Fighting the financial flab – Core Legal’s tips on where you make and lose money
These are tricky times for many law firms and the number of business failures in the legal services sector is growing. When you’re running a business the costs can creep up when we’re not looking… (a little bit like putting on weight)… the next thing we know, we’re tied into contracts and weighed down by large overheads and we wonder how we got there!
Lisa Newton, CoreLegal founder member and founder of Boogles Ltd, a specialist bookkeeping service for solicitors and barristers offers her latest perspective on what can be the difference between profit and loss for law firms.
First make sure you review all contracts and terms and conditions at least once a year. Are you on the right tariff? (phone, utilities) Are you subscribed to products/services which you don’t actually use? (magazines, information sites etc).
It’s not about being dramatic and making people redundant, or counting the paperclips, but just periodically reviewing every single cost and asking yourself – do we really need it?
- Is it necessary? What value is it adding? Are we on the right purchasing level?
- And if we need it, can we negotiate a better deal? Is there an alternative?
Sometimes, you might not get a CHEAPER deal, but you might get more value. I had one client who had a telephone answering service for £50 per month, they got 30 calls answered, but when they swapped to an alternative service provider, they got 50 calls answered for the £50.
Look for things that add cost and not value.
As a solicitor, your time is your most precious asset. Are there some false economies happening in your business? Are you trying to do everything yourself e.g. answer the phones or divert to your mobile, when if you spent a few pounds, you’d actually be more productive, save yourself from worry and free up your time to do something better for your business ?
What could you outsource? For example are you using your Saturday afternoons to catch up with your paperwork? Why not let a bookkeeper take care of it, and give yourself a break?
Who could you have on your team who can help you look out for your best interests?
- Do you want to spend hours scouring the market for the best deal on ‘insurance’? Are you confident you’re getting good value for money? Could you get a quote (costs you nothing) and let that broker take the legwork from you?
- Check the credentials of your cashier – many cashiers are operating as one-man bands which means you can be heavily reliant on them. Test them to make sure that they really know what they are doing.
- The thing with running a small business is that it all hinges on you. And whilst you can operate on all four cylinders for a while, after some time, the pressure will start to take its toll.
So back to the weight loss analogy…
it’s not about being anorexic to shed the weight – this would be unhealthy. As would going to the gym for 3 hours a day and becoming a fitness freak… a business, which is fighting the flab, has the same issues. So starving it of resources and cutting off everything will cause difficulties. And going over the top with everything is taking it to the other extreme, so a levelled approach is best.
The important thing is that you just aim to keep your business lean and trim at all times.
Find out more about Boogles’ specialist bookkeeping services for solicitors at www.booglesltd.com or call 020 3371 8894
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