Law Society highlights need for effective cost management

20 January 2011

The Law Society has signalled managing the cost of staff, premises and technology as a critical success factor for law firms in 2011.  How can a firm manage its major cost areas flexibly and responsibly yet still be in a position to take advantage of opportunities as they arise?

The Law Society has begun 2011 by headlining independent reports on the continuing financial pressures on the legal sector in its first two editions of the Gazette.

The majority of respondents to WinMarks network of managing partners annual survey are expecting "stagnation or worse for the UK economy" with increasing costs, notably in insurance, staff, technology and via bad debts.

At the same time, a report from consultants Jomati entitled New Frontiers: Law Firms in 2020 highlights the needs for firms to be more flexible if they are to cope with the boom-bust of global markets concluding that firms of all sizes need to look to switch their fixed cost base to a more variable model, which avoids the burden of unrecoverable cost should transactional volumes decline.

John Thomas, CEO of LawNet, the leading law firm network, agrees with the reports and believes law firms need to take a fresh look at themselves.  "For most law firms, there is a pressing need to take a creative look at their internal structure and cost base.  Outsourcing non-legal processes should be a no-brainer for law firms.  With a more open mind and effective use of technology, there are opportunities to make significant savings that can be reinvested in business development".

Richard Bate, General Manager of Voicepath concurs, "The adoption of the Voicepath transcription service allows firms to change their support staff costs to become both lower and variable, more accurately reflecting activity within the firm and avoiding additional employment costs such as national insurance, which is set to increase from April 2011.  It also enables firms to increase their fee earner:support staff ratio with resultant benefits in office cost and utilisation".

He adds, "Voicepath clients see tangible financial benefits within a few months of adopting our service.  A 40 fee earner firm in the Home Counties has recently calculated that we saved them £500,000 in the first year of using the service.  With all our work carried out in the UK, clients get financial flexibility whilst retaining access to trained legal expertise".

Thomas has seen it in action at a number of the LawNet member firms, "the LawNet firms using Voicepath have made significant savings, leading of course, to improved profit margins".

Click on the highlighted links for more information on the range of transcription services offered by Voicepath and to set up a free trial.