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WHAT CAN YOU DO ABOUT MINIMISING THE EFFECTS

OF THE CREDIT CRUNCH ON YOUR FIRM.

The credit crunch has been in the news every day for the last couple of months and if you believe the news it is getting worse by the day. An important aspect lacking in these reports is what you can do about it!

One way to overcome the effect of this crisis is to review what is being insourced and outsourced.

Review your existing contracts - If you are currently buying services or goods from existing suppliers, now may be a good time to review those terms and are they the best ones available? One area in which prices change by the day is in the area of IT/Telecoms, where prices fall by the day but suppliers are happy for existing clients to stay on original contracts.

Insource some of the services that you passed on to other law firms - this is most applicable in areas such as will writing and debt collection. You may now have the capacity to handle this work. Outsource some of the more mundane work such as copy and audio typing and make sure that the work you do is the most profitable - get your secretaries to do some fee earning work by taking the low value work away from them.

Turn your fixed cost base into a variable cost through outsourcing non fee earning work - the benefit is that you can increase or decrease your outsourced team as needed for a fraction of the price, without the associated HR issues, thereby breaking the traditional model of 'a third, a third, a third' for the salary/overhead/profit ratio as you take the overhead amount down and increase the profit element.

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