Reduce overhead costs for a thriving legal practice

Part of the business of running a law practice is keeping administrative expenses low. This reduces the financial burden on the practice so you can focus on excelling at legal service and bringing more clients into the firm. Here are just a few ways you can bring down your overhead costs and see your law firm thrive.

Write a business plan

A strategic business plan can help you create clear, actionable goals for your law firm. As part of the business planning process, you can map out your place in the local legal landscape. This might seem a bit removed from overhead costs, but knowing your strategic direction can help you to make cost-effective decisions. 

Your business plan sets achievable goals and targets for revenue. It makes these assessments based on local market analysis, competition from other firms, and the return on investment you expect from marketing strategies. Once you have this in place, you can return to it frequently to assess your satisfaction with the firm’s growth.

Develop a budget

A budget allows you to visualize the regular expenses of running your practice. Your budget should be realistic, so you can use it to assess how much money you need to make to turn a profit. Reviewing and updating your budget every quarter can help you to continually look for ways to save or to use resources more efficiently.

If you have already set up your practice, you have likely already paid for several start-up costs like furniture and information technology (IT). A monthly operating budget looks at the money you need to keep the lights on. Your budget should include:

• Office space lease or rent
• Utilities like power and water
• Maintenance and cleaning services 
• Employee wages and benefits
• Answering service or virtual assistant
• Marketing services
• Specialized software like a customer relationship management (CRM) solution
• Legal research library or database subscriptions
• Taxes
• Debt repayment or debt servicing

Downsize your office space

Carrying a lease, not to mention heating, electricity, maintenance, cleaning, and supply costs can take up a huge chunk of your budget. One way to reduce overhead costs is to share the burden with other law firms. You can enter into an office-sharing arrangement with others where these costs are split between tenants. 

Instead of taking on full-time reception staff, practices might share some of these services. That way there’s always someone available to speak with a potential client or greet someone arriving for a meeting — but you don’t have to pay for full-time staff during slow periods.

Embrace automation

Automation can help make your administrative tasks more accurate and efficient. Through automated billing, you can issue invoices quickly and improve the chances of on time payment. Billing software can also help with your budget planning as you have easy access to outstanding payments and can plan for incoming revenue.

Software that keeps a record of case information such as filing deadlines, digital evidence, and client correspondence keeps your firm on track. You’re better able to serve client needs without excessive labor costs from legal assistants who have to spend time combing through paper files and manually updating case logs.

Review your expenses

Going over your costs every month or so helps you to see how you’re actually spending money. Reflecting on recurring payments can help you to spot unnecessary expenses. Some costs might not serve your firm and are just money out the door. Some items to assess include:

• Subscriptions to legal research databases. Ask if you need multiple database subscriptions or can reduce access for a lower cost.
• Subscriptions to practice management software. Ask if your software subscriptions are still meeting your firm’s needs. Perhaps you’re paying for a higher tier of service than is necessary.
• Cost changes. Subscriptions typically go up in price periodically. Examine your bills to see if this happened while you weren’t looking, and whether you still really need this service.
• Energy costs. Look at your office expenses like you do your home expenses. Implement energy-saving measures like turning off unnecessary lights and turning on energy-saving features on equipment. 
• Bank fees and vendor late fees. Automation can help you to get paid on time. You also save money when you pay your firm’s bills on time. Review the bank fees, late charges, and other levies that you can eliminate in future by implementing greater administrative efficiency.

Use Martindale-Avvo’s monthly marketing services

You can keep your overhead costs down by using your marketing budget more effectively. Martindale-Avvo’s monthly marketing services help you access qualified leads and promote your practice online. With Martindale-Avvo you can also capture potential clients with live engagement. Learn more about how Martindale-Avvo can help you grow your practice by contacting us today.