It might be easy to assume that it is predominantly the largest firms that have access to the resources to drive this new type of insight and the cultural change that goes hand-in-glove with it. However, this is not the case. Mid-tier firms have the same complexities - and therefore the same demands for transparency around profitability - but they have the benefit of agility and senior-level buy-in to drive change forward at a rapid pace, as US-West Coast based firm Newmeyer Dillion has found.
Lisa Waligorski, Executive Director, and Kelly Hess, Controller, share how BigHand Business Intelligence and AlertManager have helped them achieve their goals.
Background
Newmeyer Dillion is a multi-service law firm that provides both litigation and transactional representation in a variety of practice areas. While the firm has strong roots in construction and insurance work, today it provides representation in a comprehensive range of practice areas including: business and real estate litigation, insurance and risk management, real estate and corporate transactions, labor and employment, land use and eminent domain, environmental and bankruptcy.
It was this expansion of its practice areas, along with a rebranding in 2019 that led to a greater need for financial transparency and reporting. As Lisa Waligorski explains: “Before we went back into full-service business litigation, we had a handful of large developer clients and it was relatively straightforward to keep on top of the key financials, such as collections, AR, and profit. However, with the expansion into additional services came complexity - complexity in terms of the rates we were charging, who was working on which matters and the rates they were being billed at and how that might affect the profitability of a matter. It also added complexity in terms of making sure we were staying on top of collections across a significantly larger number of clients, and clients of different sizes - and whether we were taking on new matters for a client when we might still be owed payments for an outstanding matter. Suddenly, all those little bits of potential margin erosion and profitability by client and by partner became hugely significant.”
Kelly Hess adds: “We simply lacked the reporting on the information we needed to help run the firm as effectively and as profitably as possible - as well as being able to provide our clients with full financial transparency.”
Customized and flexible data visibility
BigHand Business Intelligence is an advanced financial BI solution for law firms with role-based reporting via intuitive dashboards to help improve cash flow and profitability. The flexible data warehouse replaces manual reporting with data visibility from firm level to individual clients and matters. Self-service analytics provide controlled access to relevant, visually represented metrics that empower users with immediate financial insight.
“The flexibility and configurability behind BigHand Business Intelligence have allowed us to build custom reports for our different users, from attorneys and partners - even our managing partner, who is fully vested in this initiative,” says Kelly. “Using BigHand’s ‘cube’ data reporting structure, we have been able to have custom reports built on pretty much everything related to time and billing, including associate billable hours and workload, which helps our partners to optimize workflows; the rates associates and partners are billing for work, which allows us to maintain consistency across the firm and make sure we’re catching little things that might otherwise have fallen through the cracks.”
“In essence, it boils down to the fact that, prior to BigHand, we didn’t know what we didn’t know,” adds Lisa. “Now, through a few straightforward keyboard pushes, from a centralized dashboard that has our billing data in Aderant integrated with BigHand, we can run reports that keep everyone accountable and focused on our clients first and then our profitability. What’s more is that it’s supported a huge culture change within the firm, where we now get individual attorneys and partners coming to us and asking for rate reports and AR reports, so they’re able to be proactive and stay on the front foot when it comes to profitable client engagement.”
Proactive Alerting
In addition to deploying BigHand Business Intelligence, Newmeyer Dillion has also integrated BigHand’s AlertManager solution, an alert and notifications tool that sends configurable alerts to users via email, desktop, or web interface. “The main idea behind implementing AlertManager was to get the AR information to our billing partners for the matters they’re working on; to identify any issues and support them in their collection efforts,” Kelly says. “However, it quickly morphed into a tool we’re using far more strategically as our team has become more involved in collections.”
“The solution has become a means for us to track our clients more generally,” Lisa adds. "Are we going to open this new matter when a client has a tremendous amount of outstanding debt on other matters? AlertManager has really become a very useful tool for us to better manage our matter intake in that respect.”
Newmeyer Dillion has set up AlertManager to automatically send a 30-day report if collections are outstanding, as well as a 60-day report. Outstanding payments are discussed with the billing partner and reviewed fortnightly thereafter - and if issues remain unresolved, they are escalated to the firm’s managing partner, who will then make a call on whether, for example, any new matters are opened with that client or alternative resolution is sought. In addition to enhanced insight delivered proactively and automatically, AlertManager has saved Newmeyer Dillion’s finance team a significant amount of number-crunching and reporting time - time which can be redelivered into enhancing processes to further improve the firm’s overall performance.
Indeed, one of the firm’s latest initiatives is working with BigHand to develop a profit and loss statement. Using this latest report, we will be able to easily review an expected budget on expenses versus the actuals in Aderant,” Lisa explains. “It isn’t something that we have previously been able to track, but it’s another example of where lots of seemingly small discrepancies can add up to significant sums of money that will affect our profitability - and BigHand is helping us with all these elements of profitable business operations,” she concludes.
Conclusion
To maximize profitability, it is now more pressing than ever for law firms to develop better financial understanding and provide the right level of timely financial information to attorneys and partners in a timely and easily-digestible way. This will improve their commercial confidence and insight to support effective client engagement and reduce the administrative burden on finance / operational teams whose efforts can be best placed elsewhere to optimize processes and working practices.
As Newmeyer Dillion affirms, the tools and technologies that enable firms to embrace a culture of profitability are not only reserved for the larger organizations; mid-market and smaller firms with their inherent agility and fleetness of foot can rapidly make company-wide change that delivers a strategic commitment to profit.
