Managing costs is an essential aspect of ensuring an efficient law firm. Firms of all sizes can greatly benefit from reducing costs. There are multiple strategies firms can use to maximize cost reduction, ranging from billing practices, reviewing overhead costs, pursuing automation, and more. Below are are a few tips and tricks to help firms utilize each of these cost saving strategies to the best of their ability. Remember: it's always important to figure out where unnecessary costs are most prevalent in a law firm's operations before implementing any of the below strategies. That way a law firm can speed less time figuring out what does and doesn't work.
It's important to ask questions when figuring out where cost reduction strategies are most needed. In terms of billing practices, consider how much time the firm spends creating billing and chasing collections. Often times, the time it takes to acquire payment from clients can end up costing more than what the client pays, and those costs add up. Inconsistent or ineffective billing practices are perhaps one of the biggest sources of unnecessary costs for law firms of any size.
In order to optimize billing practices, it's important to take steps to establish consistent and convenient billing processes. Give clients an easy and consistent way to pay, like using a case or client management software with automatic reminders, online payment options, and streamlined collections. If clients are late or behind on payments, consider charging late fees so that the firm is compensated for the delay in payment. In addition, clients have an incentive to make sure they pay on time.
Perhaps the most straightforward unnecessary cost has to do with the materials the firm uses on a day to day basis. In a truly digital age, paper just isn't as cost-effective as it used to be. While the cost benefits of going completely paperless can vary depending on a firm's situation, significantly reducing paper use is always a good idea.
Switching over to a primarily digital approach will reduce the costs of paper, printing, and filling. Over time, this will amount to thousands of dollars saved in operational costs as well as time savings for the firm. While digital services such as cloud storage can require a fee, the operational costs are ultimately significantly less than continued reliance on paper, filing and printing.
Figure out if there is anything the firm is paying for that has either a less expensive option or can be stopped all together. This could apply to anything, from letterhead to the law firm office space. For example, using a shared office space rather than a fully dedicated space can reduce costs, especially as more and and more individuals take advantage of flexible office time. What other overhead items does the firm invest in? Office furnishings, office utilities, subscriptions, and other incidental costs may be able to be reduced or avoided.
Using case management software can greatly save time on administrative tasks. Case management software has various features that make automation and digital administration simple and easy. Leveraging the power of technology to streamline redundant processes may require an investment, but the time savings is particularly impactful. Freeing up time to serve more clients or manage existing matters is a real gold mine.
Look for case management software, like SimpleLaw, that offers benefits beyond digital management but includes features like a purpose built contact relationship manager to help manage leads, potential new clients, existing clients, and contacts. Offering clients a secure portal that has everything clients need to share documents, view tasks and appointments, fill out intake forms, pay invoices, and more.
Another way to reduce costs is using on demand support rather than using full-time legal professionals. Not only does this allow firms to reduce costs, but it also provides a possible space for the next generation of legal professionals to enter into the field. In the ever-competitive legal services industry, experience plays a key role in validating a legal professional's resume and reputation. Having a few spaces on the firm's team for temporary or paralegal workers can give new legal practitioners a chance to get some experience and start building a professional network. It can also provide experienced paralegal practitioners and legal secretaries with a chance to use their skills for the benefit of the firm. Just because a person isn't full time doesn't mean their work is less valuable. Everyone has something to bring to the table.
There are numerous ways law firms can reduce costs, and many of these ways also present opportunities to add value to a firm in both monetary and non-monetary ways. The tips and tricks listed above are just some of the strategies law firms can use, and there many more available to firms that use case management software programs like SimpleLaw, which allow them to reduce costs in a personalized and customized manner. Figuring out cost reduction can be challenging, but it can be just as rewarding. Reinvesting the funds to grow the firm is always a good idea, too.