5 Easy Cost-Cutting Strategies for Law Firms

By and large, law firms respond to financial downturns better than most other professional services. However, after the unprecedented disruption of COVID-19, many companies offering legal services have seen their growth interrupted as a result. If your law firm falls into this camp, there are generally two paths to travel down — finding ways to bring in more business or implementing cost-cutting strategies.

In this article, we focus on the latter by outlining 5 simple but effective cost-cutting techniques that are guaranteed to expand your company’s bottom line. While flex loans and other financing options may help expand your resources, reimagining some of your current business activities might also pay off in the long run.

From utilizing tech to outsourcing services, stick with us if you’re looking for easy ways to streamline your law firm’s operations while cutting down on unnecessary spendings.

Go Digital

Simply put, paper costs money. Following this logic, if your firm turns its operations paperless, it’s an effective way to save a lot of money. According to research by the software developers Reckon, employee printing and the use of traditional filing methods can cost a small business as much as £14,616 a year, and this doesn’t even factor in the price of additional pieces of stationery.

Therefore, by switching to digital solutions, your small-to-medium-sized business (SMB) can cut back on overheads—without sacrificing its competitive edge.  

What’s more, in addition to the cost reductions of going digital, introducing new technology into your law firm can also improve efficiency. Specifically, by reducing the clutter of physical documents, your practice can become more organized, and you could potentially reduce your company’s office space and utility costs.

If this interests you, we recommend that you set measurable goals and establish a detailed paper-producing process before you implement any company-wide changes. 

Develop a Content Marketing Strategy 

The legal sector is competitive. So if your firm has been relying on the same marketing strategy for years, it may be time to revisit its effectiveness. It’s all too common for law services to pump their budgets into costly campaigns that aren’t delivering a promising return on investments (ROI).

But in 2021, content marketing can offer businesses a useful way to communicate to their existing customer base and attract new audiences without breaking the bank.

When figuring out your firm’s content marketing strategy, it’s advised to start with a strong content plan first. This content plan should consider all the varied ways you can repurpose longer-form pieces of writing into shorter, snappier pieces of copy for your social media channels. It’s also wise to brush up on SEO strategies like keyword research, link building, and user experience to ensure your content can rank as high on search engines as possible. 

Outsource Legal Services

In the present day, almost any law firm service can be outsourced. This means that if your company currently conducts its IT services, content production, administrative support, and financial services in-house, cheaper, more appropriate options may be available. Also, if your law firm is serious about cutting down unnecessary spendings, it may also be worth looking into legal process outsourcing.  

Legal process outsourcing is the practice of transferring services conducted by lawyers, paralegals and other professionals to other service providers based outside of the company. When using this method, firms typically outsource legal services such as document processing, contract drafting or litigation support, but there really is no limit to what services are available.

Legal outsourcing can rid firms of the routine tasks they conduct daily, and this can allow them to save time, lower their workloads, and crucially, cut costs. If this sounds like something your firm could benefit from, it may be useful to refer to this guide from the Association of Corporate Counsel.

Rethink Your Employee Benefits

Another way to reduce the overheads of your law firm is to reassess the benefits that you are giving to your employees. While this course of action may not be the most favorable way to cut down costs, it is possible to revise your employee benefits without your team losing out in the process.

A lot of legal firms automatically offer their workers extensive healthcare plans which cover a wide variety of needs. While these perks are beneficial to the health and emotional wellbeing of employees, in many cases, many of these services remain unused. In these instances, it might be wise to explore which other plans are available.  

One way your law firm could reform employee benefits is by offering members of staff a ‘basic plan’ which they can upgrade and customize to their needs if they see fit. This helps prevent services from being underused, and it also is a very effective way to cut back on extraneous expenses.

Consider Keeping Operations Remote

As a result of the coronavirus outbreak, large swathes of the population began to work remotely in 2020. This switch was much more common for those who were working in the legal sector, with a survey by Weekly10 revealing that 80% of UK legal workers ditched the physical workspace throughout this time. Now, as regulations are lifting and offices are opening up again, many business owners are opting to scale back their central headquarters to reduce unnecessary costs. 

While physical offices are useful environments to collaborate and socialize, now that remote infrastructure has been put into place, they may not be necessary to a company’s central operations.

By allowing some employees to work from home, considering co-working options, and renting out affordable conference spaces, law firms can still provide spaces where clients and colleagues can meet in person, without having to front the exorbitant overheads of a permanent office. 

Final Thoughts

Ultimately, your business’s long-term success hinges on its ability to keep profits higher than its outcomings. While changes can’t be made overnight, if you follow the suggestions we’ve listed above, your law firm has a much greater chance of controlling its cash flow—while staying competitive in this crowded market.

It’s best to take proactive measures to cut costs where you can. Once you’ve done this, you may even want to explore the business funding options that can help take your organizations to the next level.

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