Software solutions: putting the management into practice management systems

If practice management software really is meant to be something more than just a souped-up solicitors' accounts system, what sort of features should you be looking for?

The heart of any practice management system (PMS) is a database containing cross-referenceable client and matter files, as well as links to the accounts ledgers.

This is in contrast to traditional legal bookkeeping software where the ledgers were the core element.

Do not be deterred by the jargon - a database is essentially just an electronic filing cabinet that allows different pieces of information to be extracted from it in almost limitless combinations and permutations.

For example, you could produce a report identifying all the clients from retail businesses who have spent more than 5,000 in fees with you over the past nine months on employment-related work.

It is also worth noting that while you may acquire your PMS from one of the many specialist legal software suppliers trading in this market, the actual database engine itself will be a third-party product.

Currently, the four most frequently encountered databases incorporated by suppliers into legal IT systems are Informix, Microsoft Access, Microsoft SQL Server and Progress.

As mentioned last time (see [2002] Gazette, 12 December, 11), the purpose of a PMS is not merely to perform bookkeeping but also to ensure that a firm's managing partners, practice managers, department heads and anyone else with management responsibilities have access to and can analyse the client, matter and financial information they need if they are run their firms on a sound business footing.

For example, how much money is tied up in unbilled work in progress? Who are the most profitable clients? Which areas of legal practice, by work type, branch office or any other permutation, are growing and which are declining? Are departmental budgets and targets being met? Which fee earners are pulling their weight and should be considered for advancement, and which are not?

A modern PMS can produce all this information and, more importantly, it should be able to generate most of this information more or less automatically and immediately via a library of pre-defined or simple-to-formulate management reports and key performance indicators (or KPIs).

The main benefit here is it gives partners and managers access to up-to-the-minute information.

This is in marked contrast with earlier accounts systems, with which the production of routine reports was a labour-intensive process and non-standard reports often had to be commissioned before being produced at great expense - and often inordinate delay - by a software company.

Charles Christian is an independent adviser to the Law Society's software solutions guide.