Keeping the cost down

 In Practice Management

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Keeping costs down in law firms

In recessionary times all businesses tend to be cost conscious and this recession is no exception. Many firms have a Spring year end and so now is the time to start looking at costs to make sure they fit the current profile of the business.

We have undertaken a number of exercises recently on behalf of clients to re-examine their overhead costs from the bottom up. Although, as with many professional practices, the bulk of costs are human, some real savings can be made.

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The devil is in the detail

Set out below are some real examples of cost savings found on behalf of clients:

  • Look at software packages and review their usage. Don’t renew any that are not used at all and review those that are to ensure that your licence covers the right number of staff.
  • Similarly look at the subscriptions and books budgets – for example we recently discovered a client who had failed to cancel their paper subscription to relevant journals, even though they had converted to electronic copies as well.
  • Savings can often be found in the small detail. For example are the papers and magazines in reception still appropriate for your clients and guests as the practice evolves and could some be cancelled or changed.
  • In terms of marketing giveaways some significant savings can currently be found without sacrificing quality in respect of things like pens, mouse mats and the like.
  • A critical area to look at is heat and light costs and insulation, particularly in older offices that are not nearly as energy efficient as they should be. Surprisingly many businesses leave the heating on for long periods when nobody is in the building only because no-one has reviewed the timings on the thermostat recently. Also many businesses are not using energy saving lightbulbs sufficiently and have a higher than necessary electricity cost as a result.
  • Reviews from the bottom up often have some unexpected side benefits – in one exercise we noticed that certain certificates on the wall were significantly out of date, even though there was a statutory requirement to display them.
  • Also look at marketing expenses, are they sufficiently targeted and appropriate for less affluent times? Also make sure you measure what you spend and work out as best you can how effective it has been.
  • Where services such as print or PR are provided by external agencies check when they were last price tested and review the services contracted for to ensure they still best meet your needs.

Conclusion

Having said all of this, it is important to strike a sensible balance between what can save cost and making cuts that can appear to be mean spirited to your staff and clients. Your clients will always remember a cold waiting room with an out of date newspaper and what it says about how much you care about them.

In summary the best approach is to undertake what is termed a zero based budget and build up costs that you have examined in detail, rather than accept blindly that this year starts with what was budgeted for last year.

Good luck, and I hope you find some real savings!

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