In times of economic stress, such as the current recession, law firms have less control over their incoming revenue. Ben Franklin’s adage, “A penny saved is a penny earned,” is as true today as it was in the 1700s. Careful spending or improved business practices that increase the bottom line can make a firm more efficient and profitable.
Your law firm may find that a focus on collecting accounts receivable, insuring that billable time and expenses are recorded and dropping clients who do not pay can make a tremendous difference in the overall profitability of the firm.
We have developed some additional tips that can help your law firm save money and resources. While some of these tips may be obvious to experienced law firm expense managers, they all offer great potential savings.
Technical problems are a fact of 21st century life. Emergency services can be expensive and inconvenient. In addition to the upfront costs, you may lose valuable time while your computer or network is down. Turning to online services for troubleshooting can prevent a break in service as well as save you money. For example, anti-virus vendors like MacAfee can log onto their customer’s PC to find and remove viruses remotely.
Voice Over Internet Protocol (VOIP) services offer another opportunity to save money. VOIP involves paying a small fee every month for unlimited long distance over the Internet. Other services, such as faxing or call forwarding, can be added.
Attorney Ken Hardison, of the PILMMA lawyers marketing association and the Hardison & Cochran North Carolina injury law firm notes that this service will save you money on your long distance bills every month.
Hardison also suggests managing your IT services by buying chunks of hours rather than paying a monthly service fee for continuous service. Under this scenario, you will have a regular service provider at a set price, but will not be paying for services you don’t need or use.
Review, Then Review Again
Monitoring where money is spent and what it’s spent on allows a law firm to analyze its spending patterns and identify places to save. For example, with the rise of the Internet, marketing and advertising have changed rapidly. Methods that once delivered great returns may no longer be effective.
“Just because you have always done it, such as telephone book advertising, doesn’t mean you have to keep doing it if you can prove you are not really getting cases from the sources,” points out Marita Papparelli, firm administator at Munley, Munley & Cartwright, P.C., a Pennsylvania personal injury and truck accident law firm. “Perhaps take the telephone book advertising dollar and redirect to something more viable, such as website advertising or creating a mobile site for your firm.”
Setting up a regular review time in order to examine all areas of the budget can be extremely effective. Many budget areas that you take for granted may offer surprising opportunities to save.
One example is insurance rates. Can you re-negotiate them? Raising your deductible to lower your overall rate is one option. Sometimes, an insurance company will offer discounted rates to long time customers. It’s also worth shopping around to see if someone else can fill your needs for less. Don’t forget to reconsider medical and dental insurance as well.
In the Office
No matter what size law firm you operate, you are going to need office supplies, staff and perhaps office space. Furniture, supplies, utility bills or building fees – all these expenses add up, and they can be additional places to save.
- Supply Managers. Each manager should be responsible for a small budget for their department. Ken Hardison suggests creating a budget at the beginning of the year. If office managers come in under budget, they can get a percentage of the money they save. This is a great way to motivate employees.
- Shop Online. Everyday items like pens, paper, envelopes and paper clips add up. Marita Papparelli suggests ordering online. Many national chains, like Staples, offer free shipping if you spend enough on your order. This has the added advantage that staff members don’t have to waste time running around buying supplies.
- Go Green. There are numerous steps you can take that will help the environment while reducing costs. For example, re-examine how much you really need to print. Instead of printing documents and faxing or shipping them, see if it’s possible to scan them and send them by e-mail. Double sided printing can also save paper. Some tips to reduce your utility bill include:
- Using laptops instead of desktops. Laptops use less energy than a monitor and a fully loaded tower.
- Fill your office space with plants and greenery. Plants emit oxygen and clean the air of impurities. They also make an office more homelike and attractive, which may raise staff productivity and make clients feel more comfortable.
- Use energy-efficient light bulbs.
- Car pool.
