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Jul 29, 2026

Law Firm Operations Management Exception Report

Question:

I am the owner of a five-lawyer estate planning/administration firm in Fresno, California. The other four lawyers are associates in the firm with estate planning and administration experience ranging from one year to ten years. We have three paralegals, a office manager/bookkeeper, and a receptionist. We are using state of the art cloud-based practice management software for billing, accounting, calendaring, document storage and management, and lead tracking. We use MS 365 products for e-mail and word processing. We use specialized cloud-based software for estate planning document drafting and preparation. While most of our estate planning work is billed on a flat fee basis we keep timesheets on all matters – flat fee and time bill matters.

As the firm owner and manager, I am finding it difficult to manage the store. Getting the attorneys to stay focused and attain their billing/collection targets is a major challenge. Recently we have had situations such as the following:

  1. Estate administration matters that have not been worked on for months resulting in client complaints and retainers tied up in the IOLTA account where work has not been done and can’t be billed.
  2. Estate planning matters where clients got tired of waiting three months for their estate plans and fired the firm, requested refunds, and took their work to competing law firms.
  3. Lawyers that are way short of their production targets. Some are not even billing/collecting $300,000 a year and are being paid salaries of $150,000 plus a year.

I receive more reports from our bookkeeper than I even have time to read – alone understand what they mean. I need better tools to stay on top of things. Any ideas that you may have would be appreciated.

Response: 

I understand your frustration. Years ago, when computer software was first being implemented in law firms a managing partner told me – “I am tired of receiving reams of paper every time I want to know the status of something. I want to be able to push one button on the computer, have the information that I need in one minute, and printed on one piece of paper.”

Since those days there has been improvement but getting the information you need and when you need it can still be frustrating.

Many of the leading law firm software developers are beginning to incorporate dashboards into their software and this is providing some assistance. However, these dashboards often do not provide the precise information or reporting flexibility that is needed.

What is drastically needed is a law firm operations management exception report that presents you with red flags and identifies areas in the firm that require leadership attention. Rather than reviewing pages and pages of detailed reports and every operational metric, an exception report focuses on exceptions—areas where performance is significantly above or below target, deadlines have been missed, risks have emerged, or corrective action is needed. For example:

  1. List of client matters that have not been touched (worked on) for x days per timesheets, calendar entries, etc.
  2. List of lawyers that billable hours, fee collections, are below target.

The goal of management exception reporting is to enable owners and managing partners to manage by exception, and spend their time on issues that require decisions rather than reviewing detailed and lengthy operating reports.

I suggest the following:

  1. Ensure that you are using all of the capabilities of your practice management software.
  2. Fully deploy your dashboards if your software supports them. Some systems require a higher-tier subscription to access dashboards or full customization. Check with your software provider.
  3. Ask your software provider if, for a fee, they will provide you with a customized report.

Recently one of our clients was able to have a custom report designed for them that allowed them to query the system and have exception report of matters no touched – no work done for a specified number of days, etc. A fee was charged for the development of this report.

Software is getting better with dashboards, etc. but often custom reports are still required.

Talk with your software vendor.

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John W. Olmstead, MBA, Ph.D, CMC

Posted at 09:43 AM in Financial Management, Management

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