One of the biggest issues for solo attorneys, especially new ones, is figuring out how to balance the books and keep overhead costs low. Here are six ways to reduce costs and keep your firm profitable.
Be a Minimalist
I’ve been running my own firm for nearly four years, and I’ve seen countless other firms open and close within that time frame.
The number one mistake these firms make is adding overhead that’s not necessary. Typically, a new solo gets a really nice (and expensive) office in a prime location without having any business. Or a new solo hires an administrative assistant before they can really afford one.
When you start your practice, you should worry about two things besides taking care of your clients: keeping the lights on and paying yourself consistently.
At the start of your practice, you will probably spend a lot of time sitting in your office, waiting, and hoping that the phone will ring. There is no need to pay someone else to sit there with you. And do not assume that a good month or two means you have hit the jackpot and are ready for the big time. Wait until you have had a string of good months before you deciding to upgrade your office or hire a part-time assistant.
Stop Killing Trees
Running a paperless office will save you money.
You can rent a smaller office because you don’t need extra storage space for files. Generally speaking, less space means lower rent. And instead of having a big office in the suburbs, you can pay the same for a smaller office in a prime location.
You will also save money on paper and postage. Mailing briefs, client information, and bills gets more and more expensive every year. Fax service is usually perfectly acceptable, which mean you can use an e-fax services. When I serve documents in state court, I fax it and email a courtesy copy. That saves money on postage and paper. Plus, I don’t have to walk to the mailbox.
Another advantage of running a paperless firm is that you can work remotely. I don’t need to come into my office to pick up the Smith file — everything is scanned and stored on my hard drive. I also don’t need to come into my office because I need to print and mail something.
The only caveat here is that you will need to spend around $425 up front to buy a ScanSnap, but that cost will pay for itself within a matter of months with the money you will save elsewhere.
Find Alternative Research Sources
I admit I miss the ease and utility of Westlaw. At the same time, I do not have any desire to pay the rates that Westlaw charges.
Through my state bar association, I have access to Fastcase. It is not as robust as Westlaw, but it certainly gets the job done. Google Scholar, a free option, also appears to be getting better by the day. If you practice in a niche area, your bar association may offer a free service to deliver recent opinions via email. That will help you stay on top of the most recent case law in your practice area.
Check around to see what other options are available to you, especially if your practice is not motion-practice heavy. Chances are good you can survive without paying a ton for research. And if you find yourself in a pinch, you can always use the public access terminal at the law library.
Tackle Your Own Administrative Tasks
I’m not particular fond of doing my own bookkeeping, opening and closing files, running to the bank, etc. At the same time, if I hired someone else to do these tedious tasks, I’d have to pay them, which is a huge increase in overhead. Quite frankly, some months my firm could afford that expense, and other months it would be a problem. Until I get to the point where the firm is overflowing with money (wishful thinking), I’m not hiring anyone.1
On the plus side, tackling my own administrative tasks means I know exactly how my firm’s finances look month-to-month. Knowing this about my firm helps me adjust my workflow and overheard as needed.
For example, if the trust account is getting low, then it’s time to revisit clients on retainer and make sure they refresh their retainers. If the cases need to be closed, then I need to spend time closing those files and pound the pavement for some new clients.
Answer Your Own Phone
I have always been a big proponent of answering your own phone. After using Call Ruby for the majority of this year, I’ll probably go back to answering my own calls for these reasons:
- It’s not cheap to pay someone else to answer your phone.
- If you are using a virtual answering service, they will not do much more than take a message or provide your voicemail. If the caller is a potential client, you still have to talk to them.
- In my practice area, clients want to talk to an attorney ASAP. They might leave a message with an answering service or on your voicemail, but by the time you call them back they may have found someone else. It doesn’t make sense to pay someone to take messages for potential clients who will always remain potential clients.
- If your marketing is well-targeted, you should want to talk to every potential client who calls you because you are the best person to help them. You are also in the best position to evaluate if they are a good client with a good case. Having someone else do that will save time in the short run, but will cost you time and money in the long run.
Write Your Own Website Content
A great way to plant a seed about your services before you even meet your next client, is to write great website content.
If you outsource someone else to write your copy, it’s not the same. One, you are paying for it. And if you’re not paying much, it’s probably not very good content. Two, go look at a few law firm websites, and I bet you can tell who writes their own copy. From what I’ve heard from prospective clients, they can tell too. Outsourced material (especially stuff written by marketing/social media “experts”) reads like a sales pitch. If you write it yourself, it will come across like you know what you are doing.
Running your own solo firm comes with numerous benefits and lots of new responsibilities. Make sure you can keep your solo practice running until it succeeds by keeping costs down and overhead low.
Featured image: “Business man drawing graph of profit compare with cost” from Shutterstock.
I do hire outside help to prepare my taxes. But I do my own accounting and bookkeeping. It can get annoying. A couple of times a year I have to come in on a Saturday morning for a few hours to do billing and balance the books. ↩