In these uncertain times, smart law firms are scrutinizing their budgets for ways to cut overhead expenses.
Just be careful not to become penny-wise and pound-foolish. It’s a mistake – not to mention risky – to compromise client care for the sake of saving money.
“It can be tricky to reduce expenses without sacrificing internal or external quality,” writes Nicole Fallon for CO. “If you need to cut your overhead costs, the first step is setting aside time to comb through every single expense you have and understand exactly how much you’re spending. Once you’ve taken that step, you can start to assess what’s necessary, what can be reduced and what should be eliminated entirely.”
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12 Ways to Cut Overhead Costs
- Know what’s coming in and going out. Go over your monthly budget line by line. Flag any expense that is wasteful, redundant or excessive. Print a profit-loss statement for the past 12 months. See where cuts can be made.
- Leverage remote work. Allowing some or all of your employees to work from home at least part-time can result in huge savings on rent, electricity and office snacks.
- Cancel unnecessary subscriptions. Subscriptions for apps and cloud-based tools might be only a few dollars a month. But they can add up. Can any of them be eliminated?
- Reduce, reuse, recycle. Cultivate a cost-conscious climate in your office.
- Use Zoom instead of your car. Some meetings can be conducted by video conferencing right from your desk instead of having to travel, saving time and money.
- Explore automated solutions for routine tasks. “Instead of hiring a part- or full-time administrative assistant to shift back office work off your plate, try to automate things like invoicing, appointment scheduling, client follow-up and other manual tasks,” according to Fallon. “You can further reduce costs by investing in an automated live chat service as the first point of contact for customer questions.”
- Go paperless. There’s never been a better time to start.
- Take a look at your caseload. What type of cases are the most profitable? Which are a financial drain? Focus on cases that you can handle expertly and efficiently.
- Evaluate your marketing strategy. “Before you continue with your current strategy, evaluate each channel and campaign to determine your return on investment,” says Fallon. “Measure different marketing channels. If you find one isn’t working, then allocate your budget according to the data.”
- Reduce turnover. You may not be hiring new employees, but your focus should be on keeping the ones you have. The costs to U.S. businesses of employee turnover is $1 trillion per year.
- Negotiate with vendors. Reach out to them. Ask for more time to pay your bills if you need it. Work out a new payment plan. Request a price discount, if only temporarily. “Vendors and suppliers are often willing to help out their small business clients and cut them a break to weather the current economic climate,” writes Fallon.
- Bring in an accountant. The added expense will pay for itself.“ It never hurts to have another set of eyes,” says Fallon. “A professional accountant can offer an objective analysis of your budget and potentially help you save even more on overhead costs.”
If you practice in Wisconsin, Texas, Minnesota, Ohio, Illinois, Indiana or Michigan, you can stay on top of ethics and risk management news by being a member of Alta Pro Lawyers RPG. You’ll get access to free webinars, the Pro Practice Playbook, Reminger ProLink, Ask the Risk Pro and more. Here’s how to join.