While open to change, budgets are an excellent way to anticipate costs and reduce the risk of overspending. However, there may come a time when it’s necessary to cut down on the budget, whether due to reduced income or to meet the goal of becoming more profitable.
Wages and benefits
You need employees and they need benefits. However, this is most likely the most expensive line item in your budget. There are a number of ways to reduce costs in this category. If you currently have a full staff, look at the American Bar Association’s annual salary list to see if what you’re offering is in line with industry and regional standards or if your salaries are too high.
For administrative positions, consider bringing on independent contractors or part-time employees for new hires. This move can right-size your organization and avoid thousands of dollars in wages and benefits.
Overhead is a big category, encompassing rent/mortgage, utilities, office expenses, equipment, and other ongoing expenses. Overhead is likely your second biggest expense. One of the easiest ways to reduce overhead is to transition to a more permanent work-from-home arrangement for your employees.
Even if you need to maintain a smaller meeting space for client meetings and other face-to-face activities, you’ll save big dollars moving to a smaller office with less cost in utilities.
Professional associations and memberships
Is your team getting the most out of the professional memberships and associations that your firm provides access to? It’s often assumed that law firms pay bar membership fees and other professional development costs like CLE. It’s a valuable perk to offer. However, if you’re truly looking to pinch pennies to stay afloat, this can be an area that warrants consideration.
Marketing and advertising
Marketing and advertising are essential for business development. Without these services, it can be a struggle to generate leads, interest, and brand recognition. However, not all marketing and advertising is equal. If you’re marketing without a strategy, you’re throwing money down the drain. Focus on the strategies and tactics that are most likely to deliver a return on your investment.
These vary by practice area and region. If you’re an agriculture law attorney in Oklahoma, you likely don’t need a SnapChat account, but a strong outreach program could deliver big results. If you’re an attorney specializing in international intellectual property, face-to-face time might not be important but an effective email marketing program could help you meet your goals.
In short, save money on marketing by doing what makes sense for you, not what everyone else is doing.
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