Business Startup

Staying Lean and Saving Green in a Down Economy

I recently read an article detailing the impact of the market downturn on U.S. law firms. Relying heavily on data presented by the Hildebrandt/Citi Private Bank 2012 Client Advisory, the article discussed the steady—if not drastic—decline in revenue, demand, and “realization” since September 2008. One of the most alarming statistics was the decline in the collected realization rate against the standard, i.e. the percentage of work performed at a particular firm’s standard rates that is actually collected from clients. It reveals that U.S. law firms are collecting less than 85 cents on the dollar, essentially an industry-wide client discount of 15% on every transaction. The effects of this decline include downsizing, lack of hiring, and significant pricing pressures.

So what can we do to sustain our practice through these tough economic times? I’ve put together a number of tips, many of which we employ in our practice, to reduce your overhead expenses and maximize efficiency in your practice (note: these tips are directed generally to small firms and solos, but most apply to larger firms as well). By reducing your overhead and maximizing your efficiency, both you and your clients can save green. It’s a win-win situation.

Outsource only what makes sense
So many law firms outsource every “non-lawyer service,” e.g. administrative work, bookkeeping, marketing, etc., instead of performing the tasks in-house. Not only is it more expensive (in many cases), in the long run it can be less efficient. Why is it less efficient? When you delegate tasks to other people you must first explain what the task is, how you want it performed, and oversee its implementation. The time spent hiring, explaining, and reviewing the final product is often more than the time it would’ve taken you to do it yourself. Plus, when you do it yourself, you learn how things work “behind the scenes” in your law firm. You may recognize growth opportunities and cost savings more readily if you spend time dealing with the less glamorous administrative tasks. You may also glean insight into how your marketing practices are actually paying off, and how you can improve them, by spending time focusing on these issues yourself. You may even run into issues that your clients are grappling with, and by relating a personal experience you can better connect with your clients. Still, there are some tasks better left to specialists, such as taxes, which can be a nightmare depending on your business structure. There is also a point at which these tasks will begin to cost more than they are worth if you must sacrifice“full price” paid work. However, for many lawyers, the money saved taking care of the task internally is worth the time spent doing it.

Answer your own phone and get rid of your fax machine
It’s no longer necessary to hire full-time staff to answer phones at your office. Clients won’t be concerned that you, not a receptionist, answer your phone. Instead, most will appreciate the fact that they can call and talk to you directly. It’s like when you call a company’s customer service line: would you rather talk to someone who can direct you to another person who is able to answer your questions, or would you like to connect directly to the person who is able to answer your questions?

The number of phone service options currently available is overwhelming. Deciding what company and phone service to use in your law firm can be difficult.  First off, you don’t need a land line. The most affordable option is to use your personal cell phone and field your own calls. Most of us would rather not hand out our personal cell phone number to every client that walks in our door. Luckily, you can use your personal cell phone, but give clients a separate business phone number. Voice over Internet Protocol (VOIP) service—which refers to communication services, i.e. voice, fax, and text messaging that is transmitted over the Internet rather the standard telephone network—allows you to receive calls on your cell phone. You do not have to sacrifice the benefits of a receptionist, as most services allow you to screen calls, direct calls to certain messages, and turn off the forward to your cell phone based on your preferences. You can also set the service to forward to a traditional phone (similar to the one sitting on your desk) if you choose. The major advantage is that you will save a ton of money, as most of the VoIP services currently available are much cheaper than a standard phone service.

Most VoIP providers offer fax services as well. Using these services, you can send faxes via the Internet to traditional fax machines and email addresses, and you can receive faxes at your email inbox. Not only is it more convenient, it saves you the expense of buying a fax machine, paying for a telephone line for your fax machine, maintaining the machine and dealing with it went it malfunctions, and you’ll cut down the amount of paper you use in your practice, which reduces your office expenses and your carbon footprint.

Don’t break the bank advertising
There are a number of low-cost options for legal marketing. One of the cheapest ways to gain exposure is to develop a quality website. Depending on your technological know-how, this may require working with a website developer, many of which are affordable and can build you a basic quality website in very little time. How often do you pick up the phone book, flip to the yellow pages, and look for a restaurant? The same thing applies to people looking for a lawyer to work with. For most people under the age 60, the first place to look for a service provider is the Internet. So focus your marketing efforts on developing a significant online presence. The best place to start is with your website. It may take small tweaks here and there to optimize your keywords, or it may take a complete overhaul of your current site. Either way, the major advantage is that you will increase your firm’s exposure to, literally, millions of people online, and the operating expenses of maintaining the site are low.

Social media can be utilized for much more than posting pictures to your Facebook page or updating your status to let your friends know you’re at the Seahawks game (or Sonics, we’ve heard the rumors also). In fact, you can use social media to connect with potential clients and gain exposure for you and your firm. Through sites like, you can answer legal questions and get your name out there simply by being helpful. Most social networks are free to join, which means that if you land one client by using the site, it has more than paid for hour or so you put into creating your profile.

Another low-cost (or no cost) marketing option is good old-fashioned networking. Find a group, or make your own, that fits with your goals as a lawyer. If you work with businesses, then surround yourself with other professionals and service providers who work with businesses. One advantage is that you will have a network of individuals that you can send your clients to if they need help or advice on a specific topic that is outside your comfort area. Another advantage is that you will soon build a large referral network, which will lead to increased business and exposure for your law firm. The best part is that many networking groups are free, and the best ones are fun as well as rewarding. One easy way to start networking is to join a section of the KCBA or WSBA that is related to your practice.

Challenge traditional notions of operating a law firm
Many of the ideas I’ve presented in this article point to the fact that running a law firm according to traditional notions isn’t the most cost-effective or efficient way anymore. With so many affordable cloud-based services and software available, you can run a law firm with very little monthly overhead. You can run an office without any full-time staff. And answering your business phone line really isn’t that bad, and it won’t affect your credibility.

As I noted, these tips are directed at small firms and solo practitioners. While the economy remains far from stable, it’s important that we continue to explore low-cost options for running our law firms. Reducing your overhead can translate to saving money for both you and your clients.


Gavin Johnson

Gavin enjoys craft beer and is learning the art of brewing.

146 N Canal Street, Suite 350   |