Practice Management vs. Document Management for Law Firms

Practice Management vs. Document Management Software – Whats’ the Difference?

At Uptime Legal we help many law firms evaluate, select and implement software to help them manage their practice. We typically start with a basic needs assessment, which often includes the question: What kind of software is your firm looking for? Does your firm need Practice Management or Document Management software?

Oftentimes response we get is: “What’s the difference? Aren’t they the same thing?”

The short answer is: no. Practice Management and Document Management are two different categories of software. And this isn’t just semantics, these are two different kinds of applications made for two different purposes.

We realize that the differences, similarities and (slight) overlap between these two categories is often unclear. Sometimes lawyers don’t fully grasp which they need, and why. Other times lawyers we work with assume that one type of software includes the other. It’s okay, it’s a common point of confusion. And, it’s due, at least in part, to the way that many Practice Management software companies describe their own products (more on this later.)

So in this article we’ll demystify the terminology, explain Practice Management software, Document Management software, and we will provide clarity to which type of software your firm needs (if not both).

Let’s get started.

Looking for Document Management Software?

LexWorkplace is cloud-based, matter-centric document and email management made just for law firms. Get in touch with our team to learn more.

What is Document Management Software?

A Document Management System (DMS), as the name implies, helps a law firm manage their documents. But not just documents: Email, notes and other kinds of content. The practice of law is often a document-heavy business… contracts, motions, emails… there’s a lot to manage. And as your firm grows, your client and case list grows, and your team grows, the mass of content only becomes larger and more unwieldy.

A Document Management System provides two fundamental capabilities. It is:

1. A central repository to store documents, email and other types of content, and:
2. Provides tools for your firm to effectively manage documents and data.

A law firm can get #1 (storing documents) from many different services and technologies. Simple cloud storage, an on-premise file server, the G: drive: You don’t need a Document Management System just to store files and documents. What makes a DMS different, and necessary for many law firms is #2: tools to manage those documents.

Some law firms, particularly solo and small firms, don’t need any more than simple storage to hold their files and documents. Many law firms, however, especially law firms of about 5 total people or larger, begin needing more sophisticated tools to keep their arms around their growing data. Tools to catalog, search, comment on and generally keep documents in order. That’s where a Document Management System comes in.

Related:

Learn the difference between a Document Management System and basic cloud storage.

Document Management Capabilities

So what tools does a DMS provide beyond simply storing files and emails? While each document management product varies, they generally provide the following capabilities.

• Organization – A DMS will provide structure and organization to your documents beyond the (default) wild-west of folders everywhere, without any semblance of organization. A good, legal-centric DMS will organize documents by client or matter.
• Index & Search – A DMS will provide full-text search, allowing everyone in your firm to perform a Google-like search across all of your documents, email and notes (regardless of how much data your firm has).
• Version Management – Document Management software typically provides bult-in version management, allowing you to view previous versions and add comments to each document iteration.
• Check-Out / Check-In – Allowing you to keep documents locked so others cannot modify then while you’re working on them.
• Microsoft Office Integration – Allowing you to save documents and email directly to your Document Management software (and directly to the relevant client or matter).
• Email Management – Good Document Management platforms integrate with Outlook, allowing you to save relevant email directly to a matter, where it lives alongside other documents and data for that matter (and where other people in your firm can access them).
• Document Tagging and Metadata – Another staple of Document Management software is the ability to tag or profile documents; that is: adding document types, statuses and other classifications.
• OCR – The better law firm Document Management software applications support OCR, either built-in or via a third-party integration. OCR automatically converts scanned documents (images) into text-enabled, searchable documents.

Related:

Learn more about the capabilities of a Document Management System, and why your firm probably needs one.

Related:

Learn more about the power (and importance) of OCR in a law firm.

To understand the fundamental difference between Practice Management and Document Management software, we have to really understand what makes a DMS a DMS. These capabilities and features are just that, and that definition becomes the crux of the difference between these two types of software.

Popular Legal Document Management Applications

There are a short list of popular Document Management Systems used by law firms. These include both older, premise-based applications as well as modern, cloud-based document management systems. Popular law firm DMS solutions include:

• Worldox – On-Premise or Hosted
• iManage – On-Premise or Hosted
• NetDocuments – Web-based
• LexWorkplace – Web-based

Related:

Explore the most popular legal Document Management Systems used by law firms today.

Related:

Explore the most popular legal Practice Management Systems used by law firms today.

A Key Point of Confusion

These, in general, are the features of an LPM application, and what makes Practice Management software Practice Management software.

Notice that last bullet, with the asterisk. There’s an important reason I noted this feature this way. Most LPM applications can interact with your documents in a number of (limited) ways.

Some premise-based LPM applications can link to documents you’ve stored elsewhere. For instance, if your law firm runs premise-based Practice Management software and also has an on-premise file server, and your firm stores matter-related documents in the S: (network) drive… your Practice Management software may allow you to link, for instance, specific documents in S:MattersSmithMatterMotion.docx to the Smith Matter in your LPM software. (Effectively, a shortcut.)

Some cloud-based LPM applications allow you to upload and attach documents to a particular matter. (Similar to attaching a file to an email.) You, for instance, attach Motion.docx to the Smith Matter in your cloud-based LPM software…and that’s about it. It’s good for simple filing of documents, but usually doesn’t allow for or provide any additional tools to manage that document (like version management, tagging, profiling or search). This kind of integrated storage is akin to a simple Google Drive built into your Practice Management software.

Now, for some firms, this document linking or attaching is all a law firm needs (particularly, solo and small law firms). And if that’s you: That’s just fine.

But here’s the problem.

When many Practice Management software companies describe a list of their software’s features (such as time and billing, calendaring and so forth), when it comes to describing the document linking or attaching capability… they don’t call it that.

What do they call it?

You guessed it: They call it document management.

Which you now know, based on our definition above, it most certainly is not. Linking or simply attaching a document is not Document Management. The problem becomes: When someone at a law firm, not up to speed on all the semantics, sees “Document Management” listed as a feature of a particular LPM application, they may think: “Great! Document Management is built in!”

And they assume, based on that label, that this Practice Management application will come with the entire Document Management suite we described earlier (search, version management, OCR, tagging and profiling). Which it doesn’t.

And that’s where all the bodies are buried.

Closing the Loop

So when it comes to Practice Management vs. Document Management software for law firms, remember that they are two different categories of software, made for two different purposes.

Your firm may need Practice Management software.
Your firm may need Document Management software.
Or your firm may need both.

Does your firm need to track time, create invoices, manage cases and calendars? If so–your firm needs Practice Management software.

Does your firm need to store and organize documents and email, manage document versions, OCR documents, index and search for documents? If so–your firm needs a Document Management System.

This varies from firm to firm, and ultimately comes down to the unique needs, challenges and objectives of your law firm.

Related:

Learn about the three primary types of law firm software: Practice Management, Document Management and Accounting.