Legal services bulletin Jun 2013

Legal Services BulletinMay-June 2013

COMMENT FEATURE: see overleaf

REDUCING PROPERTY COSTS

why your office space shouldn’t be the

‘final frontier’ in the search for savings!

That doesn’t sound like a lot to me, but inchatting to some industry colleagues it wouldappear that, worryingly, 25% might even be anover-estimate!

Just as we went to print Winmark’s annualLooking Glass Report revealed that 80% ofManaging Partners expect business to stagnatenext year, more than half of firms anticipate amerger and a third of firms have ditched

2013MID TERM REVIEW

The future of the sector isunder the microscope againwith the release of two morereports in a matter of days.

Baker Tilly’s LegalInnovation 2013 informed usthat a quarter of firms expectto change their strategy inresponse to the LegalServices Act.

Only a quarter?

Jason AdderleyT: 0121 602 1445M: 07824 449 577E: j.adderley@erauk.net: @ERA_Legal

The Editor

Jason Adderley is a consultant Partner with ERAspecialising in managing programmes of work forlegal and professional services firms.

He has 18 years experience of working withsolicitors and other professional consultants as aclient and as a service provider.

merger and a third of firms have ditchedPartners recently to cut costs.

As our brash panel on the right illustrates therestill remains the opportunity to removesubstantial fat from the non-salary overhead.Just these three projects represent savings inexcess of £100,000. The client firms are nothuge, nor are they badly run; it’s simply thatour expertise and market leverage brings resultsover and above the savings that firms mayattain themselves.

We’ve also recently utilised our expertise inTravel Management to assist Withers LLPwhich is a subject we’ll cover in our next issue.

#3Auditing& Compliance

Why ERA?

LSN London Networking Event 15 July 2013

Expense Reduction Analysts is Network Partner withLSN. The free Networking Events have no setagenda, and exist to help law firm management &support staff share information.

LSN Networking Events provide a unique opportunityto gather under one roof and share experiences withothers and, as a result, find opportunities to buildsolutions on this common ground – in an informaland social environment.

At the time of going to print over 250 law firm staffhave registered for the next event to be held at:

The Anthologist, 58 Gresham Street, London, EC2V 7BB

For more information visit: www.legalsupportnetwork.co.uk

ERA was recently called in by a client to negotiate a

ANALYSING OCCUPATION FOR 6-FIGURE SAVINGS

STUDY

REDUCING PROPERTY COSTS

A law firm’s office accounts for around 20% ofbusiness operating costs. Clearly therefore, spaceshouldn’t be the final frontier in the search for savings –particularly if inflexible long leases in the ‘wrong’ spacerender expansion or merger discussions unworkable.

With a typical desk space costing a firm around £8,000 perannum, it’s a worthwhile exercise assessing how many ofyour firm’s desks are occupied at any given time. Typicaloccupancy is just 60% accounting for holiday, sickness orworking from other locations. It’s easy to see what a hugebottom-line impact desk sharing and other flexible workingarrangements may have.

A lease event, such as a break or expiry is often the catalystfor a forensic interrogation of costs and working practices;Does the firm really need to pay an office rent for all that filestorage? What services could be centralised? What servicescould be outsourced? Does the office environment encouragecollaboration and innovation?

As the example below suggests, raising these issuescan transform operations as well as the providingsubstantial financial benefits.

CASE

& Compliance

Once we’ve implemented aproject we regularly audit thespend to ensure savings aresustained.

We ensure suppliers remaincompliant with their contractsand pricing – and that yourfirm does everything you canto maximise savings.

Sometimes things change, withnew employees, new systemsand regulations.

Rest assured, that ERA isalways in the market lookingfor new ways to improve theprojects we’ve implementedwith you and bring even moresavings to the table.

ERA was recently called in by a client to negotiate anew lease on his existing building. After dueinspection and an initial occupational analysis ourconsultant, a seasoned Acquisition Surveyor,concluded that the firm could make substantialsavings by taking an alternative course of action torenewal as it appeared that 30% of the floor spacewas unused or under-utilised.

After carrying out a full market search, drawing inappropriate expertise in office design and viewing severalsuitable premises ERA negotiated a highly incentivised dealproviding substantial annual six figure savings in rent, rates,service charge and other occupational costs even afterallowing for the costs of the move and dilapidations liabilitiesfor the existing space.

Moreover, our client has changed their approach to open-plan working, encouraged more sustainable methods ofworking and outsourced elements of IT infrastructure whichhas the had added benefit of de-risking elements of theoperation.

Although our original brief was a simple lease renewal,as a consultant it’s our role to challenge receivedwisdom if we can demonstrate there is a better way.

Jason AdderleyT: 0121 602 1445M: 07824 449 577E: j.adderley@erauk.net: @ERA_Legal