Reducing Cost and Adding Efficiency to the Law Office

Reducing Cost and Adding Efficiency to the Law Office

There have recently been a few surveys done concerning law firms and their earnings vs. expenses in the first few months of 2012. Apparently, the news is not very good. According to Wells Fargo and Citi Private Bank, most firms in the Legal Industrial Complex are spending more money than they make in order to stay in operation. This conclusion was reached based on information gathered from 115 and 176 law firms, respectively (some of which participated in both surveys). To be a bit more specific, the information that came back was that even though revenues had risen, expenses had risen even more so—making the overall profits go down.

This is very disappointing news, especially given all the attempts by law firms to reduce operation costs over the past 4 years or so. These attempts have included staff layoffs, lawyer headcount reduction, and  various more superficial overhead cost reductions. Still, rising expenses has continued to make management wonder what else can be done to combat the slow revenue increases and make doing business profitable.

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Alternative Solutions

Even though conventional ideas have all but run out, there are still some out-of-the-box solutions that are sure to help when dealing with this problem. Just ask Hal M. Stewart, COO at the mega-firm known as Chadbourne & Parke LLC, and he will gladly give you a few ideas in the form of technology-centric initiatives. In fact, take a look at the items below, and you will see how putting an emphasis on operating efficiency and by making improvements in the productivity of lawyers at any given firm can improve their bottom line.

• The cost of Back Office Functions can be reduced via outsourcing or relocating to low cost spaces.
• Scanning technology and document management systems can allow you to create Digitized Mail and Documents instead of relying on paper / hardcopy. All your legal pleadings, correspondence, and other client-matter can easily be stored, managed, and saved in digital formats such as word docs, emails, voicemails, and PDFs by using a service such as Dropbox or GDrive. It is also an excellent idea to create backups on other file storage and management services using a redundancy storage service such as cloudHQ.
• Hoteling and other techniques can be used in order to reduce office rent charges.
• The faster processing of client charges means the creation of a faster collection cycle. Streamlining the Client Billing Process through the use of workflow automation can be done through email invoice delivery, stop mailing paper invoices, and the electronic distribution of pre-bills.
• Client budgeting, the creation of informative finance reports, and doing these things in a faster and more effective manner helps you produce Actionable Financial Data.
• Lowering Telecommunications Costs is also very helpful. This can be done through the use of cheaper services such as VOIP. Also of great importance is the ability to forward phone calls and voicemail messages—as well as the ability to save them for later retrieval.
• If you are looking for a recruiting and communications tool, then Facebook is not a bad place to start. This site and others, such as LinkedIn, can be a great place to find quality professionals.
• For fast retrieval of prior work or drafts, document management systems can be used. This allows for efficiency through Document Assembly. However, retrieving the documents from systems such as Westlaw (or NexusLexus) can be difficult. It is suggested that the location where your Westlaw research is saved should be synced locally with you law firm's server or with Dropbox or GDrive. This can automatically be done using cloudHQ so that no extra work would even be needed.

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