If your firm is seeking ways to cut costs, take a look around the office. Next to salaries, real estate typically is the largest expense item on a law firm’s income statement, making it a critical target for cost reduction efforts.
Many firms spend more than they should on real estate because they allocate space inefficiently. They maintain large individual offices and multiple meeting rooms even as technology and changing work habits make such spaces unnecessary. Worse, some firms allow hundreds of square feet to sit vacant following attrition or downsizing, just in case space is needed in the future.
If your firm is guilty of such practices, it is time to take a hard look at your office space and determine what you really need and what you could do without. For example:
- Do your partners really need 300-square-foot offices or would they be willing to downsize to 200?
- Could lawyers who work part-time or have flexible hours share offices with other flex-timers?
- Do you have work or project rooms that have become an extension of your storage areas?
- Do you use all of your conference rooms and meeting spaces?
- Are you wasting valuable space to store paper records that could be digitized?
If occupying a smaller space is feasible, compare potential savings with the cost of moving, including, if applicable, the early termination of your lease. Although attorneys may initially object to the idea of losing their spacious offices and other perks associated with a larger footprint, the cost savings could change their minds. After all, moving to a smaller space can free up funds to provide higher compensation.
Small and Standardized
Savings come not only from having smaller offices but also from standardizing offices. If, for example, your partner and associate offices are the same size, your firm can probably spend less money on customized furniture. Standardization also reduces the amount of time and money spent on changing offices.
You might also consider a “hotel” concept, in which associates are not assigned to permanent offices. Instead, associates roll two-drawer file cabinets with necessary files into standardized workstations.
Finally, do not forget to look at telecommuting options. These days, it may be easy to set up secure and reliable network access and teleconferencing capabilities for attorneys and support staff working from home.
Even if you prefer that everyone work onsite, technology can likely free up some office space. Just look for the savings hiding in plain sight.
If you are looking to cut costs at your firm through changes in real estate or other means, contact Kal Shiner at 312.670.7444.