Rent vs. Buy – The SaaS Decision – part 2

By on March 13, 2011

Some people, me included, have always been “buy” type people, maybe it’s just old fashion. We buy, we just don’t like to rent or even borrow most things. Many businesses face the same decision as they review their options for implementing internal software. There are compelling reasons for both software models, in-house licensing and cloud based SaaS.

 In my previous blog posting I covered SaaS benefits; here are a few of my thoughts on traditional in-house software licensing.

 In-house traditional software.

  1. In most cases today, full enterprise level software, especially utilizing database management like financial management systems are best kept in-house. Primarily because there are not any viable SaaS options for mid-large size firms. In addition, firms need tight integrations among many other software systems that are already in-house.
  2.  There is a big difference in processor and memory requirements for enterprise financial management systems vs. other applications like document management. Hosting a DM system off-site is more about file storage sizing and access. In general, lower transactional processing applications not involving complex data structures are fine in a SaaS environment. The economies of SaaS disappear quickly when a large amount of computing power is needed for multiple users.
  3. I’m always concerned about the ease and control of data retrieval. In some SaaS applications it is quite easy to export out all of your data, in case, for example, you’d like to move to a different arrangement. However, with more complex applications where large amounts of data are stored in equally complex databases, extracting it from a “multi-tenant system is a real issue.
  4. The SaaS world is built, for the most part around a “multi-tenant” software model. Your data is actually mixed in with everyone else’s data and the application knows how to get it out. But you can’t. If you had an in-house financial management system and wanted to change vendors, you could conceivable extract the data yourself (or hire a consultant) and move to a new system without notifying your existing vendor until you thought it was proper. However, in a SaaS system, you don’t have a lot of choice. You are at the mercy of your SaaS provider. I’m always concerned about the uncertainty and costs of asking a SaaS provider for help converting to another system.
  5. I have a little bit of experience with the above issue of moving data from a SaaS vendor. In 2010 we decided to leave our long time, big name, on-line CRM system for an in-house Microsoft Dynamics CRM system. So we just called up the big name SaaS provider, explained our intentions and asked for help extracting millions of entries from the last 10 years or so from their system. It was amazing how little help they were and how crude their extraction tools were, if you wanted to leave their system. Of course, we had to licenses some SaaS type extraction tools just to do the all the work ourselves.
  6. Many times, the costs for SaaS only look attractive in the short-term. I recently saw some pricing for a legal market SaaS offering for a “practice management” system. On the surface it looked attractive, then I calculated the total cost of ownership over say, a 8-10 year lifecycle with 100 users and I was astounded. It no longer looked like a bargain at all. Some analysis indicates that SaaS pricing is based on a 28 – 36 month amortization of what an in-house enterprise software license would likely cost. If you keep it for 10 years you may end up paying 3-4 times as much money.
  7. The sales pitch for SaaS often includes the; you don’t need hardware, you don’t need to manage the system, and other similar claims to help justify the pricing model. The fact is that, most mid-large size law firms need to maintain a full IT infrastructure of networks, servers and desktops anyhow. The extra burden and costs of adding one or more virtual servers to this infrastructure may not be a big deal.

 At the end of the day there are all business decisions and for each decision the buyer needs to ask, am I a “renter or a buyer”?

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Categories: Best Practices, Financial Management, Law firm billing, Practice Management, Technology

Rent vs. Buy – The SaaS Decision – part 1

By on March 6, 2011

Some people, me included, have always been “buy” type people, maybe it’s just old fashion. We buy things, we just don’t like to rent or even borrow. Many businesses face the same decision as they review their options for implementing internal software. There are compelling reasons for both software models, in-house licensing and cloud based SaaS. Here are a few of my thoughts.

