profitability and accounts receivable is an important management tool for monitoring your firm’s fiscal health. The better applications also have overview or recap screens that put all billing and receivable information for a client matter in one place.

Billing software is useful for tracking client funds or trust accounts and can be set to pay off client bills automatically from trust funds. The software records payments and other transactions, and some systems even allow users to generate and track deposit slips for general and trust accounts. Most programs will generate an income report broken out into fees, costs, and interest.

Billing software can keep track of money transactions for client matters, but this generally is limited to simply tracking time and expenses and then generating bills for these. The systems usually do not perform general ledger accounting or check writing, as does integrated general ledger accounting software.

With advanced reporting for accounts payable and electronic billing, firms can utilize software with more client information management features like calendaring and contact management. Larger firms may prefer systems that are truly integrated with full practice management, so that payroll, accounts payable, cost recovery and online time entry and accounting are included. Unfortunately, the cost of such systems can be steep. Small firms usually can add these features by buying specific modules, at $125 to $500 per module.

Billing Matters (approximately $350) (www.timematters.com) is a time and billing program with expanded features, but it is not a case management program with document generation features, like the stand-alone case management program, Time Matters (approximately $350). You should note that the popular Time Matters 6 may be purchased with Billing Matters so you have an integrated case management and time and billing program. Check the website for the comparison of features so that you purchase the software package best suited for your needs.

BSA Pro (approximately $400) (www.seabill.com) is a time-tracking and billing program that offers a module for the Palm operating system.

Juris Advantage (approximately $1,700) (www.juris.com) combines time tracking, billing, general ledger accounting, accounts payable, payroll and check-writing functions, and it comes with modules for the Palm and Pocket PC operating systems.

PCLaw (approximately $250) (www.pclaw.com) combines time tracking, billing and general ledger accounting that can allow you to manage up to 99 separate trust accounts. It has additional modules available for accounts payable, payroll and check-writing functions.

RTG Bills and RTG Timer (approximately $95) (www.rtgsoftware.com) is a time tracking and billing program that offers a PDA module. This inexpensive program is not as robust as the others, but has the basic functions for a sole practitioner or small firm.

Human Resources and Payroll
Human resources and payroll software facilitate managing benefits, monitoring job performance and tracking work time similar to an electronic time clock. Other software is highly specialized to generate a human resource manual or to administer employee aptitude testing. If you purchase a payroll module, make sure that you sign up for regular updates to monitor changes in law. Some choices are Web TimeSheet 5.8 (www.replicon.com), which is 100 percent web-based and integrates with leading payroll and EPP systems such as ADP, Ceridian and Oracle; HR Office 6.5 (www.ascentis.com), a human resources and benefit management and performance appraisal software suite and Staff Files 4.0 (www.abs-usa.com), which tracks compensation benefits, performance evaluations and time accruals.

Document Management and Production
Document management and production is an important category of software that goes well beyond the folders tree method you are familiar with from your Windows system. You may have heard of some of the more well known software, including GhostFill4 (approximately $300) (www.ghostfill.com), which performs document assembly and document management, or HotDocs 2005 Professional Edition (approximately $650.00) (www.lexis.com), which is a widely used document assembly program that works with both Microsoft Word and WordPerfect. iManage Worksite (www.smartsolutionsonline.com) and WORLDOX 2005 (www.worlddox. com) are both high-powered document management systems which allow you to store and locate all documents on your computer system in a logical manner to save you valuable time and prevent frustration. Featured at the ABA TechShow 2005, QShift (www.ixio.com) is a sophisticated document drafting program, available as an on-demand subscription service that facilitates the creation of documents using drafting rules based on your firm’s best practices. If you draft documents by copying and adapting existing documents, you run the risk of overlooking document provisions that are irrelevant or incorrect. You’d be wise to take a close look at what QShift can deliver.

Scanning software is frequently included with the scanner you purchase. Nonetheless, a scanning software program that warrants a closer look is PaperPort (www.scansoft.com). It provides the ability to drag and drop scanned documents into your word processing program, deal with PDF and OCR document forms and create fill-in forms, as well and neatly clean up scanned documents with an electronic eraser that defines slick. If you’ve ever been dismayed to realize you need a typewriter to fill out a form, you’ll enjoy how easy the job becomes using PaperPort.

Portable Document Format (PDF)
PDF has been synonymous with Adobe, the inventor of the Portable Document Format protocol. There are, however, other programs available at a cheaper price that mimic Adobe Acrobat. Adobe Acrobat 7 Professional (approximately $450) (www.adobe.com) is the newest generation of the software that lets you create PDF documents that can be opened with the free Adobe Reader that is on most computers. Many appreciate that they can open and read a PDF document in Adobe Reader whether they have Microsoft Word or Corel’s WordPerfect, or whether they have a Windows-based PC or an Apple PowerBook or iMac. Document security and integrity has become an issue since metadata – data about your data – has been discovered in documents. Although there are utilities to clean up the metadata imbedded in one’s documents, the incidence of metadata is practically undetectable with the conversion of Word or WordPerfect documents into a PDF format. Moreover, if you intend to share a document, you’d be wise to share it in a format that prevents the recipient from surreptitiously making changes. Check to see if the word processor you are using can convert a document to a PDF format. WordPerfect does this gracefully under the File Menu at Publish To PDF command. You can even drag a "Publish to PDF" icon onto the WordPerfect toolbar to save additional time. For practical purposes, this means you can get away with not having to purchase Adobe Acrobat 7. If you are a Word user, check out Click to Convert 5.5 (www.clicktoconvert.com) ($90) for a quick, easy PDF document converter that places an icon on your toolbar.

E-Filing
Though the mention of e-filing may bring to mind filing tax returns electronically, e-filing here is the court-driven movement to streamline their management of case filings by electronic filing. The format adopted has been PDF for all the reasons you now know. If the prospect of complying with e-filing requirements is daunting, remember that WordPerfect has a built in feature that allows you to convert the WordPerfect document to a PDF format.

Before You Buy
You may have noticed that some programs are for accounting, time and billing, while others are only time and billing or only accounting or some other combination. Be careful when software programs include multiple applications so that you are making a fair comparison when evaluating your software options. When shopping for software, it is frequently a case of comparing apples to oranges. Most software is available in a trial version. This is usually a full size version that is only available to use for a test period of time. Then the software expires unless you pay for it. It is a good idea to take advantage of these trial periods before committing funds and personnel to a program that won’t be the right tool for your law business.

Remember, if all you have is that hammer...

ABOUT THE AUTHORS
Dee Crocker and Sheila Blackford are practice management advisers with the Oregon State Bar Professional Liability Fund. Reach them at (503) 639-6911. .

© 2005 Dee Crocker and Sheila Blackford


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