If your practice has suffered because of the COVID-19 pandemic, how to cut law firm costs is no longer something to consider. You need to do it. If your firm is on solid ground as the pandemic grinds on, cutting costs will improve your bottom line. With the right kind of cost-cutting, you could save and make money.
How to Cut Law Firm Costs
There are many ways worth trying. You could go paperless and increase automation. Your office may entirely or partially operate from home. You could shrink your office, so it’s a place to work part-time while working at home part-time. Another option is to meet clients outside of the office.
How can law firms reduce expenses? A high cost may be payroll and benefits. You could save money by trimming around the edges. Is there enough work to justify everyone’s position? Is there anyone whose hours can be cut without impacting the quality of work?
Who does what and why? If you think hard about this, you may find another approach that could cut payroll and benefits costs. It should also free up your time and the time of partners and associates. These savings could help you generate new clients and more cases.
How Can Law Firms Reduce Expenses While Getting the Same, or More, Work Done?
Legal outsourcing could reduce costs, because hiring a contractor should be less expensive than the wages and benefits provided to an employee. It could also save your staff time and effort. Cutting your electric bill or using cheaper paper won’t do that.
Using outside contractors can allow your staff and lawyers to focus on the highest value tasks. If your firm’s work ebbs and flows, so can your workforce. You could keep a small staff, then ramp up and contract work out to outside paralegals or attorneys as needed. With more of the physical and mental “busy work” passed on to others, you could do other things.
If you bill by the hour, savings could allow you to cut rates to make existing clients happy (perhaps resulting in more of their work coming your way) and attract more clients. You could also maintain your rates and have a bigger profit margin. If your firm works on contingency fees, lower costs will improve your bottom line.
What you outsource is up to you. The more mundane work is outsourcing’s low-hanging fruit. You may wait hours for a court appearance where nothing of consequence happens. You may have a high volume of the same or similar cases. The constant repetition of similar court filings, motions, propounding, and responding to discovery cries out for outsourcing, if not partial automation.
There are risks to this approach, like finding the right employee. You need someone who takes direction, is easy to work with, is reliable, and does quality work. This person may work for several firms and not be available when you need help. Managing several freelancers will take time and effort. If you’re unwilling to give up some control, these independent contractors may seek wages and benefits by claiming they’re treated as employees.
How Do You Find These People?
There are freelance attorneys and paralegals at all experience and skill levels. They could handle discovery and do legal research. An outsourced attorney could write briefs and motions, then argue them in court. You may take on a case more complicated than usual. You could get help from a freelance attorney specializing in that issue or area of law.
Many outsourcing firms and freelancing websites can get you the help you need when you need it. People could be local, live in the U.S., or reside in another country. You could cut out the middleman and place ads in local media, Craigslist, or websites like Monster or Indeed. You may find local attorneys or paralegals looking for additional as-needed work or leverage the internet to find candidates anywhere in the U.S.
How Can Law Firms Reduce Expenses and Become More Profitable?
With more work performed by contractors, you and the other attorneys in your firm should have more time. You could spend it generating more clients. Or you might spend more time with your family; you could improve your golf game. Benefits to your state of mind can improve your ability to perform when you are working.
Digital marketing and advertising have their place, but law firm development takes time and energy. All attorneys, no matter their role in a law firm, need to do their part. Networking, creating new referral sources, developing new clients, and getting more work from existing clients are all critical work. With more tasks outsourced, you may be able to leverage freed up time and energy to build a bigger, better law firm.
What Makes a Law Firm Successful?
Building, managing, and maintaining a successful law firm is not easy. It takes time and effort. A Lawyers Marketing Associates’ law firm consultant can help you organize your firm in every area necessary for success. We can give you options and make recommendations to grow your firm. Focus on your clients and handling legal matters. We’ll take care of the rest. It’s what we do.
Contact LMA today at (919) 637-9144. Let’s make your law firm the success it can and should be.