In the SaaS Camp:

  1. Cloud based SaaS applications look particularly attractive when they are “specialty” type products that are not “enterprise” level of usage. For example, we use such products as ExactTarget for email marketing and SurveyMonkey™ for client surveys. These are highly specialized services, used infrequently, and not worth the costs to bring in-house and manage. SaaS is the obvious choice.
  2.  In the example above, the amount of data and confidentially of that data is not of utmost concern. Confidentiality is important in this case but not to the extent that we don’t want the information outside our facilities.
  3. Another issue is getting data back, if we needed it. I’m not too concerned that the data we store on these sites within their applications is so crucial to our business that we would be damaged if we couldn’t easily retrieve it.
  4. Costs may be a major benefit in the SaaS camp, depending on the type of application needed. The convenience and small cost of a monthly fee on a credit card is a definite convenience.
  5. We use Chrome River for on-line expense reporting. The justification in this case is that, it is a “best of breed” specialty product, attractively priced, used somewhat infrequently and other than manual spreadsheets we didn’t have a better way of managing this process. An easy decision.

 As you can see there are some real benefits to having the right SaaS tools. In my next blog posting I’ll cover why I think in-house enterprise software looks good.

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Categories: Best Practices, Financial Management, Law firm billing, Practice Management, Productivity, Technology

“iPad and the Apple – The Pros and Cons of Mac-king it”

By on February 8, 2011

The post holiday doldrums have set in, the credit card bills have arrived, and techno-geeks everywhere are enjoying their new toys. Apple wins again; this time with the iPad, the iPod Touch and the iPhone 4. I will admit, I am a PC and proud of it. But, the uproar Apple products cause sparks my interest. Although I think PCs are superior to Macs, especially in a law firm environment, I would like to be educated on this opinion.  So here’s my take on the main differences between Macs vs. PCs and how viable is this product in the law firm environment.

  1. The first thing that comes to mind is that Mac just looks slicker.
    There’s a reason the Mac commercial features a cool beatnik type guy and PC is a buttoned up nerd. Macs are cool. They have a bright screen, with the backlit Apple symbol and especially appealing keyboard buttons. Apples are well designed computers and PC companies have spent a lot of time trying to catch up, but never do. Advantage Mac.
  2. Macs allow the user to run two operating systems. PCs do not.
    The Mac user is able to run both OS X and Windows. PC’s do not enable users to run OS X (as far as I know). OS X is the operating system in a Mac. It is user friendly and efficient, Windows 7 tries to close the gap, but never will.  A user can choose to use Windows as the operating system on a Mac. Advantage Mac.
  3. PCs are compatible with more software than Macs.
    When it comes to legal software or any other kind of software for that matter, as of now, PCs are the way to go. Many software companies are not Mac-centric. Most software is designed to run on a Microsoft operating system and although Macs have plenty of applications that work with them, outside software vendors can’t “break through”. This could be especially difficult in the legal arena where time and billing software, and document management are key enterprise products running in the firm. Advantage PC.
  4. Price tag – PCs are generally cheaper and more customizable.
    PCs can be built from the ground up (I’ve done it before). The same amount of RAM, hard drive capacity and processor can be purchased for a lot less in a PC than in a Mac. PCs are also much easier to customize. Individual components can be added very easily and RAM, etc. can be added on for little cost. Advantage PC.
  5.  Macs retain their value.
    Whereas used PCs are a dime a dozen, Macs are well made and tend to retain their value better than PCs. They tend to be easier to sell; both the parts and the unit themselves. Advantage Mac.
  6. Macs are user friendly.
    As aforementioned, I am a hard core PC user. I’ve heard, though, that Macs are very easy to use. They are intuitive and well made. I always think of Macs as better suited for creative types, but it seems they have become more mainstream and tweaked design and other interfaces for the computer “layperson”. Advantage Mac.
  7. It is easier to upgrade with a PC.
    Honestly, more businesses use PCs. They are cheaper and easier to upgrade and there are more choices. Mac users are limited to the Apple product line and often upgrades are expensive and cumbersome. Advantage PC.

I guess when it’s all said and done, Macs vs. PCs is a matter of choice. It does seem that most firms, and businesses in general, are using PCs and, to me, for good reason. They are cheaper, more customizable and run more software applications. If you have a different opinion, I’d love to hear it. As more and more applications move to the cloud, the desktop may not be as important as in the past.

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Categories: Legal Marketing, Productivity, Technology, The Legal Market

Expose them – Your Queries

By on January 16, 2011

This is my third blog posting examining the problem facing law firm CFO’s who need to get critical data from their financial management system into Excel spreadsheets

 1st posting – Challenges faced by CFO’s

2nd  posting – Current choices and new requirements

 In this posting we’ll discuss what turns out to be a relatively simple solution to inserting data directly into Excel spreadsheets from a financial management system utilizing a Microsoft SQL Server 2008 database. Using Service Oriented Architecture and Microsoft Communication Foundation vendors can expose hundreds or thousands of queries that already exist in their systems but are not currently visible to an end user.

