Business advice roundup
Suggestions for cutting telecoms costs; and taking early advice on maintaining cash flow
Cut those telecoms costs
What can legal firms do to streamline their businesses and cut costs in order to survive the harder times ahead?
One of the biggest overheads firms can face is telecommunications. All office managers should review their telecoms packages, because serious cost savings can be made here.
Many legal firms in Scotland are still using providers who charge high rates for calls, broadband and line rental. This market is now increasingly competitive and there are major savings to be made for those who are savvy, up to 50% on broadband costs in some cases, for example.
I believe many legal firms have also been paying over the odds for new technologies such as the latest conference calling systems. From my experience a large majority of Scottish firms have been using companies which charge high rates to set up a conference call, then they are hit with further charges for additional services such as conference recording. The services they are using can also be quite convoluted, so they aren’t cost effective in the use of time either.
The fact is that there are lots of conference calling packages out there, and if firms take the initiative they can find some excellent rates available.
Of course the technology can be used effectively to cut other business overheads. Web conferencing, conference calling and video conferences for example, can all be used to cut the cost of travel. Firms don’t need to waste both billable time and money travelling to a meeting when the technology is there to attend meetings virtually.
Jim Callaghan is managing director of specialist telecoms firm Legal TX
Early advice essential
While technology can help streamline the business, getting the basics right is still essential. Sound financial management can mean the difference between success and failure in the credit crunch.
The epidemic of late payments is becoming a major issue particularly for the small firm. Maintaining a healthy cash flow is crucial. There are easily identifiable ways of achieving this through better billing, collection and general cash management. For example firms should carry out monthly reviews of all work in progress, targeting clients and matters where work in progress or debt exceeds agreed levels.
Firms which are feeling the financial strain can rest assured they are not on their own. There is plenty of support and advice out there, and basically businesses should be taking sensible precautions by looking at costs in detail.
Any companies which start to experience difficulties need to react quickly. Probably the first thing to do is get external advice, as it is often the outside party who can see the problem when those in the firm sometimes can’t see the wood for the trees.
Firms should revisit their business plan and have contingency plans in place, should the economic climate dictate. They should also re-assess their assets and identify where they could raise additional capital if required.
Undoubtedly the next few years will be a tough time for some legal sectors, but firms which are well managed and streamlined stand a good chance of weathering any downward cycle in the economy.
Esther Speksnijder is a partner at specialist business advisers and accountants SB&P, CAA