8 Ways Law Firms Can Reduce Their Overheads Without Affecting Productivity
You didn’t become a lawyer, or get to the top of your practice, without serious drive and ambition.
But sometimes the difference between success and loss comes down to simple money management. It’s easy for expenses to get out of hand before you realize it – particularly when you manage a big firm.
If you’re looking for some cost-cutting ways to streamline your operations, look no further.
Cost-Cutting Tips for Law Firms
If you’re watching the cash roll in and roll right back out again, try these cost-cutting tips:
1. Switch to Document Automation
You’d be shocked how much of your staff’s time documentation can eat up.Document automation software is a specialized program that helps you prepare legal documents is less time.
With software like HotDocs, you’ll input the relevant information once and the software plug it into the document as needed. You can customize the documents to meet your clients’ needs, all in a fraction of the time.
2. Rent Out Your Conference Room
For many law firms, real estate is a massive expense. After all, a high-end office is an important way to instill trust in your clients that you’re an experienced professional.
Instead of moving to a cheaper office and incurring all the expenses that come with moving, consider renting out the space you have. You can rent out your conference rooms or other spaces to local businesses when you aren’t using them. There are plenty of start-ups without permanent offices who need space for occasional meetings.
3. Opt for Independent Contractors & Remote Workers
Personnel is another major expense for most law firms, but do you need as many full-time employees as you have? For some positions, consider switching to freelance workers or independent contractors instead.
If you’re like most business owners and you want to avoid layoffs, you could also transition some in-office employees to remote employees. Many of your tasks don’t need to be done at your office, and fewer on-site employees mean lower costs.
Some law firms are concerned about security for remote employees or contractors. Rest assured that you can institute many of the same security protocols you use for on-site employees, like confidentiality agreements and security software.
4. Take a Close Look at Your Marketing Campaigns
It’s easy to use the samemarketing strategies for years, but are they as productive as you think? It may be time to take a closer look at the numbers.
Make sure your staff tracks new clients and new leads, finding out how they heard about your firm. Take a look at the data to see which marketing strategies are getting a strong ROI and which aren’t. It may be time to make some cuts.
5. Keep a Closer Eye on Expense Reports
As much as you want to believe you’ve hired the best of the best, that’s not always the case. Entertaining clients and contacts is worthwhile, but some employees may be taking advantage. They could be charging their personal dinners and other expenses that aren’t gaining business for you.
To put a stop to potential misuse, consider requiring more documentation for expense reports. For instance, require employees to report who they took to dinner and track whether their guests are true prospects.
6. Evaluate Rent vs. Buy Situations
Many law firms rent equipment or use temporary services instead of buying a more permanent option. This might have been cheaper at the time, but is that still the case?
One example of this is document shredding. Thecost of shredding services can add up as your firm grows. Maybe it was less expensive than buying your own shredder when you had 10 clients, but now that you have 50 clients, the tables might have turned. You could have a similar situation with rented office equipment like your printer and copier.
7. Re-Evaluate Your Policies
When you first started your law firm, you may have had certain policies to gain business, like free consultations. As your reputation has grown, though, perhaps you don’t need this incentive anymore. Have you analyzed how much money it’s costing you?
Some law firms have a similar problem with pro bono work. Every firm needs a certain amount of pro bono work, but it may be more out of hand than you realize.
8. Opt for Conference Calls Over In-Person Meetings
Depending on your billing policies, your staff could be wasting valuable time traveling to meetings. In-person meetings also tend to take longer because you’re more likely to chat off and on.
Instead, choose conference calls whenever it’s reasonable. This eliminates travel time and helps your employees spend more time on-task.
Of course, there’s a caveat. Don’t go overboard withexpensive conference call services. You need enough quality for easy communication, but don’t fall for all the bells and whistles some pricey services offer.
Becoming a Lean, Mean, Law-Practicing Machine
Running a successful law firm takes more than being great at what you do. You also have to be able to manage your expenses and your employees with efficiency. The cost-cutting tips above can get you onto the right track.