Getting a return from inevitable expenditure
Fitness trainer Jeanette Jenkins said –
“You get out what you put in. If you want more, give more”.
And sure, that can work where your fitness regime is concerned. Putting in the hours can result in increased fitness levels, stamina and moulding of muscles. But when it comes to the costs required to run a law firm, the most obvious question looming is – “exactly how much must we put in?”
It can leave anyone feeling a little exasperated, feeling a little hot under the collar and stressing about how to make ends meet.
This article isn’t really a “hack” on how to cut costs though. After all, some costs are – as the title says – inevitable. But the thing we want to drive home in this series is how you look at those inevitable costs. Because sometimes the costs we are required to spend can turn out to be investments in the future running of a well-oiled machine aka your legal practice.
Don’t believe us?
Let’s try these on for size, shall we?
Costs you will need to budget for
Before we get into the different costs a law firm will need to budget for, we want to point out the following excerpts from the article The Inevitability Of Legal Industry Change. Really? –
“Lawyers are a segment of an increasingly diverse, tech-enabled, data-backed, fit-for-customer/business purpose legal function.
C-Suite will propel General Counsel and their leadership teams to reimagine how, with whom, and with what tools and resources they meet the demands of their expanding role, remit, and portfolios. This will have a profound impact on the supply chain-especially law firms-and the entire legal ecosystem.”
Why is this excerpt important? Well – quite simply – everything we thought we knew about inevitable costs has kind of been turned on its head. Especially in the last few years.
After all, being able to work anywhere on a device as small as the palm of your hand (with a mobile apps such as the one now being offered by Legal Tech giant, AJS) – how, where and with whom we work has a whole new meaning. Because lawyers are not entirely chained to physical offices anymore. And the costs involved have shifted.
First and foremost – the most obvious (and inevitable) costs to run a law firm include where you practice from and who you practise with.
They are kind of unavoidable.
Where you practice from
Your location can either be a substantial or marginal cost. This – quite naturally – depends on how the property markets are trending, rental options available as well as where you would prefer to be located. Remember “location, location, location” comes with hefty price tags.
As a general rule, your office space will be one of your higher overhead costs. Especially if you choose a “traditional office” setup. But with the way the world is moving and with amazing offerings such as AJS Mobile, you can be smart about this. Because “traditional office setups” are not the order of the day. Anymore….
Shared office spaces have become extremely popular. And with so many variations to choose from – like the Regus Office Space, to the Workspace, Spaces Works, Cube Work Space, We Work, as well as Workshop 17 (to name only a few), there is something not only for everyone’s tastes but also for everyone’s realistic budgets.
There is also flexibility in that you can rent for shorter periods of time, with or without furniture, cleaning and internet all included (or not). Totally up to you, your needs, and your budget (which you need to be strict with).
Besides being able to choose your location smartly, being able to operate from home has another added advantage – the ability to practice from the comfort of your dining room table or dedicated home office space, for little to no overhead cost.
In addition, should you be working from home in a dedicated home office or according to SARS have “set aside a room to be occupied for the purpose of “trade”, you may be allowed to deduct certain expenses incurred in maintaining a home office, which will be calculated on a pro-rata basis: Provided that you meet the requirements as set out in the Income Tax Act 58 of 1962, section 11(a) read in conjunction with sections 23(b) and 23(m).
Resources like TaxTim can provide further insight into what is required (worthwhile taking a look at. We think).
And those little titbits spell tremendous savings in what has historically been seen as “inevitable costs” to run your practice.
By investing in and choosing the correct environment – that speaks to your needs – you can turn what is normally an expensive cost of running your business into one that is not only manageable but one that can prove to be collaborative – especially in shared workspaces – too.
And who knows who may require a contract or legal opinion (or two) in a collaborative space catering to many different businesses in various fields of specialisation. Networking here has immense potential to open up conversations with new and exciting clients. And the opportunities far surpass the expense of a shared space.
Just by choosing wisely, you can expand your client base turning what is an expected expense into one that can be seen as an investment in a bright future.
