TRP 293: [Legal] Case Management: Opening Your Matter and Taking it through to Conclusion with Jay McAllister

[00:00:10] You're listening to The Rainmaking Podcast, hosted by high-stakes headhunter, author, and professional speaker, Scott Love. You're listening to The Rainmaking Podcast, and my name is Scott Love. Thank you for joining me on the show. Our topic title today is Case Management, Opening Your Matter and Taking it Through to Conclusion. Now, this is in our Legal Only series that only is for those within the legal industry.

[00:00:38] Our guest today is Jay McAllister. Jay is the founder of Paragon Tech IT. He continuously explores new ways law firms can leverage technology and AI, sharing his learnings in real time at legal tech conferences across the U.S., including ClioCon and through a growing content library of over 1,000 videos on LinkedIn and YouTube.

[00:01:01] As founder of Paragon Tech, Jay empowers law firm owners to harness technology that delivers greater value to their clients with less effort. As always, this podcast is sponsored by SurePoint Legal Insights, formerly known as Leopard Solutions, turning legal intelligence into opportunity, and also by The Rainmaking Magazine. Don't lose business to the competition. Read this publication and keep business development top of mind.

[00:01:27] Visit therainmakingmagazine.com today to chart your course to greater rainmaking success. Thanks for listening, and I hope you get some great ideas from my conversation with Jay McAllister today. Hey, this is Scott Love with The Rainmaking Podcast. Our special guest today in our legal-only episode is Jay McAllister. Jay, thanks for joining me on the show today. Hey, hey, Scott. Thanks for inviting me. We should have a lot of fun today. I'm all ready. Absolutely right.

[00:01:56] I'm poised to, based on the description and the intro that you've given, I'm ready to go. Thank you. And it was really good to get connected with you from people in the legal industry. You've got a very good reputation, and you do things that I just don't even know about in terms of case management. So let's kind of start with this as an area that could be an opportunity of improvement for law firm partners in their firms. And let me kind of throw this open-ended question to you.

[00:02:22] Where do you think those opportunities are that partners can make improvements in case management, Jay? Sure. So you use the word could be a source of opportunity for a firm, and I think that's great. That is spot-on wording because there is multiple case management vendors, Clio, Smokeball, Centerbase. I've seen reports from them. They all have very similar metrics around level of adoption of the features within their case management system.

[00:02:49] And most would tell you, when you look at the reports, that law firms on average use less than 10% to 20% of their case management system's functionality. So right there, there is a lot of additional opportunity left on the table. You're paying for the full functionality of your case management system.

[00:03:07] But if you're only using a small subset of the features, then your firm is ultimately—now, I'm not making the argument that you need all of them, but your firm is ultimately leaving a lot to be a lot of efficiency on the table. Right. So what's the reason why this is significant, Jay? What could they be doing that they're not doing today in terms of outcomes and results? And then we'll kind of dig into other recommendations that you have. Okay. So I want you to think about it this way.

[00:03:34] Many firms, when they adopt a new case management system, it's typically from one or two catalyst reasons. Number one, the firm's existing case management platform is being sunset. So, for example, back in 2024, Firm Central, which is Thomson Reuters platform, they decided that they were going to exit the arena of case management systems. They were going to focus primarily on legal research, where they've positioned most of their value proposition.

[00:04:03] So they had a platform called Firm Central. And by default, they had made some recommendations as to other systems firms could use. But ultimately, now these firms are in a position where they needed to adopt new technology to capture any of their potential new client details, their case notes, matter, documents, things of that nature. So that's reason number one.

[00:04:26] Reason number two is that a firm becomes aware of a specific feature set that is attractive to them. So, for example, in a personal injury context, a firm may find that, oh, wait a second, if I adopt a platform like FileVine, I can track my settlements directly through the platform. So they make the switch or they at least begin the process of onboarding into a new platform.

[00:04:48] Problem is, in both of these scenarios, the firm did not first start from the perspective of identifying what the largest constraints are within their model. And I talk about this often, not only in the case management system context, but also in the context of selecting an AI platform for your firm. Very similar methodology where you must identify the limiting constraint. In other words, where is the largest source of dysfunction in your firm?

[00:05:13] Because my thesis is that, and this has been tested across multiple, we've done about 120 case management system implementations for law firms to date. So my thesis is that there are many sources of potential improvement that a firm could undertake. But there is typically one or two, sometimes three, large glaring areas where the leverage or the level of energy expenditure required is low in relation to the return on investment.

