SEVERAL recent studies have shown that fee earners in small law firms are billing, on average, only about 2.02 hours per day. This is, clearly, a business problem, according to Wise Owl Legal founder, Karen McDonald.

“I have met many lawyers in my time and I know this is not a true reflection of the hard work they put in,” Ms McDonald said. “Because of their amazing dedication, I believe they deserve to be more appropriately rewarded, which means utilising tools to capture the service they deliver to the community.“

For example, a survey of more than 134 small law firms in Australia by legal practice services company Smokeball, showed that 62 percent of respondents identified time management as their biggest challenge, followed by managing costs at 35% and billing and collecting fees at 29%.

The research showed across the country, over 66% of these firms did not believe, or were unsure, if their billing accurately reflected their firm’s completed work, and more than half of the firms surveyed agreed with this. Only one-quarter of respondents knew what percentage of their time-billed work was billed daily and almost half (46%) estimated they were not billing up to a quarter of their work¹.

“I have seen many small firms with a wide range of productivity results, however, maintaining their productivity goals is consistently their single biggest business challenge,” Ms McDonald said. 

Time wasted on non-billable admin

For the law firms who run on billable hours, so much time is wasted on non-billable admin, Ms McDonald said. Some firms are increasing billable targets to from 7.5 to eight hours per day, aqccording to a report in the Australian Financial Review², “which is a high target if you consider the amount of paperwork they also need to get through”.

“So, what’s the solution? Legal practice management software,” she said. “Software that has specifically been designed to reduce the pain of admin, reduce the time spent doing repetitive tasks and recover billable hours.”

Ms McDonald said the company she founded, Wise Owl Legal was “an outlier in this space”. However, she said, “Having worked as an accountant for lawyers for decades, I understand what is required by legal practices in order to reduce the time they spend on admin and accounting, and I developed a solution that is cost effective (when compared with other software in this space).”

Ms McDonald offered the five key reasons legal practice managers should implement automation software in their law firms and the clear benefits it offers.

Streamlined document management – “From contracts and pleadings to evidence and client records, managing paperwork can be a daunting task. Automation software can simplify this process by organising, indexing, and storing documents electronically. This means you’ll spend less time sifting through piles of paper and more time focusing on the legal aspects of your cases,” she said.

Enhanced efficiency and productivity – “Having the ability to automate routine administrative tasks like scheduling appointments, sending reminders, or generating invoices frees up your time to do billable work. By automating these time-consuming chores, your law firm can operate more efficiently, allowing your staff to dedicate their time to more valuable and strategic legal work. This not only boosts productivity but also frees up resources for tackling complex legal challenges.”

Improved accuracy and compliance – “Legal documents require precision and attention to detail. Any errors or omissions can have serious consequences for your clients and your firm’s reputation. Automation software can significantly reduce the risk of human error. It can ensure that documents are consistently formatted, deadlines are met, and compliance with legal regulations is maintained. This level of accuracy can be a game-changer in the legal profession.”

Enhanced client experience – “With automation software, you can provide a better experience for your clients by offering online client portals for easy document sharing, electronic signatures for speedy approvals, and automated case updates. This not only saves your clients’ time but also leaves a positive impression of your firm, leading to increased client satisfaction and loyalty.

Cost savings and scalability – “Implementing automation software may require an initial investment, but the long-term benefits are substantial. As your firm grows, automation allows you to scale your operations without a linear increase in staffing costs. This scalability is particularly valuable in a competitive legal market. Moreover, the time saved on administrative tasks can be redirected toward business development and client acquisition, ultimately increasing your firm’s profitability.

Ms McDonald said automation software was not just a luxury for modern law firms, “it’s a necessity”.

“The legal profession is evolving, and those who embrace technology and automation are better positioned for success,” Ms McDonald said. “By streamlining document management, increasing efficiency, ensuring accuracy, enhancing the client experience, and saving costs, automation software can revolutionise the way your law firm operates."

She said legal firms that had not looked carefully into automation software “to propel your practice into the future” would be increasingly at a business disadvantage.

www.wiseowllegal.com.au

References and further reading

1.

https://www.infotrack.com.au/news-and-insights/small-law-firms-bill-2-02-hours-per-day-are-you-missing-out-on-revenue/

2.

https://www.afr.com/companies/professional-services/big-pay-increases-are-over-for-lawyers-20230726-p5drg2#:~:text=%E2%80%9CSome%20 firms%20are%20 increasing%20 billable,to%20achieve%20more%20with%20less.%E2%80%9D

3.

https://www.smokeball.com.au/blog/2021-state-of-small-law-study

4.

https://wiseowllegal.com.au/blog

ends

THE Commissioner of Taxation, Chris Jordan, has lodged an application in the Federal Court seeking orders for the imposition of a civil penalty under the Promoter Penalty Legislation.

The Commissioner will allege a former Ernst & Young (EY) tax partner promoted a tax exploitation scheme. 

A report from the ATO said, “As the matter is before the courts and no findings have been made, the ATO is limited in making any further comments.”

The ATO acknowledged it “has been working closely with the Tax Practitioners Board (TPB) on this matter”.

The ATO has provided this background to the allegation:

“Promoter Penalty Laws are in place to deter and disrupt the promotion and implementation of aggressive tax avoidance and evasion schemes.

“The promotion of tax exploitation schemes undermines the integrity of the tax and super system and challenges community trust and confidence. These schemes create an uneven playing field for everyone, including businesses and advisers.

“The ATO uses Promoter Penalty Laws to take action against alleged promoters of tax exploitation schemes, regardless of the firm size, occupation, position in their organisation or standing in the tax community.