- Free (or almost free). When hiring, look for staff on the Internet. Many free sites allow job-seekers to post their CV and job qualifications. You can also post a job ad for free on Craigslist. Consultwebs and several of our clients have obtained excellent employees from Craigslist. Take advantage of free software and open source software and save hundreds of dollars.
Outsourcing Advertising and Marketing
Advertising and marketing account for a large portion of a law firm’s financial success, reputation and branding. It makes sense that a huge chunk of most budgets is spent in these areas.
It is important to spend these dollars wisely. While the do-it-yourself route can sometimes realize great savings, on other occasions. it actually costs you money. Advertising and marketing require specialized knowledge and experience, never more so than in this Internet age. Hiring people with all the skills to put together a professional web campaign in-house, for example, costs hundreds of thousands or even millions of dollars. An SEO company, like Consultwebs.com, Inc., can provide you with an extensive, professional, state-of-the-art marketing campaign for a fraction of that cost.
- Outsourcing. One of the main benefits from out-sourcing is the “virtual worker.” Not only do you pay for them only when you need them, but they do not incur other costs, such as benefits, sick time, vacation pay or training. Imagine hiring a team of professionals for less than the cost of a single worker and having access to a variety of expertise exactly when you need it.
“Web marketing can be very challenging for a law firm,” Consultwebs.com CEO Dale Tincher points out.
We are aware of some firms that have tackled doing their own SEO and have achieved mixed results. Challenges include finding and retaining SEO personnel and finding designers, programmers and content developers.
Dale recently wrote an article Should A Law Firm Consider Doing Its Own SEO that you should find helpful.
- Odds and Ends. Consider hiring contractors after hours or when needed to do smaller jobs, like custodial duties, yard work or maintenance. Depending on the size of your firm, yearly inventory reviews, payroll tasks and financial consulting are all tasks that can be handled by other agencies for smaller fees instead of employing a permanent staff member to do them.
- Advertising/Marketing. Promote yourself! There are many things you can do to raise your law firm’s profile. Networking with other lawyers and professionals in other fields can help reach potential clients in need of your services. You can join on-line listservs, attend conferences and workshops, use office letterhead and pass out business cards to get the word out. In any of your office mailings, be sure to include a newsletter or flyer to promote your business. Websites, links, annual conferences and mailers all do their part to increase the name recognition of your law firm. These tactics avoid the brashness of TV commercials, which can turn off potential clients. Using letterhead, business cards and attending well-known conferences are other ways to promote yourself and get the word out about your firm.
- Community Service. Community service can be an excellent opportunity to meet others in the community and show the genuine, caring side of yourself. Doing good by others will help build a solid and upstanding reputation in your community!
- Get Involved Online. The Internet offers multiple opportunities to promote your firm: forums, blogging and social networking. Regular participation in online discussions allows you to showcase your expertise, while posting on social networks can help clients see a more personal side of your firm. If time does not allow you to do this, you can outsource the task to a savvy social media team. They can take care of your online blogs, Facebook page, Twitter and other social media accounts.
Travel – for meetings, conferences, on behalf of clients or for other purposes – can be a large part of what makes a professional successful. However, it can also be expensive. Before you set out or plan your next trip, consider ways to save money on travel.
- Air Travel. Book your trip as early as possible. Generally, the longer you wait, the more the fare will cost. Travel websites such as Priceline.com, Expedia.com and Orbitz.com will search out the best rates for you. However, don’t forget to check the ticket restrictions and refund clauses. Remember, non-refundable tickets are generally cheaper, but if you have to change your flight, it will be difficult and expensive.
Also, collect frequent flyer points and use them. In fact, join all the programs in which you can take advantage of various perks or conversion options offered. Perhaps you can turn your company credit card into a points-card and benefit from free flights or hotel stays. Consult with a travel agent to see if you can negotiate cheaper fares if you buy in bulk. This is handy for frequent travel and trips that can be planned over the course of the year.
The better you plan, the more you will save. Combining trips and booking ahead can save you considerable money. Don’t forget about the one-way discounts you can receive from various online agencies.