[00:05:42] Not even necessarily from just a monetary standpoint, but also from a time and efficiency, a staff satisfaction, client satisfaction standpoint. So I urge firms to first start with, assemble a joint steering committee. These are the individuals who ultimately understand the firm's operating systems, you know, the processes that move your matters forward, the current technology in place, the firm's current finances. So assemble that team and then ask the hard questions, which are what are our largest constraints?

[00:06:11] If I typically start from that end of the spectrum and then you start identifying software tools, the process becomes a lot easier versus finding the software tool first and then trying to fit a square peg into a round hole and find areas to use the software to enhance your firm's operations. That makes sense. So it sounds like firms just because of the way they operate, they're busy serving clients.

[00:06:34] They might not be thinking strategically or maybe there's nobody in a position of leadership that can really take that on that has the experience to really have the vision of what could happen if they've got a good case management system. So let's look at the ideal situation. Let's say there's a firm out there that you may have worked with and they've done everything right. Right. They've been able to make good, effective decisions in terms of improvements, their case management systems. What is the upside to people doing this? How has it benefited that firm and why?

[00:07:05] What do you think lessons are that we can learn from those from those law firms that have done this effectively? Great question. So first of all, I just want to clarify as well, when we're talking about case management systems, I know that it's very easy to look at that as just the platform and the software. But this is also the mindset and the processes that ultimately move your matters forward. That is all what I consider case management or your case handling system.

[00:07:29] Right. So everything from initial intake, collecting the client details, opening up a matter, billing against that matter, getting paid on that, closing the invoice. That's all part of your case management methodology and systems. So you need to have a system. You need to have an actual software platform that supports those functions. So what is the main upside to having a system that's well thought out, refined and serves the firm?

[00:07:55] Number one, if you look at someone like Jack Weinberger, he's the co-founder of Ajax, which is an automated time capture platform for law firms. They update their report every year and they typically find that on average, lawyers who are not billing contemporaneously typically lose about one hour per week of billable time. Now, when you look at an hourly firm, that becomes easy to understand. And that's a 30 percent increase in billables right off the bat just from capturing time in a more systematic way.

[00:08:25] And the only way you can do that is by having a system in place that supports tracking that time in a granular fashion. So number two is that for a firm who might bill outside of an hourly model, like a flat fee contingency or even a subscription-based model, there is efficiency loss happening. Because those timekeepers within the firm or those billable members within the firm, they have a cost to the firm, their salary.

[00:08:51] And if they're spending their time on matters in a way that's not efficient, there's an obvious productivity loss there. So they're not able to handle other matters for the firm that have a higher value and would move the needle in terms of client experience or just from a productivity standpoint. So those are the big drivers right there. Just having a system that allows you to have a matter-centric way of operating. Everything is attached to the matter, whether that be documents or correspondence between a client or opposing counsel.

[00:09:19] If you can organize it and create one source of truth, it drastically decreases the friction involved in ultimately handling your matters. You have clients who are more satisfied because you've created a choreographed experience. Again, we're not guessing on how to create that best client engagement that we had two or three years ago. You're not guessing on how to recreate that. You have a system in place that delivers that result a majority of the time.

[00:09:42] And then your staff are more satisfied as well because the less friction that they have to endure in order to move your matters forward for the firm, they get to benefit from those efficiency increases as well. So let me ask you, can we use this for business development purposes? Is there information that comes from this where we can look at that and see opportunities to harvest more work from certain clients? Is that something that you've looked at from your perspective as a tech expert on this with law firms?

[00:10:09] Well, to be honest with you, I think there's a huge advantage for firms to be able to herald the way that they operate in such a client-centric method. So, for example, if a firm knows that their average response time is one hour because they have the systems and the processes set up, that becomes part of the way that you deliver your services. That becomes part of the pitch in your consultation. That becomes sort of the ethos of how your firm operates. And it's perceptible. And you're backing that by real numbers and metrics.

[00:10:38] So it's believable from the client perspective. At the end of the day, I'm a big believer of... So Alex Ramosey built this equation he calls the value equation. And essentially, it's all about aligning the client's goals with things that they find beneficial to them, which is reduce time or effort or sacrifice. So if you can reduce the perception of those things by creating constant reminders throughout your engagement, you ultimately create more value for your client.

[00:11:06] And then at the end of the day, that means you get to charge more for your services because you're inherently more valuable. It's just a basic economic principle. Why do you think most law firms aren't really thinking this way about case management? So there's the old adage that I'm sure we've all heard, which is that law school doesn't prepare attorneys properly to run a business. It prepares them to be able to issue spot and to learn legal theory, but not necessarily to learn the core principles that are responsible for running a productive and thriving organization.

