Cost cuts. I am sure those two words have been ringing in your ears for some time. As most firms still remain unsettled by national and global economic forces, this previous year, they rushed into quick cost cutting initiatives such as reducing staff and generic overhead costs. However, these types of impulsive cuts can only go so far. And if those limits are pushed, they can result in damaging your longer-term capabilities and prospects.
So as the 2014 planning season is upon us, how will your company focus on cost cutting initiatives? At Acrowire, we developed a list of eight tips to reduce your firm’s costs while increasing revenue. They are as follows:
- Review your processes and eliminate any unnecessary steps in the delivery of your legal services.
- Analyze your practice areas by identifying which are most profitable and least profitable. Exit non-profitable markets.
- Perform an in-depth review of client activity. Who are your most profitable clients and why? Who are your most unprofitable clients and why? Who pays late or doesn’t pay at all? Formulate a clear map of your market, and create steps to acquire more profitable clients while disengaging with non-profitable clients.
- Perform a firm-wide survey of partners and employees, warranting each plays a significant role in your firm’s success. Rework your staffing model, if needed, for improved productivity and profitability.
- Capture out-of-office hours more effectively. Create an app for better time tracking and management.
- Improve lawyer responsiveness, as timely responses are one of the most important factors in client satisfaction and retention. This might mean creating a virtual office for partners to use in order to better serve clients no matter where they are physically located.
- Identify areas of your firm that could better be performed by an outside vendors.
- Create, implement and evaluate a strategic plan, including a technology plan that is in alignment with your firms overarching goals and objectives.
It’s no surprise that many law firm leaders feel squeezed, as the financial crisis has re-shaped nearly all industries. While the legal industry had begun to face the need for change before the current economic downturn, the crisis has accelerated trends that will alter the structure and operations of law firms going forward.
Now is the time to take a step back and objectively identify those areas of your firm where you will procure the greatest return.