- Fly Coach. Save money by buying coach tickets. Many online reservation systems allow you to use your memberships to choose better located seats so you can feel like you are closer to the front. In addition, you may be able to use points to upgrade your tickets. Or fly Southwest, where you choose your seat as you board. An extra $15 or $20 gets you a ‘Business Select’ ticket that allows you to be one of the first on the flight.
- In Lieu of Air Travel. How much distance will you be covering, and how long will it take you? If the cities you are traveling between aren’t too far apart, consider the train. Once you add up the time you need to get to the airport, go through security, board your flight and claim your baggage, you may find it’s faster as well as cheaper to take the train. Many businesspeople in the northeast corridor, for example, wouldn’t consider flying between Boston and New York or Philadelphia and D.C. Trains have the added benefit that you can work along the way.
- A large group might be able to save money by renting a bus or a mini-van. Here again, you can work while you ride, and you can also participate in team-building activities. For most of our Consultwebs conferences, we typically rent a van that also comes in handy during the conference.
- Hotels. You cannot avoid staying at a hotel-type accommodation when you travel, unless you stay with family, friends or own your own property. Doing a bit of homework allows you to find great savings and deals.
Look for the word FREE! Free Internet. Free Breakfast. Free Shuttle. Free Stay. Free Rewards. Look for hotels that give you some small but useful benefits for free. Having to pay for breakfast every day can add to your bill as well as paying for a shuttle to and from the airport.
If you have a preferred hotel, contact the manager and ask which times of the year are lower traffic. Also ask if they offer discount rates during that time, or if they offer free upgrades or other discounts if you book with them multiple times over the year. Plan your meetings or conferences during the off-season if possible, allowing you to take advantage of lower prices.
Always negotiate. Don’t ever assume that a price is fixed. Even if you call, you can ask for “the Internet rate.” Ask for the AAA, AARP and senior discount rates when applicable (see below). If you aren’t concerned about the view outside the window, you can typically save a considerable amount of money using Priceline.
- Location. Figure out if you really need to be downtown. If not, booking a hotel a little out of the way will land you some better deals. However, take into consideration travel expenses: Will you spend more on renting a car or taking cabs than you would paying a higher price for a more convenient place?
Also consider what amenities you need or will use: Do you really need valet parking, turn-down service or five-star accommodations?
Short-term rooms and apartment rentals are sometimes available on websites such as roomarama.com.
- AAA. Corporate Rates. Senior Rates. Your membership with AAA will often land you cheaper deals, even on some of the Internet booking sites. Also, when speaking with the hotel directly, ask for their corporate rate and compare that with the Internet rate.
If you always book online, you may be missing out on free upgrades or discounted rooms, so always make sure to call the hotel to double check. If you do book online and have an adventurous spirit, you might take advantage of all the cheap (mostly non-refundable) hotels in secret locations. On a “blind-selling” site, you fill in your general location and choose the hotel amenities you want, and the site matches you with a hotel. However, you only find out the exact name and location of the hotel after you’ve paid. These sites are particularly useful when you’re looking for a last-minute airfare or hotel room.
- Meeting/Conference Venues. If you frequently host conferences or large meetings in the same area, it’s worth negotiating with the hotel. You can even offer to fill up some of their empty blocks during the low season.
Check in your area for free places to host your meetings. Local art galleries, recreation centers or libraries may be suitable. Or why not have a meeting outdoors? Some churches and synagogues offer free rooms for members. Community centers or senior centers may also offer meeting rooms to residents for free or for a small fee. If these solutions don’t fit your needs, check with your local convention center or university for discounted or package rates as they will be sure to have all the A/V equipment you need.
If you are using hotel space, have the attendees book their rooms at the same venue as the conference and you will find better room rates (block rates) and discounts for everyone. It is well worth a phone call to take advantage of great savings and offer a more convenient option for those attending your event.