How to Reduce Costs Without Losing Productivity
When operating a law firm, you want to reduce the ever-present yet unavoidable overhead costs. This includes items and services you need to run your law firm but don’t generate income, such as phones, internet, office supplies, and salaries of employees who aren’t lawyers—and, unsurprisingly, it’s pretty easy to shoot past your budget.
However, you have options when it comes to reducing overhead costs. With today’s tech-friendly climate, there are tons of new ways to reduce overhead costs.
Lower Staff Turnover Rates
One often-overlooked source of expenses is your law firm’s turnover rates. Turnover rates are especially important to consider in today’s legal career marketplace, where candidates have the upper hand. And it’s not just attorneys—for entry or mid-level employees, turnover costs about 30-50% of their salary. For higher-level employees? It can be up to 150% of their salary.
During the COVID-19 pandemic, nearly half of lawyers said they are open to taking a new job if the right opportunity comes along, and one in ten are actively looking for a new job. This takes a huge toll on overhead costs. When you hire new employees, you’ll need to pay for recruitment, interviews, and training, all of which add up fast.
Build a better workplace
To reduce turnover, start by looking at your law firm’s culture. COVID-19 changed everyone’s idea of what acceptable work conditions are. If you don’t offer a good work-life balance, then your employees may look elsewhere. One place to start is offering remote or hybrid options for employees. With robust legal practice management software, your staff can maintain productivity from the comfort and convenience of their homes.
Find the right fit
On top of changing your company culture, you need to hire the right people to begin with. When looking at candidates, don’t be afraid to hire the first person you preferred in an interview. With such a hot job market, if you wait too long, they might take a job elsewhere by the time you make the decision. Plus, the longer it takes to hire someone, the more expensive it is for your company.
To keep your quality employees around, you can make the following changes as well:
- Provide competitive wages to increase employee retention
- Increase opportunities for growth within your law firm
- Introduce incentives for certain achievements
Legacy technology refers to outdated software or hardware that’s still in use. In most cases, legacy technology helps you get your work done, but it doesn’t necessarily allow room for growth.
Outdated technology can cause huge losses for a law firm. Crashes and system downtime can increase costs and decrease revenue. With outdated products, developers may not offer support or updates to improve issues. If you have a problem, you’re out of luck.
Instead, consider cloud-based legal practice management software that actually helps you save time in your work day. Plus, when you work on the cloud, you can work from anywhere. Modern software offers cost-saving features, including:
- Unlimited storage (you no longer have to store documents in filing cabinets)
- Secure file sharing tools so you don’t have to spend money on paper or postage
- Integrations with the software you already use, so you don’t have to replace every software your employees use and love. Just the outdated ones.
Commuting is everyone’s least favorite part of their day. After the pandemic, the last thing people want to do is spend time and money traveling to an office to do the same work they did at the comfort of their home. Your office space eats up 9 to 12% of your total overhead costs, depending on the area you live in. You can do away with your physical office space altogether and work from a virtual office.
However, if you do wish to keep an in-person office set up to serve your clients well, consider these cost-saving tips:
- Rent out some of your offices and utilize a smaller amount of space—a logical step if you work on a hybrid schedule and not everyone on your team comes in every day
- Move to a smaller office space if it still meets the needs of the firm, clients, and prospects
- Renegotiate a lower lease with your landlord
If you think you need more office space, consider implementing other changes first. If paper storage takes up a ton of your square footage, move your paper files to the cloud. This will save you both office space and time because your files will be much easier to find.
However, if you think a better location will land you higher-paying cases, then it may be worth moving to that more expensive address. Just be sure that you can afford it and that it won’t increase the overall ratio of income spent on office space.
Automate Busywork and Secretarial Tasks
With so much helpful technology out there, software can do a wide range of tasks for you. Look into these different software options to see how you can reduce overhead at your workplace.
Legal billing software lets you bill for time in seconds. When you use batch billing, you can process multiple invoices at once. You can also schedule automatic prebills with the software running them for you on a certain date. You can do all of this online—gone are the days of using an entire tree’s worth of paper to send out invoices.
Today’s legal billing software allows clients to automate recurring billing and payment plans. You or your accounting team don’t have to follow up with people and remind them of an overdue bill, because recurring billing reduces the chance of missed or late payments.
With document automation features, legal practice management software streamlines legal document creation. Use legal templates and custom fields to create documents exactly how you want them, then input client data from your legal practice management software.
Meaning: you get back the hours you’d spend on tedious data entry.
Plus, practice management software like Rocket Matter identifies your merge fields—before your document becomes finalized, it will notify you of errors or missing information. You won’t have to waste time and money on things like re-printing after a mistake because everything can be done online.
If you want to save on overhead costs like receptionists, consider implementing software that takes care of your phones for you. Ruby offers a virtual receptionist service that can route messages into legal practice management software like Rocket Matter. Another option is Smith.ai, which uses U.S.-based receptionists to qualify leads, route calls, block spam, and improve efficiency. They offer call-based pricing and don’t charge for spam or wrong numbers.
Reduce Overhead Costs with Rocket Matter
Step into the future of law with Rocket Matter. Our legal practice management software offers everything you need to run your law firm so you can go remote today. Robust collaboration tools make it easy for everyone to communicate, no matter where they’re located, and Kanban boards help everyone stay on the same page on a matter through online boards.
Rocket Matter gives you tools that reduce overhead, including:
- Unlimited storage so you can finally get rid of your filing cabinets
- Extensive legal billing so you can stop using paper and do it all online
- Secure file sharing so you don’t have to spend money on stamps and envelopes
See how easy it is to keep the employees you love and offer a remote or hybrid workplace by scheduling a demo with Rocket Matter today.