Simple Ways for Lawyers to Save Money

Every few months I take a look at what I’m spending on my business and make every attempt to cut down expenses.  What I find fascinating is that almost every time I revisit the issue there’s something I can reduce.  Which ticks me off because I could have been saving that money for probably the last 6-12 months and just missed it.

But this is a live and learn topic.  So I’ll share with you some of the top 3 ways to cut your operating costs:

1. Negotiate.  Call up every software provider, landlord, subscription provider, malpractice insurance carrier, etc. and ask them what can be done to reduce your price.  You’ll get those that say you can’t (in which case it’s time to start shopping around), those that will just drop your price because you asked (which of course you follow up with by saying “is the best you can do?”), and those that will be able to do something but will also reduce the level of service or quality of product they are providing (which is often ok depending on your needs).
2. Only pay for what you use.  This includes office space, paralegal services, etc.  There is no need to keep a full-time office or a full-time paralegal if you are not getting more out of them than you are paying.  Seriously consider an a-la-carte life.   Now, I do maintain a full-time office because I just can’t work at home (not for too long at least) but let’s just say I don’t NEED a full-time office and you probably don’t either.  Yes, it may cost a bit more if you rent it hourly or daily but you’ll never be wasting money.
3. Live cheaper!  You do not need the Armani suit or the Mercedes so stop trying to look rich while living poor.  Sure you may be leasing the car and expensing it through your practice.  Guess what, much cheaper to do that with a Honda.  If you are a connoisseur of cars then fine, spend money on what you love.  But if you’re just trying to keep up with the Jones’ (attorney Jones’ that is) stop.  No point in being sexy if you’re broke.

Are you being cheap?  Nah, just frugal.  I’m not asking you to stiff your waiters on a tip or start giving Christmas gifts from Job-Lot.  I’m just telling you to make your operation lean so that it runs minimally while you enjoy life maximally.

Happy Savings!

What Lawyers Can Learn From NetFlix

Two days ago in the WSJ I read a great article about Netflix and how the owners are preparing for the demise of DVDs.  Well, demise may be a bit of a strong word but they are well aware that snail mail is going the way of the typewriter and they will need to prepare and adapt their business to what modern technology holds (which as of now appears to be movies sent digitally directly to subscribers’ TVs).

So here’s a really quick summary of the article and how you can employ the same wisdom to your practice.  The first point was that they know that although they are cranking out cash with their current setup it’s not going to last forever (in fact they’ve predicted that in 4 years DVDs will be almost obsolete – not movie-watching, just the DVD part).  What elements of your practice are going to become obsolete or are going to require adaptation to keep up?  Are your clients going to still come into your office to see you, are they going to work with you remotely, does video integration into your current structure make sense.  Is paperwork that is currently being mailed going to be filed electronically (or more of it be filed electronically).  If the economy booms, what areas will take off.  If we have another recession what areas of law will take a hit.  Are you prepared for any or all of these possibilities.

The second part of the article made reference to how Netflix invested several million dollars to create a small box which would go on top of your TV and allow movies to be delivered directly to your TV.  Great idea except that they nixed the idea AFTER development and realized that they were in the movie business.  Not the gadget-development business.  Smart people.

So they outsourced the work to a company that does it best and they focused on what they do best.  Question is, “are you focusing on what you do best and outsourcing what you do not?”  Most lawyers don’t.  Not only do they practice areas of law that they have little or no knowledge about (aka the “general practitioner”) but they also handle their accounting, administrative duties, etc.

Focus people, focus.  We’ve been taught our entire lives to work on what we’re “weak” at.  Forget that.  Our weaknesses are infinite while are strenghts are limited.  Focus on what you do well and do it better.  Besides keeping you happier and sane it helps the bottom line by making sure you’re earning $300 an hour for what you do well versus $0 for making photocopies and sharpening pencils (which I can’t imagine is that hard but it’s certainly not paying you what you’re worth).

Lessons from NetFlix:

1) Be forward thinking by pulling your head out of the sand and seeing what is either forseeable (remember that great term from law school) or inevitable; and

2) Do what you do best and outsource everything else to others who do that stuff best.

