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All too often law firms manage their expenses and collections the old fashioned way: “We do it the way we have always done it.” Firms stick with the status quo and lose sight of the fact that they aren’t really managing their cash flow at all. As chief operating officer at Chicago-based Butler Rubin Saltarelli & Boyd, a 32-attorney litigation boutique, I am ultimately responsible for keeping operations lean. Here are five ways to immediately cut costs (and thereby increase profits), which we have implemented and found to be valuable. 1. DON’T ADVANCE COSTS TO CLIENTS Many clients have been spoiled — they expect firms to advance costs on their behalf for witness fees, travel, deposition transcripts, conference calls, and the like. Unfortunately, a firm that advances substantial costs can be inviting a cash flow dilemma and also a billing dilemma. Often, by the time the court reporter or travel bill is received and paid by the firm, and then added to a client bill, several months have passed. The client may not remember what the trip or fee was for, and the matter may have closed by the time the costs get passed on to the client. Such delays dramatically decrease the chance of the firm’s collecting on the bill. Fortunately, clients are often more than willing to have those expenses billed directly to them. In fact, clients often have preferred relationships with vendors, such as copy services, and can arrange for a better rate through direct billing than your law firm can. Bottom line: Take a few extra minutes to ask the client if the vendors can bill them directly for large out-of-pocket costs. 2. COMPETITIVE BIDDING FOR SUPPLIES AND SERVICES To add real dollars to your bottom line, do some competitive bidding for office service providers. For instance, when it comes to searching for cost-effective office supplies, law firms often get lazy: They like to use the same stationery supplier, same office supplies provider and the same file storage service that they have always used. A common sentiment among the staff is, “We’ve used them for so long and they’re so nice.” Why change? Well, being nice counts for something, but it is not what’s most important: That would be cost. Luckily when the company that provides your firm with stationery or coffee is confronted with competitive bids, that company inevitably reduces its rates. If a supplier thinks that it will lose your business, you will, without question, get your prices reduced and your service level improved. 3. HIRE YOUR OWN CLIPPING SERVICE PERSONNEL Most firms want to keep abreast of client news and case or legislative developments so that they can be among the first to know about events that affect their practice or clients’ interests. But it can cost you lots to hire a clipping business to do the research. As an alternative, do what my own firm did: Find a bright individual who has good Internet skills and pay him or her to act as your firm’s clipping service. A perfect candidate would be a law student or college graduate looking for some extra income. This person will gain a better understanding of the type of articles you want — and be a lot less expensive — than a bureaucratic clipping agency. 4. HOLD SMOKING CESSATION AND WEIGHT LOSS PROGRAMS ON-SITE Many local hospitals provide inexpensive or even free group sessions to help your personnel quit smoking or lose weight. My firm used a Northwestern University Hospital program that was able to prescribe smoking cessation medication to our employees. The facilitator came to our offices at a set time every week. The support group atmosphere, combined with the expertise of the trained facilitator, resulted in a 60 percent reduction in the number of our smokers. This is a huge cost savings. Time formerly spent in taking smoking breaks is saved. Health costs are saved. Lost time for absenteeism is saved. Of course, most importantly, you are helping to save lives. 5. DON’T AUTOMATICALLY RENEW SUBSCRIPTIONS Often, legal publishers issue book updates and charge for them later — with invoices that merely state that they’ve sent an update and it has “been received.” Keeping track of updates can be tricky because sometimes the updates go to the lawyer while the bill goes to the finance department. Affirmatively inquire of the lawyers whether they really need the update of a text. If he or she refers to that publication just once a year, then renewal is probably not necessary. You’ll save thousands of dollars. Audrey Rubin is chief operating officer of Chicago-based Butler Rubin Saltarelli & Boyd. Contact her at [email protected].

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