Document Management System in Legal Practice

In this article, we seek to identify the tangible business results that a good document management system could produce for a legal practice. We look first at the business of legal practice, then at the documents generated in this business and finally examine how a document management system could improve business results.

Law Firms and Legal Practice

Law firms carry out legal practice. A law firm could be created by a single lawyer setting up a practice or it could be an association of a thousand or more lawyers working as partners, associates and/or in other roles.

Legal practice typically consists of:

• Providing advise to clients about their legal rights and responsibilities


• Representing clients in civil or criminal cases


• Representing clients in business transactions like mergers and acquisitions

• Law library - Lawyers need to refer to statutes and rules to identify the finer points of law that apply to their current assignment. They would also need to look up past legal interpretations and precedents that are applicable. A large library of statutes, regulations and case law is thus a typical part of their armory.


• Time sheets and work records - Lawyers bill for the time they spend on particular assignments. It follows that they must meticulously record the time they spend on each assignment and the kind of work they do. Otherwise, they might under or overcharge their clients, leading to undesirable results.


• Cash management - It has been estimated that lawyers have to keep in reserve adequate cash to meet different payable commitments for 105 days. The work they do remains unbilled on an average for 65 days. Billed work remains unpaid for a further 70 days. As a result they get cash for their work after 135 days. They themselves might be able to get 30 days credit for paying their payables. Deducting this 30 from the 135, they have to find cash for the payments due during the remaining 105 days. Effective management of cash flows would need continuing preparation and updating of control documents like


• Cash Forecasts


• Unbilled work and times


• Unpaid bills and due dates


• Schedule of payables by due dates


• Accounting - Like any business establishment, law firms also have to keep proper records of their fixed assets, liabilities, revenues and expenses. Different kinds of "books" have to be kept and reports generated in this process.


• Payroll - Though part of accounting, payroll deserves special mention considering the many statutory requirements to be complied with when compensating employees. Employment contracts, attendance records, pay and benefits computations, pension funds and health and safety related documents all go to make payroll an elaborately documented function.


• Correspondence, contracts, briefs and other documents - These kinds of documents are the "raw materials" and "finished products" of this business. In a sizable practice, their volume would be huge, posing problems for effective management.


• The number of "finished products", in the shape of the large number of "forms" such as Landlord-Tenant agreement, Mortgage agreements, M&A agreements, Employment contracts, Supply contracts, Last Will & Testament, and so on are bewildering.

• These days, instead of creating and maintaining a law library of bulky paper books, law firms subscribe to online databases that are continuously updated. These databases provide search facilities that bring up relevant documents in a fraction of the time taken traditionally.


• The time you spent for each client must not only be recorded, but also billed without fail. A system must be in force to ensure failure-proof billing.


• Cash flows must be estimated and arrangements must be made to meet any shortfalls foreseen. This again is achieved by managing the creation, updating and review of relevant control documents and the practice of taking timely action warranted by the situation thus forecast, in a systematic manner.


• Accounting records must not only be "kept" but also used to generate timely and meaningful reports on key result areas such as profitability, timely billing and recovery, and excessive spending over estimated levels.


• Computerized accounting and payroll systems could speed up the processes, generate more meaningful control reports and avoid errors. All these contribute significantly to better business results.


• Managing correspondence and communications is far easier, and less expensive, with Web-based systems such as e-mails and voice mails.


• Instead of "reinventing" the numerous and complex forms such as different kinds of contracts, the law firm could download templates from Web libraries and adapt them to meet specific needs.

• Enable you to work with increased effectiveness, producing more and better quality results


• Minimize errors and such hazards as damage to or loss of important documents.


• Enable you to control critical areas like billing for time spent,


• collecting bills sent and monitoring cash positions


• Maintain excellent client relationships through effective


• communication even if you are on the other side of the world


• Monitor individual and overall results and take timely actions

Article Source: Free Articles - http://www.articlesworldonline.com

About Author:
Ademero, Inc. develops document management software. Visit their web site devoted to document management at www.ademero.com. Browse the resources section which includes the largest collection of posts from real users reviewing all of the most popular document management systems available.

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