6 ways to cut office expenses

In these tough financial times there are probably many attorneys wishing that their bills for office expenses could be smaller. By making use of basic computer technology and some changes in work procedures, substantial cost savings can be made in the following areas without any lowering in fees or productivity:

• Printing paper and ink cartridges

• Postage

• Telephone bills

• Traveling costs

• Interest on bank overdrafts

• Bank charges on payments

While immediate savings of thousands of rands are possible in the above categories, medium term savings can also be made in the following areas:

• Salaries and remuneration

• Office and machine rentals

• Computer hardware and software

Let us deal with the immediate savings one by one:

1. Printing paper and ink cartridges

• Copies of all documents and letters should be saved in the electronic folder of each matter file and thus creating an almost paperless office.

• Documents (including reports in matrix format, invoices and statements of account) and letters must be emailed and not printed wherever possible.

• Letters and documents should be dictated, saved in folders, checked and rectified on screen after creation, and finally printed (or emailed) only once.

• Save statements of account to files and email them to clients, or write to a CD/DVD or place on an FTP site for clients to retrieve.

• Save all client reports to Excel or OpenOffice files, email them or write to CD/DVD. I would recommend saving them as PDF documents before sending. (An earlier article in Tech4Law explains how to do this using Word – and in fact OpenOffice 3 allows you to save the file as PDF as one of the default options.)

• Send SMS text messages to clients, debtors, purchasers, sellers, agents and others. These message types include short reports, requests, demands for payment, “thank you” notes, information and marketing.

2. Postage

   The cost of a letter which is posted is at least R3 per letter. Instead of printing and posting letters:

• Email letters and documents or place them on an FTP site for the client to retrieve.

• Make generous use of SMS text messages.

• If the above is not possible, then use the fax machine.

3. Telephone Bills

Where requests or queries by clients, debtors, agents, purchasers or sellers cannot be answered immediately, a promise is usually made to retrieve the information and to phone back. This practice is an enormous cost item. Enable all staff members to have access to a computer system with up to the minute financial and file information and to be able to report or answer enquiries immediately.

Replace phone calls with SMS messages as far as possible. These include: any short client communication or request, demand for payment in collection matters, short reports to interested parties. The typical SMS message should not cost more than 50c.

If longer communications are required, emails should be preferred instead of phone calls. Note that there are exceptional circumstances in which a telephone call is still the best means of communication.

4. Traveling costs

In the typical city or large town environment, candidate attorneys or messengers are used to deliver or fetch important documents. By arrangement with opponent attorneys or clients, court and other documents, accounts, reports and letters could be faxed or emailed.

5. Interest on bank overdrafts

Make use of creditors journals by transferring monies due to business creditors (in contrast to trust creditors) to the business account. In this way monies due to advocates, sheriffs, deed’s office, and tracing agents can be used on a continuous “roll over” basis to reduce overdrafts and save substantial interest. Thus if an advocate’s account is received for R10 000, that amount is journalised by a business entry from the client’s account to the advocate’s account. Running a trust transfer function will ensure that R10 000 is transferred from the client’s trust account to the advocate’s business account, provided that the client’s account contains a positive trust balance. (Running the trust transfer function every day is also a must for many other reasons.)

6. Bank charges on payments

Never issue a trust or business cheque unless absolutely unavoidable. Pay by electronic transfer because the bank charges are usually fixed at about R4 per payment while cheques cost up to R30.

I have dealt above only with direct and immediate savings which can be achieved. These methods will also save a great deal of employee time which will eventually result in an even greater saving. In addition, a weekly report by fee earner and fee earner group, setting out the expenses of each person in detail, is an important further tool to reduce costs. Implementing these changes will not only lower expenses but will also substantially increase productivity (and fees) per employee.

In a future article savings on salaries and remuneration, office and machine rentals, computers and computer software, as well as the effect of these measures on productivity and fees, will be discussed.

Contributed by:

Chris du Plessis
chrisdp@lexpro.co.za
MD of Lexpro Systems and Practicing Attorney in Pretoria
Tel: 012 341 1939