Now take a break and watch a DVD while there’s still time!

Have You Negotiated Yet (come on, we’re lawyers – it’s what we do)

Everyone’s screaming recession and yes, EVEN attorneys are getting slammed.  But for those of us that run our own businesses there is no better time than NOW to revisit every bill that you’re paying.  I a few hours on the phone with my vendors/suppliers/etc. and ended up saving at least $400 a month.  That may not seem like a lot but for the way I run my practice it’s like pulling out buckets of water from a dry well.

In case math isn’t strong point that’s $4800 in savings every year.  Not a bad chunk of change to keep in your pocket.  So go ahead and call everyone from your cell phone provider to your malpractice carrier and scream RECESSION then ask for the best price they can give you.  When they respond, simply ask, “is that the best you can do?”  Good luck and happy recession!

Lingering Questions on How to Start Your Own Practice

I went through the questions of the attendees of my seminar in at Rutgers Camden Law School this past weekend and all could be sumarized in 3 questions:

1) How do I get clients?
2) How much does it cost to start”
3) How do I learn what to do, say, advise, etc.?

We covered most of them Saturday but I know there were some lingering questions so if there was anything left unanswered shoot me an email at sameer@lawfirmguru.com and I’ll get it up here.

The question of the bona-fide office is already up here.  One question that I saw was how do I afford health insurance.  I wish I had a simple answer to that.  My recommendation is that if you’re in good shape go for low monthly cost and high deductible.

Another question was asking about whether you need to take out a small-business loan.  Simple answer is no.  If you’re looking to build a legal empire maybe that’s not the best advice but if you are looking to start a solo practice with minimal hours and a solid six-figure income then you don’t need the loan (unless you don’t even have $1000).  In which case temp at Starbucks for a month and start your law practice the next.

Finally, the question of paperless office came up.  I addressed it in the seminar but I cannot emphasize how important a paperless office is if you are planning to lead the lifestyle I discussed.  Make this a staple of your practice from the start and I guarantee you’ll be thanking me a year from now.

Bona-Fide Office Rule (NJ)

So it seems that after this past weekend’s seminar “ethics” have got the best of many of my readers.  I’ve said it many times before but I’ll restate it, “ethics regulations for lawyers often make it difficult to run an efficient and effective business.”  With that said, I’m NOT in favor of breaking ethics regulations.  But at the same time I’m not one to play things overly safe.

Thanks Terry for sending me the following excerpt which covers the bona-fide office rule in NJ:

1:21-1. Who May Practice; Appearance in Court

• … no person shall practice law in this State unless that person … maintains a bona fide office for the practice of law. For the purpose of this section, a bona fide office is a place where clients are met, files are kept, the telephone is answered, mail is received and the attorney or a responsible person acting on the attorney’s behalf can be reached in person and by telephone during normal business hours to answer questions posed by the courts, clients or adversaries and to ensure that competent advice from the attorney can be obtained within a reasonable period of time.

The statute is reasonably self-explanatory so let’s not read more into it.  Keep files at your office, have a “RESPONSIBLE PERSON” running the gig (yes, a receptionist can be responsible), and respond with “competent” advice in a “reasonable” period of time.  That did not translate into “answer your phone at all times between 9am and 5pm Monday through Friday and give advice to your clients, etc. IMMEDIATELY.”

But even after getting this blurb the the questions were still rolling in.  Can I have my calls forwarded since it’s technically OUTSIDE my office?  How can I have a PO Box if mail is to be received at my office?  Etc., etc. etc.

Look, there’s a level of common sense invovled in running your practice and balancing the operations of your practice with ethics regulations.  Leave the “what if” questions to your clients (trust me, they’ll have more than enough).  You focus on running an ethical practice through the use of good common sense (and a knowledge of what you can and can’t do).  It’s not that hard to avoid lying, cheating and stealing.  That’s basaically what ethics regulations do.  They keep your clients safe.  Focus your attention on the same end goal and it’s going to be tough to be in violation.