5 Quick Ways to Cut Cost in Your Law Firm

That the COVID-19 pandemic is wreaking havoc on the economy and impacting the legal industry is well-established by now. 

Leaders are making hard financial decisions to stay in operation. These decisions are all the more challenging because no one expected to be making them three months ago. But while some considerations are painful, others represent some bigger shifts in the legal industry that have been some time in coming. 


Reviewing your budget isn’t a cost-cutting measure – your budget is what it is. But you can’t effectively cut costs without really knowing your budget. 

So if it’s been a while, get reacquainted. You may have a vague idea of how it’s been doing, especially if others have been crunching the numbers for you. But if you’re a decision-maker, you really need to know what’s going with your income and expenses. 

The goal here should be right-sizing your operations to fit your clients’ needs, keep your employees working, and keep your firm moving forward. To get a good sense of what a right-sized budget looks like for your firm now is a good time to talk to your accountant and ask for help with forecasting. 

Salaries and benefits

We want to fairly compensate staff for their hard work and in a time of economic hardship, no one wants to reduce their employees’ income. However, adjusting salaries and benefits is at the forefront of cost-cutting measures. As of May 15, 69 Am Law 200 law firms have announced salary cuts

Salaries are one of the biggest expenses for law firms. If your budget projections require it, this is a key area to consider cutting costs. A few notes on salary reductions:

  • Link salary reductions to your long-term business needs such as changes in customer needs and cash flow
  • Regularly review salaries and adjustments as the economic impacts of COVID-19 continue to unfold

Adjusting benefits can be another major cost-saving measure, but it’s also one to approach with caution. With the ongoing public health crisis, drastically cutting staples like health insurance may be a bad strategy. Instead, look for ways to give employees options, like offering basic plans that employees can upgrade. 

Also, thoroughly review your benefits packages for perks that are underused by employees. If you’ve offered subsidized parking or reimbursed commuting expenses, those can easily be trimmed without stepping on any toes. 

Scope of work

Are your practice areas tailored to meet client needs right now? 

Do you have remote service options in place? 

Have you created pricing structures to allow for lower-cost services? 

Do you have payment structures to make paying outstanding bills easier?

While these questions alone won’t cut your costs, you should be asking yourself them because the answers determine how you’re able to bring in income. 

Decision-makers should keep in mind that adjusting services, offering payment plans, and offering more remote services may decrease the amount brought in per client, but they’ll also be more easily afforded by clients. Increasing the volume of cases, even at a lower price point, can be a boon to firms whose bottom line is struggling. 


COVID-19 has upended the standard objections to the effectiveness of remote work in the legal industry. It is, in fact, quite possible to have a functioning remote firm. For those managing a firm’s expenses, one of the major upshots is a big cost saving.

“One of the obvious plusses is decreasing real estate expenses, which is helpful in a highly competitive environment where enhanced financial performances give firms a leg up in recruiting,” comments Kent Zimmermann, a consultant at Zeughauser Group.

Firms that pivot to a long-term work-from-home plan for staff stand to save significant amounts on overhead. Office rent, mortgage, property management costs, furnishings, utilities, these all add up. Even if you know you’ll need space for attorney-client interactions eventually, you can still cut costs by downsizing to an office that focuses on the needs of clients rather than employees.


Think of technology overhead not as a cost-cutting tool, but rather an expense-maximizing one. In a remote work situation, there’s no need for expensive servers and in-office networks, outdated telecom systems, and powerful-but-immoveable printer-scanners. 

Instead, you can replace them with cloud-based systems for nearly everything: document storage and sharing; telephone and email services; and practice management systems. (And speaking of printer-scanners? Now is the perfect time to go paperless with app-based scanning and e-sign options so widely available.)

Legal technology consultant Zach Abramowitz says firms can “future-proof” their firms by adopting a new approach to technology, embracing collaborative practice management tools with robust capabilities.

“I do think it’s true that for better or for worse, legal departments are thinking that ‘OK, maybe this is the time to get a little more tech-dependent,’” Abramowitz says.

Administrative staffing

The administrative staff of a law firm keeps the work moving along in a successful law firm. However, if you’re reimagining your overhead costs, this area should be reconsidered, especially if you’re switching to remote work. Admin needs such as copying, scanning, and word processing will shift if you’re working from home. IT support won’t look the same if you’re running cloud-based systems. 

So what does cost-cutting look like? You should start by recalibrating job descriptions and evaluating who does what right now. If you need to bring on administrative staff, consider outsourcing tasks such as billing. 

Cutting costs can be a struggle, especially when it’s an unexpected need. But by carefully reviewing your budget and your needs, your firm can better position itself to navigate challenges. And while some decisions may be painful to make, others may lead to long-term benefits for law firms. 

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