reduce and save administrative time required to record and bill attorney’s time
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assign support staff to doing more critical tasks (Hammond, July 2005)
reduce errors in inputting data to reflect more accurate and reliable information
become more efficient thereby reducing operating costs
address client issues and requirements
Recognizing the need to streamline operations and to be able to cater to various client demands, an increasing number of companies worldwide have engaged in an integrated enterprise system to support the firm’s front and back-end activities. With the mounting user requirements, the number and types of available systems software has increased proportionately as well.
Most of the available solutions are very user-friendly, highly flexible and customizable – designed purposely to be able to cater to any organization’s diverse and changing needs and requirements. Among the more common and more popular time keeping and billing applications suited for service professionals such as attorneys are Amicus Attorney, Abacus, Law, Case Map, Practice Master, PC Law, Timeslips, TABS III, GLS, APS, TAS, Juris, Elite and ProLaw (Knuttgen, 2004).
Another available enterprise-planning tool, which is gaining more share in the market, is the SAP R/3. This system has its Time Sheet component that can be fully integrated to other existing components within the system such as the Time Management and Controlling where other applications may be carried out depending on the required functionalities. (SAP Library). Further enhancements and subsequent integration and interface to other systems may also be used to extend its functions.
It is important to note however, that a careful evaluation of the firm’s systems needs and requirements and a detailed assessment of the available software must be done extensively in order to decide as to which to avail. These applications come not only with a one-time investment costs but include considerable amount for maintenance and upgrading as well, not to mention systems support that will be required from time-to-time.
With the implementation and given the capabilities of the automated system, Grace Ho and Associates will be able to record attorney’s time entries more accurately and compute for billing charges more efficiently. This would address the growing concern of the firm regarding accuracy of their records. An accurate billing system will translate into improved cash flows and aid management in making educated decisions. Below is a sample billing statement of the firm that may be configured and generated from the system.
TOTAL AMOUNT DUE
Attorney’s fees will be computed by multiplying the actual number of hours spent by the attorney’s hourly rate or by the agreed upon rate. Same computation applies for the assistant and support staff’s fees. Rates may vary according to the agreed terms with the clients depending also on the work involved in the case.
Direct expenses refer to expenses incurred by the attorney and/or support staff in direct relation to the settlement of the case. These usually include transportation costs, representation, photocopying charges, etc.
Allocated expenses refer to the particular client’s share in the other operating expenses of the firm that may not be easily identifiable on a per-client basis. This is allocated by the system through a designed allocation cycle based on the percentage of time spent. These charges are generally common expenses that should be shared by all existing clients.
The following flowchart will best illustrate the processes involved in the system.
1. User identification, work description and client details will initially be pre-defined in the system. Each staff will be given his own ID number to be able to log on to the system. Upon log in, users will be prompted to provide specific client and description of work to be done.
2. Bookkeeper will record expenses as incurred. At end of each billing period, total expenses will be allocated to existing clients based on percentage of time spent.
3. System will record and store details accordingly. At any given time, each staff can check how much time he has already put in to a particular case and management can gauge productivity of attorneys.
4. At the end of each billing period, bookkeeper will generate invoice from the system and forward document to outsourced accounting firm. The system may also be integrated and interfaced with the system of the accounting firm.
Below is a use case for the new billing system.
During the development and implementation of the system, it is very important to maintain proper procedural documentation. It may initially seem time-consuming but once a standardized format and routine has been established, the firm will ultimately save time in the process. Not only does proper documentation helps in maintaining an accurate record of the system design and configuration, it will also facilitate in ensuring consistency of the program and provide future employee knowledge in the system as well. Proper documentation will also facilitate easier assessment for future upgrades and integration. Keeping the stability of the system is very important as it will serve as a tool and provide needed information for operational, tactical and strategic reporting.
Reporting is a key aspect of any business organization as this equips management with information needed for effective decision-making and business planning. Reports must therefore be relevant, reliable, accurate and generated on time.
The three basic kinds of reporting vital to any firm are operational, tactical and strategic reporting.
Aimed to enhance operational efficiencies
Intended to monitor and respond quickly to various short-term situations
Designed to improve and sustain business performance and ensure alignment to business objectives
Shows task-oriented transaction-level details on a day-to-day basis
Provides trends and performance of a specific area, function or period
Identifies trends and relationships across multiple areas
Useful for verifying and confirming accuracy of entries made into the system
Structured to group data from operational transactions into the appropriate business context depending on purpose and user needs
Deals with more strategic financial data and analysis
Uses data from more than one operational file and serves as a decision-support tool to better manage a business process
Compares measures over a longer period of time
The succeeding illustrations will show examples of the three reports that may be designed in and generated from the automated system. These show the various configurations showing different information depending on the user requirement and purpose of the analysis.
As mentioned, an operational report shows the day-to-day transactions of a business. For Grace Ho and Associates, one of the most important and key factor in the operations is the attorney’s time dedicated to a case. The amount of billable time spent by attorneys is later translated into revenues of the company.
As illustrated above, report formats can be designed in order to reflect different data and different grouping depending on the need and requirement of the user. For the above operational report, it can be configured to show the time details of a specific attorney or configured to show the comparison among attorneys. Both formats show their productivity at a given day.
The succeeding tactical report shows the comparison of the two specializations of Grace Ho and Associates. This shows which of the two is more profitable and which of the two incurs more costs. Further, per specialization details will show the most expenses incurred. Together with other reports, information shown above will aid management in planning on which specialty to focus more.
Details from a tactical report may be expounded for use as a strategic report. The illustration below compares actual and budgeted costs of one specialization for a specified period. This is a very helpful tool for management planning and control as this shows which area is performing within budget and which is already over the targeted costs. This will in turn, enable management to plan and strategize on which area should be more cost-effective.
Hammond, J. 2005, July. “The Top 6 Reasons Why Firms Replace Time and Billing Systems” http://www.imakenews.com/eletra/gow.cfm?z=technews%2C85731%2C0%2C37384%2Cb11
Knuttgen, B. 2004. “Knowing What You Need Is Half the Battle – A Guide to Understanding Legal Software”. http://www.automatedhorizons.net/
SAP Library. http://help.sap.com/saphelp_470/helpdata/en/e1/8e51341a06084de10000009b38f83b/frameset.htm
Schuelke, C. 2001, March. “Data Warehousing Horizons: Best Practice Approaches to Operational, Tactical and Strategic Reporting”. DM Review.