Whether you run a big or a small firm, expenses are something a business owner is always looking to cut. Before you consider downsizing the business, lawyers and conveyancers should first consider how to reduce overheads outside of staff.
Taking the time to review your current processes can yield surprising results when it comes to expenses.
Reducing them isn’t easy, it requires creativity and trying out new things that you may have never considered. In this article, we discuss 5 ways you can reduce the overheads of your law firm.
1. Go Paperless
Going paperless can save your firm money in a variety of ways, from printing to distribution to storage. It is estimated that each employee would average 10,000 sheets of paper per year, costing roughly $500.
This cost is excluding the printer ink and maintenance. Imagine the savings you could make per employee if you switched to a paperless office.
You may think in legal work it’s impossible to go paperless, however with today’s technology you should reconsider. From compiling your contracts to settling, it can all be done through digital means.
Furthermore, to remove paper waste altogether you can use google notes, or digital Sticky Notes as an alternative notetaking method.
2. Negotiate with Suppliers
Whether it be in our personal or professional lives, it’s always good practice to shop around for suppliers and negotiate before signing.
To ensure your business is set up to achieve the highest profit, you want to achieve the best price for what you buy.
Successful businesses thrive off having good relationships, so in this process you need to ensure you don’t burn bridges whilst negotiating.
Each party is seeking a ‘win’ from this agreement, so ensuring there is a benefit to both parties will result in a much smoother transaction.
Building a relationship with prospects of continued use can also result in discounts, effectively removing the need to constantly find a new supplier.
By negotiating with your suppliers, in turn, you can reduce the fees you charge for your services, making your firm more attractive to prospective and existing clients. After all, your clients are all looking to save a dollar as well.
3. Switch to digital marketing
You can also reduce overheads by switching to digital marketing can be one of the most cost-efficient tools for your law firm.
Traditional marketing is great for increasing brand awareness because it has a large reach to an audience, however its hard to measure its success and if the cost involved was worth it.
Digital marketing, involves the use of online channels like email and Social media to promote your service. To build an email database and a social media presence will take time, but can be worth it in the long run.
A newspaper advertisement can cost you up to $1000 whereas you can post a Facebook advertisement for as little as $50 with the same, if not more, reach.
Social media is completely free for organic promotion and there a plenty of free email marketing software like MailChimp.
The benefit of using these digital platforms, other then saving money is that you get accurate data on how well an email or post went. Allowing you to evaluate your advertisements.
4. Take advantage of Technology
You already know how convenient technology can be and how much time it can save. But did you know the many ways it could help save you money?
Gone are the days where you have to go into work to access your files or verify a clients identity. Technology allows for remote working from any location.
While you certainly don’t want to eliminate personal contact altogether, save it for the instances when it’s most beneficial.
Additionally, by utilising digital tools available you can reduce labour costs.
For example, using Outlook/Gmail calendar reminders to manage your day, rather than having your receptionist or PA do it, can free up their time to complete other tasks. Time is money, so why not invest in tools will make your job easier.
5. Manage and set a budget for miscellaneous expenses
Miscellaneous expenses are all expenses that can’t be assigned to a common budget category such as food, clothing and entertainment.
In a business, this would be staff birthday gifts, Christmas decorations for the office or magazines for your reception.
Miscellaneous expenses can be one of the most challenging categories to manage and can turn your budget upside down if not carefully managed.
By allocating funds in your budget for these expenses, you can ensure they do not get out of hand.
The best way to manage these expenses are to account for it in the yearly budget and then review it monthly.
This will allow you to see if achievable or if you need to allow more for that budget. By keeping track of these expenses, it will help you and the business only spend on necessary items.
It’s almost impossible to run a business without some overheads, however these operating costs can be minimized or eliminated in many cases, leaving you with more money in your bottom line.
A business with streamlined operating expenses will have the best possible chance for success. For other tips on how to reduce overheads, subscribe to The Conveyancer Digest newsletter.