How much time and money are you losing by doing repetitive tasks yourself instead of automating them?
Even if you see yourself as a productivity champion, chances are your team is spending at least some amount of time manually performing tasks that a computer could handle. And by doing this work manually, you’re cutting into your firm’s revenue opportunity and quite possibly burning yourself out. Plus, performing these recurring tasks manually opens the door to human error, which means costly delays.
While it’s tempting to say that “if you want something done right, you have to do it yourself”, the truth of the matter is that each of us only has so many hours in the day and only so much stamina. And that means finding ways to outsource, eliminate, or automate the tasks that drain you the most are essential to building a thriving practice.
Enter: Automation software.
Rather than devote precious resources to menial tasks, today’s smart and ambitious lawyers are quickly discovering the value of automation. In 2020, for instance, the American Bar Association’s Law Practice Magazine interviewed four lawyers regarding the how and why of automating a law firm.
One of the key benefits they reported? A better client experience. One lawyer also cited their newfound freedom to devote time to revenue-producing activities (instead of busywork) as perhaps the best outcome of automation.
Legal industry automation software has come a long way in a few short years, and today’s tech-savvy law firms are using artificial intelligence for everything from client onboarding to payment processing to records management and document automation.
But if you’re not particularly tech-savvy, the idea of having a computer do your work for you can be intimidating. How can you trust that the AI will get the details right? And are you really saving time if you need to learn and oversee this new software? Here’s what you need to know about how these automation tools work – explained in a clear and concise way that all legal professionals can understand, no programming background required.
Legal industry automation software is predicated on something called conditional logic. Quite simply, conditional logic involves a step or series of steps that a piece of software is programmed to automatically take when certain conditions are met. Essentially, automation software works by detecting certain trigger events and then executing an action in response.
For example, when you prepare a document for signature in Appara, our software uses conditional logic to automatically generate signature blocks where the client needs to sign. How does the automation software know to do this? Because of a little piece of code that says, “If the document has the word ‘Signature’ in it followed by a blank space, then create a signature block.”
That’s going to depend on the tasks being automated. With accounts receivable, for instance, industry benchmark research has found that automating your receivables can reduce human error by 97% (according to Klippa), which results in a 70% cost saving in invoice processing.
Whatever the task involved, there’s a set of calculations you can do to actually measure the ROI of automating various processes in your law firm.
First, we need to determine the cost of manually executing the task in question. For that, you can use this formula:
Manual cost = [(# of tasks x time per task) + time spent correcting errors] x hourly wage
Next, we plug in the variables. If we assume that your accounts receivable department takes 15 minutes to manually process an invoice, plus another 5 minutes to correct errors, and that you’re paying your AR staff $25 per hour, then having your staff manually process invoices costs you about $8.33 per invoice.
If your law firm sends 30 invoices per month, that’s about $250 in wage expenses and 10 hours of time per month.
Or, presented in the form of the equation above:
Manual cost = [(30 x 0.25) + (30 x 0.083)] x 25
Now we calculate the time and money involved in automated invoice processing.
If your automated invoice software reduces errors by 97% and manual processing time by 70%, then that would mean that with automation software, you can process an invoice and have your staff correct errors in under 5 minutes. It also means your manual processing cost falls to just $1.94 per invoice, for cost savings of 77%.
Assuming you pay $50 per month for a software subscription and send 30 invoices per month, that’s a total monthly cost of $108.20 – in other words, automating your accounts receivable has cut your processing costs by 57%, even after accounting for the price of the software.
Artificial intelligence and automation software are always improving – and one of the benefits of AI-based apps is that the app learns your processes and preferences over time. Essentially, you can train an AI to perform tasks the way you want them performed.
Not all AIs are as advanced as science fiction would have us believe, but AI technology is improving at a rapid pace. That means there are solutions on the market today that can do some surprisingly complex things – things that weren’t possible with AI just a few short years ago.
Basic automation software excels at tasks that are simple and repetitive – the kinds of tasks that you probably dread; the tasks that produce little ROI but consume a significant amount of time and attention. Anything involving a well-defined set of steps that never changes is a great task to automate. This could include things like sending invoices to your clients, or filling out an incorporation agreement, or managing a workflow.
More advanced and modern AI-enabled software, though, can automate much more than just straightforward tasks. AI technology is now making it possible for software suites like Appara to handle complex transactions involving multiple steps and multiple entities. That’s why AI-enabled solutions like Appara can automate document creation to a degree that other suites can’t. Modern document automation tools have evolved to the point where they can now auto-draft wills and trusts, for instance – and the future of automation will only involve even more advanced AIs.
Automation software can cut costs by 50% or more while freeing up time for your admin staff to handle other tasks. With automation, your law firm can offer clients better service, bill more hours, and create more space in your budget for growth-oriented activities. It’s also a better use of your human capital – by giving your most mundane tasks to a computer, your team can focus their energy on creating a fantastic client experience.
Are you ready to discover how automating your records management can free up more time for billable work?
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