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An estimated 5-minute read

20 money-saving tips for cash-strapped law firms

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rupees_medMany law firms would probably pay consultants an arm and a leg for this advice. Inspired by FoxMandal Delhi's recent cash flow woes, regular Legally India commenter Legal Dodo posted an interesting list for law firms to save money. For free!

While Legal Dodo is happy to admit that some of these points are obvious and may not necessarily apply to every law firm, his/her points are nevertheless worth thinking about:

"Here are some random thoughts/tips on cost cutting. They are in no particular order of priority and may not necessarily apply in every situation. Some of them are borne out of experience. Of course - some are very obvious.

1) Assess all the infrastructure you are using - especially the real property. Do you own excess space? Have you leased excess space? If yes, ensure that all your staff work together. Keep the excess space unoccupied. This helps save electricity costs. If you use air-conditioning - believe me - the savings can be substantial.

2) In case you are paying an above average rent for the space you are
occupying, negotiate with your landlord for a downward revision of the rent. After the recent global meltdown, there are hundreds of office spaces lying vacant.
Your landlord will be put on the defensive and is likely to accede to your request, especially if you threaten to vacate.

3) Alternatively, negotiate for a right to sub-let. If you have excess space and your growth plans are not as aggressive as they were when you first leased your office space, short-term sub-letting makes a lot of sense.

4) Is your office located on a main road in a prime business location? If yes - then reconsider whether it makes sense continuing from there. For a law firm, such a location offers little advantage. Consider shifting into a suburb or into an office off the main road. Rents are considerably lesser in these areas. Perhaps, your staff's efficiency may also increase.

4) Do you have multiple telephone connections (landlines) or multiple
Internet connections? If so, it makes sense to cut down on them.

5) If your office has good ventilation and natural lighting, consider making optimum use of the natural air and light. This could help cut down your electricity consumption.

6) Cut down on your marketing and promotional spending. Avoid sponsoring seminars, conferences, moot-courts, local-events and/or business-round-tables.
In my experience, these are a colossal waste of time and money.

7) Similarly, stop attending such seminars, conferences or other events, especially if you have to pay through your nose for it. If you are invited, and do not want to miss out on the networking opportunity, offer to speak at the conference. Often, organizers are short of speakers. If so, they will be more than happy to
get a free speaker and perhaps may also give you a few free delegate passes, which you can share with your colleagues.

8) Avoid wasteful travel. If you have to travel, then do so and stay economically. Staying in five star hotels and commuting in expensive chauffeur driven cars burn a significant hole in your pocket. You can stay just as comfortably in good service apartments and save on transport by using city taxi. Avoid overnight stay, if possible.

9) Avoid expensive lunches/outings and/or throwing lavish parties.

10) Cut down on the freebies that you give to your staff. Do they have free telephones? Are they provided with expensive cars? Impose a limit on their telephone usage. Consider car pooling for the staff.

11) Cut down on your excess security and maintenance staff. Keep the minimum staff required to ensure security and cleanliness of the office. Invariably, these employees are sourced from a security or house keeping agency. Therefore, you are not firing anyone, and even better, they are not losing their jobs when you relieve the security and maintenance personnel of their duties.

12) Cut down on unnecessary subscriptions, especially foreign publications.

13) Hire interns, instead of fresh employees, for doing routine work or carrying out support functions.

14) Use Skype or e-mail to communicate and reduce telephone costs. Reduce stationary usage by printing only if you have to. Use both sides of paper while printing. For rough drafts, you can use the printer option to print multiple pages per sheet.

15) Cut down on giving corporate gifts.

16) Use the courier service only for important documents. For routine mails, use the postal service. It's much cheaper.

17) This is the most contentious point. Chop dead wood. In other words, identify the non performing staff and encourage them to leave. Almost every organization lands up making hiring mistakes and taking on people whom it should never have hired. Employees with an "entitlement culture," i.e. those who cannot look beyond their own nose, are the worst people to have around at any time, more so during an economic crisis. Such employees shirk work, avoid responsibility and mysteriously develop high fever or a severe tummy ache whenever a complex assignment crops up. They stop looking for work the moment they are employed.

Once employed, they are the first to approach the HR Department to ascertain how many sick leaves, casual leaves, paid leaves and national holidays they are entitled to. They expect hefty pay hikes every six months and fudge their time/work records to show how well they are performing. While at "work," they spend time chatting, surfing the net, taking long coffee and smoking breaks and complain about just anything they can complain about. Invariably, whatever little work they do requires to be entirely redone. Such employees are a big nuisance and extremely demoralizing to have around. It's a big mistake to consider them as "family" and put up with them. Invariably, they go around bad-mouthing the organization at every given opportunity. Such employees are perhaps the greatest liability any organization can have, especially a service oriented organization like a law firm, whose human capital is its greatest asset. It's wise to be diplomatic while doing away with such employees. Give them glowing recommendation letters, if necessary. Words are free. Won't you be glad that your worst performer lands up joining your rival?

As I mentioned earlier, these are just random thoughts. Constructive criticism welcome. Feel free to add to the list.

Legal Dodo."

And as requested, I'd like to add a couple of extra points to this very comprehensive list:

18) Institute reasonable pay-cuts. A lot less painful that outright lay-offs and a sensible option for unsustainable salaries that were pegged after blind competition in a boom market.

19) Introduce a part-time working option for employees who are interested for personal or other reasons. Someone on a four-day week will save a firm 20 per cent and if the employee is good they could end up managing their time more efficiently than a full-time employee. On the flipside, it can be a headache to manage from an HR and client service-level perspective.

20) Consider outsourcing your back-office operations (which is perhaps my most contentious point). Clifford Chance, for example, was targeting £8m (around Rs 60 crore) annual cost savings with its offshoring of document production (and now also paralegal fee-earners) to Gurgaon.

Please do add your ideas, suggestions and comments.

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