 All financial management systems use SQL queries to retrieve information that is displayed on screens, included in reports and used to process transactions. Queries are the underpinning of data retrieval. A query describes the data to be retrieved, what is to be included or excluded, where the data is located, and all other criteria. Programmers build, then use these queries satisfy the inquiry or output desired by the end user.

 If vendors just expose these queries with easy to understand descriptions, the user would just click on a query and insert the data from the database directly into various spreadsheet locations. With a little more work the vendor could write an Excel “Add-in” that would help perform even more advanced capabilities.

 I’ll spell all this out in my 4th blog posting on this topic.



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Categories: Best Practices, Financial Management, Technology

Internal Benchmarking and Business Tools – Where do you rank?

By on December 21, 2010

The term ‘benchmarking’ gets been tossed around a lot about this time of the year as firms develop their 2011 budgets. What does it mean to your firm? To most it is the process in which firms compare cost, hours recorded or the quantity of work against another firm of similar demographics or size. The gauge is somewhat the same across the board; people use surveys from providers such as Redwood Analytics or Altman & Weil to see where they rank, but how the information is used is another story.  

There are two categories of benchmarking, internal and external. Internal benchmarking is more of an individual thing. This is usually based on the use of business intelligence within the firm.  Individuals, departments and offices can view their ranking in productivity, performance to budget, value to their clients, and other criteria. Many times this analysis drive best practices as a result of fixing poor performing segments.

External benchmarking compares the firm to other firms to find out where they rank by revenue, profit, diversity, pro-bono work or other metrics. Tools such as benchmarking surveys – Lexis Firm Insight 3.0 compiles some of this information on a quarterly basis – are a great way for firms to see where they rank on a more competitive basis, on a group and individual level.

Some of the most useful information is how a firm ranks the profitability of areas of law and even clients. Understanding what to measure and how to measure the “measurables” (if that makes sense), are the most important parts of the process.

Below are a couple of tools firms a firm can use internally to utilize the valuable information already stored in their time and billing software. These tools can help measure and apply the benchmarking information:

Business Intelligence
I’ll start out by saying not all time and billing software systems come equipped with Business Intelligence, but, for the most part, the mid to up-scale systems provide this module.

 The three major components of Business Intelligence software are: data warehouse, user interface for selecting criteria and the presentation layer. Separate from the time and billing system, the data warehouse is a database designed specifically to provider fast analysis of granular data cube-type information about clients, attorneys, billings, cash receipts and expenses. Business Intelligence software allows firms to equip attorneys and other business managers, to gauge and proactively review information from the existing financial system data. This information is pushed to the end user, in a practical format where they can see it easily and compare the stats to others. This is where dashboards come in.

 Dashboards
Dashboards aid in internal financial benchmarking by providing information in a pleasant and intuitive format. The data warehouse can pull up granular information in seconds. Although it’s nice to have information such as profitability and billable hours quickly, in report format sometimes it’s just not convenient to look at. A dashboard provides the end user with an “at a glance” type gauge to see the financial metrics. If the firm provided attorneys with volumes of paper reports, the reports would have little impact, we all know this. When the firm provides attorneys with dashboards that are simple to read, easy to analyze and fast preforming, they will get used and attorneys will be in a much better position to support business decisions and strategic development, and this is only internal use.

I’ll visit external benchmarking at a later date.



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Categories: Best Practices, Financial Management, Productivity, The Legal Market

Ultimate in Billing Legal Confidentiality – Send a Link, Not a Bill

By on December 12, 2010

Law firms may face a dilemma when sending out bills that contain highly confidential information. The routine paper bill sent through the mail may not be secure enough. The use of advanced technology can allow firms to send bills to a client be merely sending a link to a secured web site where the bill can be reviewed on-line or downloaded. To enhance the security model even further, the email message to the client can be generated by utilizing some of the best new features of Microsoft SQL Server 2005/2008, SQL Agent Mail. With this new technology the SQL database directly sends SMPT email, bypassing the firms Exchange Server. By using SQL Agent Mail the database can provide detail auditing, proper queuing and full reliability. If the firm wishes to incorporate Exchange Server into the process CC copies of all emails may be sent to a public or secured Sent Box. Although Exchange Server is wonderful for user generated emails with tools such as Outlook, it can be overly complicated for software generated email.

