The last nine months have seen huge changes in our industry. Massive upheaval in the financial services sector has resulted in a funding restriction affecting almost every business. The new market is more competitive, with most clients under increased budgetary pressure and more likely to consider using other firms or exert pressure on their existing firms to lower rates. This pressure on revenue is in turn affecting the profitability of most firms, and the understandable reaction is to cut costs.
The highest costs for a law firm are generally salaries and office space. As it is difficult to significantly reduce the cost of office space in the short term, the cost-cutting spotlight has tended to fall on salaries. Most firms have reduced their business service teams, some for the first time in their history. Other areas of relatively high cost, such as IT, are also obvious targets. As a result, most law firm IT departments are now operating with fewer staff and lower budgets.