[00:11:36] I think that's where it comes down to, you know, by understanding the makeup and the components that ultimately create that perceptible value from your client's perspective, looking at your matters from a client perspective first and not what are the services that we can offer, but what are the outcomes that our clients are looking to achieve?

[00:11:55] And then creating all of the systems to serve that goal, that being your North Star, that tends to be a really productive and efficient way to create as much perceptible value as possible. It sort of demystifies this whole concept of value. I mean, when we think about the word value, it's so overused. And do any of us really know what it means? It's me operating in that way of just looking at it from the client's perspective first, understanding what your clients ultimately want out of hiring you.

[00:12:24] Yeah, because it's not your legal services. Clients don't care about legal services. They care about outcomes. So begin to align with those outcomes are. And sometimes you have to just simply ask your clients, you know, what are you looking? What's your ideal scenario? You know, in a criminal law context, it might be, you know, the person's looking to have all charges dropped and they're looking to avoid jail time. Right. But there may be other elements that you're not thinking of.

[00:12:47] Like, for example, they want to, they may, in that same context, they may want to ensure that their client, that their family doesn't have the stress of, you know, dealing with the situation where maybe they do get some prison time. Right. And how do they make sure they can take care of their family? These are all components that you can add to your legal services to create more value. I know in the family law context, oftentimes clients, they rely on their attorney as their therapist almost. They're sort of unloading all this baggage and the attorney doesn't want it.

[00:13:15] Like, they hate it because they're constantly dealing with issues outside of legal representation. But they do it out of matter of necessity. So if you can add individuals like divorce coaches to your practice that are at the ready, you've created another component of perceptible value. So you can't achieve it unless you start to think about your, the way you handle your matters and your cases from a client-centric standpoint and work your way backwards. Those are great concepts. Those are really fantastic, actually, Jay.

[00:13:42] So let me ask you this about adopting a new system and the concept of change management within a law firm. So most law firms, they might think that their biggest hurdle isn't choosing one. It's actually getting partners and staff to actually use it. What strategies have you seen that work best for driving the adoption and minimizing internal resistance during a new case management rollout?

[00:14:05] Great question. I am 1000% sure that you have absolutely encountered cases of individuals who may not have necessarily wanted the changes that the firm was proposing and you've had to deal with those. Because it's a common, it's a common scenario for us legal facing professionals. And I'll tell you that one of the biggest things you can do to curtail that, or at least to minimize it, is to set up that joint steering committee.

[00:14:30] So you have those individuals who are ultimately committing to whatever the goal is, whatever the project is. It doesn't have to be just technology initiatives. It can be anything within your firm, but anytime there's a major change that's being contemplated, it is almost a non-negotiable to make sure that you get the individuals involved, create some internal stakeholders who are going to ultimately see that project through to completion.

[00:14:53] And then have those individuals bring in selectively other individuals within the firm that they can ask for their opinion on how they think the best outcome should be achieved. And by getting as many voices involved as possible, it doesn't mean you have to necessarily take all of that feedback and act on it. But having that information available, it makes individuals feel that they have a voice in the firm and they control the direction or the trajectory that the firm is moving in.

[00:15:20] And ultimately, we reduce a lot of the friction that you would think would be present in those scenarios. For example, if a firm is implementing an entirely new case management system, law firms tend to operate in siloed functions. Especially if you have a firm that's comprised of attorneys from various other firms that have sort of been added on over time.

[00:15:41] They all have their own methodologies for how they draft a brief or for how they follow up with clients or for how they summarize emails. Everyone has their own format. So when you're suggesting a new change that's going to unify the way that the firm operates, oftentimes that does create some significant sources of friction.

[00:16:03] But what I found specifically from practical application is that when we bring those folks in early on and ask why people do things a certain way and then create sort of a unified consensus that the firm can agree to, you wind up having much fewer of those detractors. And then the initiative can ultimately is successful in a much higher percentage of those cases. So let's say they make this change. They decide to make an improvement.

[00:16:30] If they really want to improve their profitability, their client experience, what are some key metrics you think a good case management system should surface automatically? What are partners, what should they be looking at weekly or monthly in terms of key performance indicators or other metrics, things like that? So you want to ensure first that whatever metrics you're going to be tracking, these metrics have to be able to be created and surfaced automatically.

[00:16:55] If there's a great deal of sort of backend configuration and pulling numbers from one system and doing manual calculations, you won't be able to do it consistently over time. So that's the first thing. Figure out what those metrics are. Now we have a series of about, I think there's eight of them that we believe every firm should have as a bare minimum. So one is for your consultations. We should be looking at the percentage of individuals that show up at their consultation sort of as a base.