“If you are offered a tax avoidance or tax evasion scheme, you should reject it and report it to the ATO confidentially by: completing the tip-off form on the ATO website or in the ATO app ‘contact us’ section; phoning the tip-off hotline on 1800 060 062

“If you suspect that you have inadvertently become involved in a tax avoidance or tax evasion scheme you should also contact the ATO immediately. If you approach the ATO, you may be eligible for a reduction in any penalties imposed.

“The ATO expects the utmost integrity of those providing advice in the tax system and will continue to take serious action against anyone who attempts to exploit or undermine the integrity of the tax system.”

www.ato.gov.au

ends

“THE PUBLIC rightly expects any personal information collected and stored by business – whether they are large or small – will be protected,” Australian Small Business and Family Enterprise Ombudsman, Bruce Billson has said in support of a Federal Government decision to remove a privacy exemption for the sector.

Mr Billson said he supported the decision by Attorney-General Mark Dreyfus to remove the privacy exemption for small business and is working with the Australian Government to ensure new regulations are “right-sized and appropriate” for small business, easy to implement, with clear advice and timelines “and will give confidence to customers”. 

“It is not credible for small business to have a blanket exemption from providing necessary and appropriate protection of the personal information they have about their customers, staff and other businesses they are dealing with,” Mr Billson said.  

“To make this change work and to provide confidence to the community, we need to have right-sized and appropriate requirements that are readily implementable by a small business.  

“While the exemption is no longer tenable, nor is it practical to apply to full suite of privacy principles to a small business – principles that big business and government agencies need to decipher, interpret and apply to their circumstances which a small or family business can never hope to have the resources or staff to navigate and implement.” 

Mr Billson said he welcomed the Attorney-General's acknowledgement of the special circumstances and limited time and resources of small business and that the exemption would only be removed following an impact analysis once what replaces it has been determined through consultation with the small business community, consideration of a support package and a transition period giving small businesses time to prepare. 

“We have been engaging constructively with the Attorney-General and his department and look forward to continuing to do so to establish a right-sized, actionable, fit-for-purpose and efficient approach to privacy protections and personal information management with appropriate support and guidance,” Mr Billson said. 

“Small businesses will need clear guidance on the active steps they can take to protect the information of their customers, their staff and themselves and to fulfil their responsibilities. This may include procedural templates, information guides and checklists explaining the clear steps required to meet their privacy obligations. 

“And it would be sensible to join this up with other important reforms around cyber risk management, Digital ID, payment times, deepening the digital engagement of small business and the responsible use of artificial intelligence (AI). 

“Small businesses themselves know they can lose business if customers lose confidence in their ability to protect personal information and will benefit from increased certainty around the way information is being managed and protected. 

“A cyber hack or malicious information release is harmful at many levels, including for the targeted small business as it can irreparably damage the businesses’ ability to operate and it may never recover or re-earn the confidence of its employees, customers, suppliers and partners.”

MASTER BUILDERS Australia has acknowledged that the Federal Government’s announcement of changes to the Building Code result from it taking its policy to abolish the Australian Building and Construction Commission (ABCC) to the electorate at the recent Federal Election.

Master Builders Australia CEO Denita Wawn said she was also cognizant that the Federal Government has not yet released the detail of the regulatory framework that it plans to put in place for the industry going forward.

“However, we continue to call on the government not to depart from decades of bipartisan recognition that the building and construction industry requires industry specific regulation and oversight,” Ms Wawn said. 

“This is particularly important at this precarious time for our economy and people’s standard of living when all Federal Government action should be about fighting inflation, protecting growth, and boosting productivity.  Leaving the construction sector without a specialist regulator will fail this test.

“Abolishing the ABCC cannot be separated from the economy and economic management. Making changes to the industrial relations system is one of the strongest economic levers that any government has at its disposal and abolishing the construction industry watchdog will have substantial negative flow on effects,” Ms Wawn said.

“Economic modelling by EY has found that scrapping a specialist construction regulator will drive up inflation just when the Reserve Bank is increasing interest rates to tackle inflation and will result in a reduction in economic activity by $47.5 billion by 2030.

“It also found that it will drive up the cost of constructing the substantial pipeline of infrastructure including health, defence, aged care, and transport projects costing taxpayers in the order of $9.5 billion by 2029 and result in an estimated reduction in investment in infrastructure of $45.6 billion by 2030,” Ms Wawn said.

“When the Rudd Government commissioned the late Murray Willcox AO QC to inquire into the creation of specialist regulatory division for building and construction work the Willcox Report found that “the ABCC’s work is not yet done” and recommended a specialist construction regulatory agency which retained many of the powers of the ABCC.

“We understand this action by the Rudd Government caused intense resentment in the union movement, but the retention of a specialist construction industry regulator was the right public policy response then and remains so now,” Ms Wawn said.

“Going back decades Labor and Coalition governments at a state and federal level have implemented industry specific measures aimed at improving the performance of the construction industry.

“Tackling the extreme militancy found only in construction unions has also received long standing bipartisan support. It was Labor Governments at the federal and state level which abolished the notorious Builders Labourers Federation,” Ms Wawn said.

“These measures were not focussed on discouraging the flying of construction union flags on construction sites but responded to the overwhelming evidence that construction unions use unlawful industrial tactics to bully, intimidate and coerce people working in the construction industry to sign up to union deals,” she said.

“The critics of the ABCC cannot simply ignore the continuous succession of Federal Court judgements documenting this reality.

“Master Builders welcomes the government’s announcement that litigation commenced by the ABCC will be managed by the Fair Work Ombudsman,” she said.

“Importantly, the government deserves commendation for its recognition of the vital role that the Office of the Federal Safety Commissioner plays in improving safety culture and outcomes in the construction industry,” Ms Wawn said.