 The email link to a client’s bill can be routed to a secured site such as greenlegalbills.com where a client can access or download the bill. Greenlegalbill.com provides a direct secured path to a firm’s extranet site controlled by additional security. The firm’s data is protected by full SSL encryption and internal firewalls.

Emailing a link instead of a bill may help firms reduce costs while providing for the ultimate level of billing security.

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Categories: Best Practices, Financial Management, Going Green, Law firm billing, Productivity, Technology, The Legal Market

Law Firm Expense Reports – Why spreadsheets just aren’t enough.

By on November 9, 2010

Law firms share common problems with other business, how to process employee expense reports quickly, while enforcing internal policies. What is somewhat unique about law firms and other professional service providers is the need to capture information when travel expenses are billed to clients. The standard in most progressive firms is a spreadsheet, probably designed by committee that either requires too much input or captures too little to be effective. We won’t even try and compare old fashion paper expense reports.

 Problems with spreadsheet expense reports:

  1. Most spreadsheets offer no data validation, getting correct client/matter numbers or names, expense codes and other important information is very difficult.
  2. Most spreadsheets don’t automatically load directly into the firms accounting software. Re-keying is redundant labor and prone to delays and errors.
  3. Submitting a spreadsheet doesn’t provide feedback of acceptance and payment.
  4. Since the majority of reported expenses are credit card charges, there is no easy way to down load these expenses directly into a spreadsheet.
  5. They are hard to configure to handle complicated transactions like splitting a single dinner between a firm and client chargeable expense or entering a transaction in a foreign currency.
  6. Both clients and the government have receipt requirements for certain expense items; try attaching an image of these receipts to a spreadsheet.
  7. Spreadsheet expense reports are difficult to workflow around for approval without printing hard-copies with multiple signature lines.

 Law firms can substantially improve the expense reporting process and save a substantially amount of money by using secured on-line expense reporting systems. The best service available to law firms is the service provided by Chrome River. The Chrome River system is very intuitive to use, therefore even your less than skilled users will adopt it. One key feature is the ability to link both personal and business credits cards to a user’s account, it allows then to drag and drop the transactions they choose onto their expense report. Firms will like the flexible workflow approval options and the easy way receipt images can be scanned and attached to the reports. After the expense report has been “submitted” by the user, it downloads into most time and billing systems and the user can track approvals and payment on-line.

 Full disclosure, I use Chrome River and I love

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Categories: Best Practices, Financial Management, Going Green, Practice Management, Productivity, Technology, The Legal Market

What are a few days worth ….. A Lot of Cash!

By on November 2, 2010

Law firms are clearly cash machines, truly nice high margin businesses. However, they are somewhat unique in that they operate on a cash basis, collecting cash is really important. Just ask Mary (see my blog postings of July 14 & 15, 2010)

Firms can improve cash flow by implementing best practices and using technology, but what is all this effort worth? If the firm improves collections by an average of 5 days what does it mean in terms of cold hard cash?

This posting will help you understand:

  • How to calculate the Average Collection Period – ACP
  • How much additional cash can be generated by improving the ACP, and a sample Excel report  

Using the Average Collection Period
The Average Collection Period measures the time it takes for a firm to receive payments, thereby determining cash flow.


The above chart can help illustrate the effect that a change in the average collection might have on the investment in accounts receivable for your firm. Remember, accounts receivable represent money that cannot be used for other cash outflow purposes. For example, assume that the average daily billed amount is $10,000 and that your average collection period is 40 days. Now assume that you were able to reduce your Average Collection Period from 40 days to 30 days. From the illustration above, you can see that the reduction in the Average Collection Period reduces the investment in accounts receivable from $400,000 to $300,000. This reduction generates an additional $100,000 annually in cash flow.

