How can legal firms effectively manage resources?

by Legal Author on November 2, 2011

By Peter Collins, managing director, Retain International

For legal firms, especially smaller and mid-tier firms outside of the ‘magic circle’, the importance of improving margins and making the most of existing resources has been brought into sharp focus given the reduced pool of commercial work following the financial crisis. The situation isn’t getting any better as legal process outsourcing (LPO) firms start to look increasingly attractive to businesses looking to cut costs.

In order for UK-based legal firms to compete with LPOs, they need to ensure they are running as cost-effectively as possible so they can offer an attractive value proposition. For these firms, resource management is vital for creating client value, enhancing profitability and maintaining a competitive edge. Work must be planned, resourced and executed in a way that allows a firm to maximise billable hours at the lowest possible cost and achieve the best possible margin. Firms also need to know that they have the headroom to take on new cases and clients, which is particularly challenging in the current economic climate, where headcounts have been reduced and recruitment programmes frozen.

Without the means to report on and analyse internal resources, senior management has no way to identify where resources are being under-utilised or where spare capacity may exist. Trying to offer services at competitive rates is therefore very difficult, making it a challenge to go up against cheaper outsourcing providers.  It can also leave the business vulnerable to spikes in demand if more cases or clients are taken on, or existing cases run over. Furthermore, without visibility across the business, a firm is unable to identify and analyse trends that would otherwise help to improve the business and plan for future work.

Simply using a basic spreadsheet package to track who is doing what will never provide the level of foresight and analysis firms need to effectively manage resources. Although many firms continue to use conventional spreadsheets to plan projects and allocate resources, they are finding it increasingly difficult to maintain visibility across their organisation and manage resources effectively.

Resource management and staff planning tools, whether a spreadsheet or something more complex, can be used to efficiently manage the distribution of client matters amongst their professional staff. These systems can also be used to monitor the amount and type of staff provisioned in support of a project according to the specific equipment and feature requirements of each individual case or client – as well as the requirements of the staff tasked with handling it.

Much of the success of smaller legal firms is now going to hinge on their ability to successfully deliver on a client’s demands while offering a value proposition that can effectively compete with the legal “production line” being offered by outsourcing firms. Often, this is based on the legal firm having sufficient resources available to dedicate to the client and making the best use of the resources the firm has available. The key challenge is to find the optimum combination of experience, sector knowledge and pay grade to ensure the most cost-efficient resources are allocated to the case. Thus the ability to match resources based on these factors and book them in advance provides firms with the confidence that they have the headroom to deliver. It also allows firms to identify and address any potential knowledge and experience shortages in advance. Ultimately, legal services firms in the UK are going to have to fundamentally change the way in which they manage resources if they are to cut costs and compete with outsourced, foreign competition.

About Retain International

 Retain International is a provider of resource planning software for businesses of all sizes. Founded in 1992, it provides cost-effective and flexible solutions to allow firms to effectively manage their staff and resources. With a complete overview of current clients, projects and staff, organisations can ensure they are operating at optimum efficiency and profitability.

 Retain International works with customers in over 65 countries, and has experience in providing solutions to the consultancy, accounting, banking and legal sectors, including PricewaterhouseCoopers, BDO, Shell, Zurich Insurance and Cap Gemini. For more information about Retain International’s suite of resource planning solutions, and for a free trial, please visit

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