[00:17:24] And you'll see these tend to be leading indicators that ultimately all ladder up to revenue, bottom line revenue. The next would be the percentage of individuals that retain your firm after the consultation. So that's sort of the next step down, right? The next would be your utilization rate, which is defined as the percentage of time that your billable members of their firm are working on billable matters versus non-billable. So you should know that. And many platforms have the ability to pull that information automatically.

[00:17:54] Next step up from that would be your realization rate. Now, realization rate is defined as out of all the bills that you send to your clients, what percentage of them are you writing down or discounting? And this is important because at the end of the day, you may see billable revenue on the books. But when you look at the realization, if you've written down invoices or given discounts based on particular client engagements or things that you thought should not have taken that long, this all adds up.

[00:18:21] And ultimately, you want to see what the discrepancy is between actual utilized time and realized. And then lastly, you want collection rate. So collection rate is just defined as in a period of time. And you can set that cadence, whatever it might be. If you do weekly billing, biweekly, monthly, depends on your firm. Typically, many firms, they'll track collection on a monthly basis. But how many of the bills that you've sent out have actually been paid within that 30-day period? Right? So there's sort of those core financial metrics.

[00:18:51] And typically, the way that you'll want to look at it from a case management perspective is, again, you identify the limiting constraint. Because it's much easier to improve a metric that is lower than one that is higher. So if you've got 99% collection rate, like you have really no outstanding receivables, it's going to take a lot more effort and energy to make that 99 a 100. And the return is not going to be as great as if you pick something like, what if our show rate for consultations is only 25%?

[00:19:21] There's a lot left on the table there. So, and again, it all passes through to each level. So let's say if we have 25% show rate, let's say our average matter is $10,000, right? So if we can get that 25% show rate up to 50%, which is a 25% increase. But again, it's much easier to do that 25% increase than a 1% increase on something that's already almost capped out.

[00:19:47] Now we're passing on, let's say, you know, your average, let's say you have 10 leads per month, right? So now out of those 10, we were only getting 2.5 that showed up to our meetings. And now we're getting 5 to show up, right? So out of those 5, then you look at what your close rate is. Again, that next metric. So if your previous close ratio was 60% and we use that same 60% metric, now out of those 5, we are signing, what, 3?

[00:20:15] Instead of the 2 that we were getting in that first scenario, we were only signing, that's less than 1, right? So you can see now if we have $10,000 engagements, we're making $10,000 in that first scenario. We're making $30,000 in that second scenario. And all we've done is change one metric, which is our show rate. So again, that's why it's so important to understand what KPIs are important to your firm. And then by extension, solving the one that is your limiting constraint. Don't go after the low-hanging fruit.

[00:20:42] Don't go after the one that's going to represent a tremendous amount of friction for a small relative return. We want the outsized return. And the way you accomplish that is by going after that limiting constraint. That's smart. That's a really smart way to do that. And I think by giving law firm leaders a tool, they can tell them what decisions you make strategically, looking at what are those metrics that lead up to the results we want. Then you can find out where the problems internally you need to make changes with or make adjustments.

[00:21:09] So I think with these concepts that you're sharing with us, this is information that law firms can use to make better decisions strategically. And this is interesting, Jane. We're running out of time here. So I wanted to ask you this, if you could kind of summarize three action steps a law firm leader can take to really implement some of these ideas. What would those three action steps be, Jay? First of all, you're going to want to define whatever your limiting constraint is as a firm.

[00:21:37] I believe in every scenario, any change management initiative, and I'm not talking just technology. I'm talking about staffing changes. I'm talking about compensation structure changes. Any major change you're making to your firm, it always identifies the limiting constraint first before you begin. Right? I mean, when you look at things like AI adoption, a lot of those adoptions have failed.

[00:21:58] MIT did a report and 95% of AI implementations have been stuck in the pilot phase, meaning they haven't rolled it across the firm at a global level. It's just been one practice group. Why is that? A lot of that is because the limiting constraint was not identified from the beginning. The firm got enamored because they went to a trade show and, you know, a vendor sold them on the fact that your firm is going to be revolutionized by this new thing. And they signed up. Right?

[00:22:23] And then they found that since there was no initial constraint that they were solving for, you can't possibly have success if there's no success criteria defined. Right? So that's one. Identify what the limiting constraint is. We have a framework called leverage AI that helps firms actually, and specifically in the context of AI implementations, helps you think through the activities. That would likely be a good fit to outsource to AI. Right? And then there's some other tools and frameworks that you can use across, you know, staffing changes and other areas.

