By far the most common reason for companies failing is a lack of cash flow – typically caused by excess overheads eating into profits. Every firm goes through lean times once in a while, unfortunately resulting in inevitable cutbacks. Very often, the first expense to get shelved is the marketing budget.
Of course, sound logic would suggest spending on marketing should be the last thing to be cut (after all, it’s the primary way businesses attract new work). But a company’s marketing and advertising budget is often viewed as an extra and an unnecessary cost when compared to other outgoings.
The importance of marketing your legal practice
Marketing doesn’t just drive sales. It also increases awareness of your business in the minds of your clients (potential and existing) and often helps build trust with your customers. Successful marketing is particularly important for legal firms. In an industry where there are so many competitors – many offering similar core services to your own – good marketing can mean the difference between landing a contract and not. Marketing also allows you to identify your target client profile and get a better idea of your sector.
Here are just some of the ways you can help reduce your company overhead to allow for a bigger marketing budget.
Keep a close handle on your Return on Investment (ROI)
It might sound obvious but keeping a close eye on the things your company spends money on is one of the greatest ways to reduce your operating costs and maximize your Return on Investment (ROI).
Anything that costs your company money is a drain on profit. Studying your ROI gives you the best opportunity to examine how effective your spending is – and, more importantly, assess the real benefits of your outgoings.
For example, if you run an advertising campaign, check to see the impact it’s had on your income in the following days and weeks to assess whether it was money well-spent. If you don’t notice a spike or other significant benefit, chances are it wasn’t worth the money.
Allow remote working and embrace cloud computing
The recent Coronavirus pandemic has been a huge wake-up call for many companies that were forced into allowing staff to work remotely. The technology for remote or home-working has existed for some time but, with today’s vastly improved connection speeds and the huge number of mobile devices we use on a day-to-day basis, it’s now more viable than ever.
Through lockdown, many companies found their staff worked at least as productively – and in many cases, more industriously – than being in the typical nine-to-five office environment.
Moving to a remote working model will allow you to drastically reduce your overhead in several ways:
Install legal case management software
Artificial Intelligence (AI) is changing the way the world works and automating many previously labor-intensive tasks. Legal case management software won’t just allow you to reduce the workload of your employees, it will also enable you to assign them to more productive tasks – work that makes you money rather than drains resources.
These days, there is a huge range of applications produced by legal software companies, ranging from conveyancing case management programs to automated client contact solutions. Using legal software will streamline your operations, help you stay on top of cases and free up time.
Evaluate the effectiveness of management and whether you need it
Companies often just assume management is a necessity for helping keep things ticking over but in many cases extra tiers of managers are unnecessary. Look at your staff’s performance over an extended period – say, a year - and check whether their roles have changed in any significant way. If your employees have been performing primarily the same function for a year or more, there is a significant chance they don’t require a manager to oversee them. They will likely already be familiar enough with their responsibilities to work alone.
Consider moving to a four-day working week
Recent evidence suggests a reduced working week isn’t just beneficial for employers and cutting costs – it very often results in improved productivity on the part of employees. Think about whether you really need all your staff to be available five days a week, nine-to-five. By cutting the total time you expect your employees to work, you could dramatically reduce your staffing and utility overheads – plus very likely increase productivity. Try to identify any tasks that are mirrored by departments that could be consolidated (for example, ordering supplies or in-house meetings), thereby freeing up valuable time.
In times of trouble, it’s often tempting to cut your marketing budget to try and cut your expenses, however, you should do the opposite. Companies rely on advertising and marketing to bring in new business – and the only way you’ll dig yourself out of a hole is by bringing in new work. Instead of cutting your marketing, try some of the alternatives above to find ways to reduce your expenses while maintaining, or even improving, performance.