 Measuring the Average Collection Period
The Average Collection Period measures the length of time it takes to convert your billings into cash. This measurement defines the relationship between accounts receivable and your cash flow. A longer Average Collection Period requires a higher investment in accounts receivable. A higher investment in accounts receivable means less cash is available to cover cash outflows, such as paying partners.

The Average Collection Period is calculated by dividing your present accounts receivable balance by your average daily billed amount:


The average daily billed amount is computed by dividing your annual billed amount by 360:


Using the annual billed amount and accounts receivable balance from the prior year is usually accurate enough for analyzing and managing your cash flow. However, if more recent information is available, such as the previous quarter’s billings, then use it instead. Be sure to compute the average daily billed amount correctly using the number of days actually reflected in the billed figure (e.g., 90 should be used if a quarterly billed amount is used).


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Categories: Best Practices, Financial Management, The Legal Market

Have “dirty bills” …. just scrub them.

By on October 31, 2010

I asked law firms to send me copies of billing rejection notices; I wanted to see firsthand why corporate clients were rejecting bills, specific entries or withholding payments. And boy, did I get the copies, it is almost staggering. As you might imagine, the more rules, the more rejections.

 So, how do law firms deal with the ever expanding list of do’s and don’t? They spend a great deal of time, read cost proof reading bills by billing specialists before sending them out. This manual process delays billing, delays cash and at the end of the day, costs both firms and clients a lot of money. Even after manual proof reading, the rejections still come and the specialists are back at it again, appealing, re-billing or in many cases just taking substantial write-off’s.

 So, how can law firm’s deal with “dirty bills” just use a scrubber!

 New technology developments provide a way to “scrub” client bills prior to submission to insure they meet client requirements. Bill “scrubbing” checks each bill for a series of client rules and points out time and cost entries that need “help” prior to submitting the bill. Firms using this new technology will make it harder for clients to reject bills or short pay because of not following the billing guidelines.

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Categories: Best Practices, Financial Management, Law firm billing, Technology

Streamline your Way to Bigger Margins – #3 -“Is your Time Slipping Away?” – Time Capture Best Practices

By on October 19, 2010

This ongoing series will visit small (and large) overlooked ways firms can save (or gain) money that can add up to big dividends.

A few months back, I wrote a blog entry about law firm time entry. In it, I outlined the results of a survey on time entry and some best practices attorneys can use to avoid “leakage” or “slippage”. One of the points was “If you have a mobile attorney, let them try a Blackberry or iPhone time capture app; see if it will help improve productivity.” Since mobile applications are used for just about everything these days, I thought I would expound on the benefit of using mobile time capture to avoid slippage, and achieve the most accurate time capture possible.

To begin, what exactly is “slippage”? Although there are many different types of slippage (in stocks, foreign exchange, etc.), law firms experience this phenomenon when they simply don’t bill clients for the work performed. This can occur when work is forgotten, small amounts of time are not recorded that may add up to large amounts of time and/or work is underestimated. Slippage is a real issue that negatively affects revenue and may lead to longer billing cycles, and an overall poor reflection on an attorney’s time management skills.

There are many contemporaneous time capture strategies the mobile attorney can implement to avoid slippage, here are a few:

  • This seems like a no-brainer, but find a mobile time capture tool that not only allows you to create time entries at any time, but also interfaces with the firm’s billing system, saving the time spent re-keying, or keying, billable time.
  • Utilize automatic time capture applications that allow users to record time automatically based on the medium, e.g., phone call, email, etc.
  • Make sure the mobile application has an automatic reporting feature. This will allow you to quickly review time spent on specific client and matters and then simply feed it into your time and billing system.
  • Mobile applications not only help lawyers to actualize all billable hours, they also make it possible to get back to clients right away. In this day and age, stellar customer service is one of the primary keys to client retention.
  • Go beyond the “normal” PDA applications and utilize the technology to the fullest extent. For example, some BlackBerry phones offer digital dictation, document review, work product retrieval, etc. This is another great use of down time while on the road.
  • Don’t be afraid to explore the firm’s existing technology. There may be compatible features that an attorney may not know about – these features can help save time and, of course, help to increase productivity.

    These are just a few small things the mobile attorney can implement to increase client satisfaction, make the best use of time and decrease slippage overall.

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Categories: Best Practices, Financial Management, Law firm billing, Practice Management, Technology, The Legal Market
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