My favorite small business is one that many people (often including those who are in it) don’t even think of as a business: the single-practitioner law firm. Of the one and one-quarter million lawyers in the United States today, half of them (according to the American Bar Foundation) are solos that hang out their own shingles and practice in every city of the country.
These lawyers provide the bulk of the legal work for the “other “99%” of the population beyond Corporate America. This large, underserved customer group includes individuals, families and smaller companies that can’t afford big law firms and don’t fit their skill set. These customers offer a lot of work to solo firms with costs flexible enough to be affordable in doing wills, documenting real estate purchases, handling family law concerns and advising on taxes. And that affordability depends on the use of technology.
In essence, technology has freed small firm lawyers to do more, even as it has empowered clients to ask for more. That requires small firm lawyers to partner with their clients, and work to reduce client legal costs through efficiencies that bring in more work and revenue and thus maintain overall profitability. This must be done within the formula that defines all business success: P = R – E. Profit equals revenue collected less expenses. Using technology to provide efficiency is essential to giving clients the kind of value that builds trust in their lawyer.
Small firms can use case management software, client relationship databases, knowledge management databases, e-discovery software and more to improve legal service efficiency and quality, at the same time lowering legal costs to their clients. The client cares about results and the overall legal cost. And only technology can reduce the cost of operations and thereby allow firms to pass on to the client some or all of those savings.
Another example of this kind of efficiency is our old friend the scanner. Lawyers are unique as small businesses because they are legally bound by Rules of Professional Conduct that, among other things, require that their client files be “appropriately safeguarded” for up to 10 years. In the past this burdened solo law firms with the cost of storing hundreds of file boxes. Today solos can simply scan everything, keep the scanned and searchable electronic files in multiple locations for security, and shred everything else, all in compliance with the Rules. It epitomizes a small business solution – fast, effective and cost-efficient.
Lawyers themselves still debate whether the law is a business or a profession. For the 600,000-plus solo lawyers, the answer is simple. They are small businesses from start to finish – and the most successful ones use technology as their key to effective client service.
Ed Poll (@LawBiz) is a ScanSnap Squad contributor and an award-winning legal management consultant with over four decades of professional experience. Ed has also had previous experience publishing on the ScanSnap Community.