[00:22:52] But essentially, the main thing is understand what those constraints are. Second, now, if you have a suspicion that your case management system is not sufficient for your firm's current operating model, the first thing you should do rather than start interviewing case management system companies. Last time I checked, there's about 160 different case management platforms out there. So that would be a fruitless search to just pick one by default. Just because your colleague's firm uses Clio or the other or your buddy from law school, he uses my case.

[00:23:20] The better way to approach this is first understanding what are the core functionality requirements of your firm. We actually created a case management system selection guidebook, which lists the 53 criteria responsible for ultimately helping you to determine which case management system is most appropriate for your firm. So firms who are looking to make a change can use this and also firms who are looking to validate whether the case management system that they're currently on is sufficient, can use this platform. And we'll list that in the show notes, I believe.

[00:23:51] Right, Scott? That's absolutely right. We'll put that in the show notes. So everybody listening to this, if you want to get access to that and also connect with Jay directly, just go to the show notes. You'll be able to access that. Yeah. And then last up, I would say for firms who are technology forward, but they're unsure of what steps might be most appropriate for them next, I would say just to get educated, get involved in the conversation. There are so many threads on Reddit.

[00:24:16] It's been a growing area that I've seen firms sort of commiserate with each other on wins, but also talk strategy and legal operations. So you can check that out there. That's interesting. There's some great resources. There's leverage the hive mind in order to solve problems. There's rather than reinventing the wheel each time, there's probably somebody smart who solved a problem that you faced. And the only way you find that out is by asking. Absolutely right. Well, this is great, Jay.

[00:24:44] You've given us some really good, useful ideas here today. Tell us about your offerings. What do you do? What do you have that you'd like our listeners to know about? And like I mentioned before, we're going to put all of your contact info on the show notes. Ah, okay. Perfect. So the shameless plug. Appreciate it. No shame. No shame when you've given good value. Thank you. I appreciate it. So I've been recently made aware by Delisi Friday that, and she's a sort of legal business development coach. I've been made aware of this term called LinkedIn lurkers.

[00:25:13] So essentially, it's individuals who are out there who consume your content silently. They don't contribute to the conversation, but they still get value out of it. So I found recently that I have quite a few of those. So I welcome those folks. If you're someone who isn't quite ready to take the plunge, you're not ready for a conversation, I'll tell you that I have a pretty large presence on LinkedIn. That's where I'm most active. I post daily, multiple times a day, actually. Sorry, but not sorry. So check out Jay McAllister on LinkedIn.

[00:25:44] Everything I post is all about legal operations, running a better law practice using technology. And we also have a growing channel, which is our YouTube page that allows us to post longer form content. So we have software explainers, tutorials, you know, how to, you know, create naming, matter naming conventions in your firm. Very in-depth topics. So, and all that's free. All that's just value that we're trying to create. So firms who are not ready to take the plunge or maybe, you know, are a little bit more price sensitive, you have that information there.

[00:26:13] It's all the stuff we do in our paid engagement. So it's just, you know, we give you the tools and you can do it on your own. That's great, Jay. And then so next up for firms who are looking to have a little bit more hands-on approach and they'd like a little bit more guidance, we do offer case management system selection services. Again, going through our methodology, choosing the right case management system for your firm.

[00:26:36] But then not only that, we implement it, we integrate it with other tools that you might need, like law pay or, you know, legal deadline calendaring software or e-signature software. We sort of create an ecosystem with all of your tools and keep you up to date on what latest functionality and feature releases happen within your system of choice. So we provide ongoing training and support. So that's really our main offering.

[00:27:00] We're very focused narrowly on what we do and we bring professionals in to handle the other items that we don't do. Well, this is terrific, Jay. I'm sure your clients really love having you on their team, supporting them. And I'm glad I've got you on my show as a guest. I'd love to have you back on in the future. As technology changes, we can have you back on, talk about other trends, things like that. Thanks for being here today and for sharing all of your wisdom with us. And to everybody listening, like I mentioned, check out the show notes for the information that Jay mentioned and also to connect with him directly.

[00:27:30] Thanks for being here, Jay. Great job today. Thanks for having me, Scott. We'll see you in the next one. Thank you for listening to The Rainmaking Podcast. For more information about our recruiting services for international law firms, visit our website at attorneysearchgroup.com. To inquire about having Scott speak at your next convention, conference, sales meeting or executive retreat, visit therainmakingpodcast.com.