Who you practise with
It’s easy to think that we can all move mountains on our own (said in jest). But the truth is – that’s far from true. Try as we might, a helping hand (or four) is often required.
And those helping hands lead to discussions on employees, their respective salaries (and benefits) as well as budgets for professional expenses and training (which sometimes includes further education), conferences, and events.
“Bums on seats” so to speak, also leads to accounting requirements – someone to manage the payment of salaries, payments to the Legal Practice Council for training, payments to organisers of events and the like. All of that requires management – whether this is by a person or legal tech that can do this on behalf of a person.
This person vs legal tech debate will cover both the people you work with as well as the accounting obligations you are required to comply with. Now before we get into this, we know how this argument will play out – a legal tech company talking about replacing bums on seats with bots on tech, seems a little biased.
But given the expectations placed on businesses by both –
Ø staff (who have come to expect the support of technology in the advancement of their careers), and
Ø clients (who expect their law firms to be technologically advanced)
to be forward thinking, this can’t come as much of a surprise.
The bottom line? Lawyers need to be properly prepared to take on more work and produce results at a quicker pace for less cost (and less time required by staff to repeat menial tasks). This manner of thinking – we are sure you will ultimately agree – is not entirely unfounded.
Having Artificial Intelligence (AI) – as a tool to be utilised by law firms – take over certain roles that human lawyers and their support staff historically performed is happening – both where labour intensive tasks are concerned and especially where legal accounting is concerned.
This, in no way, means that the role of the human lawyer (or accounting department) in law firms has come to an end. Not at all. It just means that the automation of certain tasks will allow for time consuming, labour intensive work (that lawyers and administrative staff struggle with) to be managed by supportive legal tech. This isn’t only the next logical step but is also the way things are being done. As. We. Speak. Something we discussed – at length – in our article The Robot Lawyer.
We openly admit that as legal tech providers, we are advocates of the fact that some work can be taken away from immensely busy staff and allocated to legal technology that is there to support you.
So, what’s the solution?
Maximising on the services you offer – which can be done at a far quicker pace, for less money, whilst also managing your legal accounting requirements should be your goal. After all, performing more than what your competitors can and being less stressed whilst doing it should be the name of the game.
And that, quite simply involves the investment in the correct legal technology that can not only take over these labour-intensive tasks but can also handle all your legal accounting requirements – freeing you up to focus on the more skilled work and perhaps even expanding your business.
With AJS’ Legal Practice Management Software that provides all-in-one, web-based software, it includes full legal accounting and practice management tech, maximising your workflow and allowing you to focus on scaling your firm (whilst also automating low-priority tasks). It’s kind of a no-brainer.
Again, we are not saying replace people, we are just saying think about how you manage your expenses. The purpose of correctly utilised legal tech is primarily to unburden legal practitioners (and their support staff) of the mundane and unprofitable drudgery so that their valuable time can be focused on the purpose of their education expertise and speciality.
And sure, legal accounting is a necessary expense – because you can’t exactly do it by hand anymore (who has the time for that?). So, you do need to purchase a legal accounting package.
But if you invest a little more in your legal tech software by using AJS One, AJS Express, AJS Pro or AJS Enterprise (view these software options here), you not only get the legal accounting software, but a practice management and productivity package tailored to your needs. In addition, with all AJS software options, you have the added advantage of AJS Mobile at no added cost (provided you are on the latest AJS Version 4.5). And that would be smart thinking – spend a little more on software, get a whole host of supportive products and solutions. Have less “bums on seats” and more “valuable bums on seats”.
It’s all about perspective. Turning inevitable expenses into worthy investments.
Talking of perspective, while AJS does offer best in class legal tech, there are plenty of other products and services available in the legal tech market today. So instead of just taking our word for it, take a little time out to look what else is available, compare products and serve offerings. See what works best for you. It will be time well spent – especially in the long run.
But – as always – if you have any questions regarding the information we have set out above or if you have any queries relating to legal tech and how you can incorporate it into your practice, get-in-touch and let’s see how we can take your software solution from good to phenomenal. If you don’t have any software supporting your legal practice yet, it’s not a problem. We are here to help you from scratch too.
AJS – as always – has your back!