Cutting Costs as a Law Firm Means Embracing Technology
Cutting the cost of doing business is something that every law firm will have to consider at some point. According to Law Crossing, the average law firm spends between 45% and 50% of its client fee on office expenses. Based on this, a £100 per hour charge would result in approximately £50 being spent on operating costs. Naturally, there will always be operating costs of some sort. However, with computers now able to handle many of today’s more time-intensive tasks, it’s possible to reduce the amount spent on things such as admin. Indeed, in addressing the issue of spiralling costs, Legal Management Consultants Olmstead & Associates cited headcount as one area companies often overlook.
“This is the largest area for potential savings. Downsizing is a strategy that has been used by many firms this past year. However, it can have long term negative consequences for revenue and talent management. Consider all levels – non-productive partners, associates, paralegals, and staff. Be prudent and sensitive in implementation,” reads the advice.
Using Tech to Create an Efficient Workforce
Clearly, striking the balance between staff and efficiency is crucial. To this end, technology has become more significant for the average law firm. One of the most interesting uses of modern tech in recent years is robotic process automation. Otherwise known as RPA, this technology allows companies to delegate workflow tasks to computerised systems. For example, the Kryon RPA Platform provides a virtual workforce that can be configured to suit a company’s individual needs. This could be anything from remote access and monitoring to setting up tasks such as payroll, timesheets and billing.
In fact, what RPA tools are able to do in addition to repetitive tasks is to learn. Using artificial intelligence and machine learning, RPA tools can analyse large data sets and help to optimise things such as media campaigns and costs. The implementation of RPA tools also gives law firms the option to either reduce their headcount or make better use of the personnel they do have. Overall, the end result is cost savings and, over time, a more efficient workforce.
Become a Virtual Office
“cloud computing” (CC BY 2.0) by Bruce Clay, Inc
Beyond these tools, the Law Society points to cloud computing as another way of streamlining a firm’s operating costs. By moving IT infrastructures to a cloud server, companies can not only free up physical space and resources but also their tech team. Because IT staff don’t have to worry about maintaining physical servers, they can spend more time on improving the actual software employees are using. Additionally, cloud computing makes remote access possible. By allowing employees to work from home, business owners can reduce staffing costs by hiring freelancers and even their company more attractive.
Indeed, a study by IWG found that 70% of people globally now work remotely at least one day per week. With technology improving and working habits changing, this figure is only going to increase. Therefore, any law firm that wants to remain competitive will have to embrace cloud computing in the coming years. Although this type of technology requires a certain amount of initial investment, the long-term benefits far outweigh the costs. Staying afloat in an increasingly tough market isn’t easy. However, with the proper use of technology, any law firm can remain profitable.
