As law firms prepare for a new calendar year or review their year-end performance, three core pillars emerge as critical to their success: revenue, profit, and growth. Yet, challenges such as inefficient processes, missed billable time, and client dissatisfaction often hinder firms from reaching their full potential.
In our latest Legal Trends Report, we found that half of law firms are achieving just 50% of their billable hour targets at most. With the right tools, including advanced legal software, these barriers can be overcome to unlock greater success.
The challenges hindering growth
One of the most significant obstacles to growth is revenue leakage caused by inefficient time capture practices. On average, fee earners fail to bill one hour per day of work, amounting to 222 hours annually. Compounding this issue, the manual process of inputting time entries consumes another 66 hours per year per fee earner. Altogether, firms lose 288 hours of potential billable time per year for every fee earner on their team.
Even when invoices are issued, many firms struggle to collect the full amount due. A lack of transparency around costs throughout a case often leads to client disputes, resulting in discounts or complaints. On average, firms only collect 89% of invoiced amounts, leaving 11% of revenue uncollected.
Profitability pressures further complicate matters. Manual processes and disorganised workflows not only waste time but also increase the risk of errors. These inefficiencies inflate operational costs, undermining profitability. Meanwhile, rising client expectations demand faster service, greater transparency, and consistent communication, leaving firms struggling to maintain client satisfaction while protecting their bottom line.
Finally, client retention remains a critical factor for sustainable growth. Poor communication, missed deadlines, and lacklustre customer experiences can lead to dissatisfied clients who are unlikely to return or refer others. Without a strong base of repeat clients, law firms find it challenging to achieve long-term growth.
How legal software solves these challenges
Legal software is specifically designed to tackle the hurdles law firms face and equip firms with the tools they need to succeed. By integrating advanced features such as time capture, workflows automation, and client-focused tools into practice and case management platforms, these solutions help firms overcome inefficiencies, recover lost revenue, and strengthen client relationships.
Automated time recording prevents revenue leakage by enabling fee earners to log their work in real time, eliminating the problem of forgotten or delayed entries. This can save firms hundreds of billable hours annually, directly impacting revenue. Seamless integration with billing systems ensures that invoices are transparent, accurate, and easy for clients to understand—reducing disputes, building trust, and increasing the likelihood of collecting the full amount billed.
In addition to addressing revenue challenges, legal software improves profitability by streamlining day-to-day operations. Automated workflows reduce the time and cost associated with repetitive tasks such as document management and case handling. Centralised systems promote team collaboration, increase efficiency, and reduce errors. By minimising time spent on administrative processes, fee earners can devote more attention to client-facing activities, improving service quality.
Most importantly, legal software supports law firms in delivering exceptional client experiences. Clear communication, timely delivery of services, and accurate billing practices inspire confidence and loyalty. These factors not only improve client satisfaction but also encourage repeat business and referrals—key drivers of long-term growth.
Revenue, profitability, and client retention are critical for any law firm's success. By addressing inefficiencies and enhancing client relationships, modern legal software solutions provide firms with the tools to thrive in a competitive landscape. The right software portfolio can unlock untapped potential and set the foundation for sustainable growth.
By adopting the right legal software, law firms can eliminate the barriers to success and build a strong foundation for growth in an increasingly competitive legal landscape. The tools to transform your operations are within reach—unlock your firm’s potential today.