Hints & Tips from Expense Reduction Analysts for UK law firms seeking to reduce costs and improve processes

1. Legal Services Bulletin
March-April 2014
Jason Adderley
T: 0121 602 1445
M: 07824 449 577
E: j.adderley@erauk.net
: @ERA_Legal
COMMENT FEATURES: see overleaf
ONSHORE THING
“Big Law” Looks North
CASE STUDY REVIEW
Susskind says that Case Studies
provide a justification for
embracing change – we agree!
The Editor
Jason Adderley is a consultant Partner with ERA
specialising in managing programmes of work for
legal and professional services firms.
He has 19 years experience of working with
solicitors and other professional consultants as a
client and as a service provider.
SAVINGS REPORT
We’ve issued a rash of recommendations in early
2014 across a range of cost areas; successful projects
include up to 40% for Archive Storage, up to 48% for
Office Supplies, up to 57% for Mobile Phones, up to
66% for Secure Shredding and 30% for Tea &
Biscuits!
POSTAGE
Royal Mail prices are on the rise again and with the
advent of Online Business Accounts (OBA),
downstream access providers and VAT issues is
postage a cost you can afford to ignore?
WARM RECEPTION TO OUTSOURCING
A recent survey found that 10% of law firms now
outsource their reception function.
PRACTICE TIPS
networkpartner withFrom our perspective we’re concerned that median
spend on non-salary overheads per fee earner has
risen by the largest sum for several years – up
5.5% to £38,129.
This may be explained, at least in part, by the
accelerating use of outsourcing particularly in IT
where 50% of the practices surveyed outsource IT
infrastructure, development and IT support -
illustrated by the slight fall in the ratio of non-
secretarial support staff per fee earner of 0.37.
The static ratio of secretaries per fee earner (0.61)
also implies that firms are leveraging technology
where they can rendering some secretarial tasks
redundant – particularly as the ratio in 2008 was
as high as 0.77.
Nevertheless, the survey warns that with upward
pressure on salary costs for fee earners and
increasing overheads the income each fee earner
will need to achieve before contributing a penny to
profit is £106,744.
That is, of course, where ERA can assist. In just
the first few months of 2014 we’ve reported
cumulative like for like savings of several hundreds
of thousands of pounds for common law firm
purchases like archive storage, office supplies,
mobile telephones, DX, business print and
photocopying.
So, as activity increases, our clients are able to
lock-in higher margins or divert costs towards the
employment of fee earners to grow revenue.
As a barometer of the
financial health of mid-sized
law firms the annual Law
Management Section
Benchmarking Survey
always makes interesting
reading.
On the positive front
practice fee income (4.1%)
and PEP (3.6%) have both
increased reflecting the
general upturn in economic
activity.

2. Jason Adderley
T: 0121 602 1445
M: 07824 449 577
E: j.adderley@erauk.net
: @ERA_Legal
STUDY
CASE
REVIEW
The projects carried out for Eversheds, Matthew Arnold
& Baldwin and Withers are projected to save over £1
million cumulatively over the course of ERA’s
involvement. Clearly, we’d be very keen to talk
through a programme of work with your firm so please
feel free to contact us using the details below.
“ERA’s guidance and expertise was critical to the
successful overhaul of our printing, scanning and
document production facilities.
With their help we now have a Managed Print
infrastructure and outsourced on-site Print Room
service that delivers exactly what our business needs
and that is exceptional value for money.”
Mike Smith
Finance Director for Eversheds Ireland
“I was highly sceptical of Jason’s claims during our
initial meetings, but I am happy to say that his team
have managed to consistently outperform my
expectations, and their specialists know their
business.”
David Abrahams,
Finance Director, Matthew Arnold & Baldwin LLP
“What struck me was ERA’s patience, professionalism
and thorough knowledge of the market.”
Michael Priestley,
Head of Business Services Europe and Asia for Withers LLP
“What convinces lawyers most, is to learn in practice
what the actual benefits are and to see concrete case
studies, because it seems to me that for any set of
experiences or ideas, clever lawyers can always come
up with counter ideas or counter arguments.
But it is harder to deny the reality of successful case
studies.”
Prof. Richard Susskind OBE
ERA is Network Partner with the
Legal LSN.
LSN Legal Practice Management Conference 2014
The Legal Practice Management conference 2014 is the only event
of its kind to specifically target practice managers and directors,
heads of operations and heads of finance from small to medium
UK law firms.
The conference is in London on May 19
For more information visit: www.legalsupportnetwork.co.uk
BIGLAWFIRMSLOOKNORTH
Berwin Leighton Paisner(BLP)
and Hogan Lovells are the two
latest firms to launch low-cost
hubs outside London.
BLP will launch its Manchester
office in the summer, to be
staffed by paralegals, associates,
business services personnel and
secretaries. Hogan Lovells has
settled on a Birmingham base to
offer less complex aspects of
work emanating from London.
Moving less complex work or
support services out of the City
has become something of trend in
the last few years. Allen &
Overy benefitted from a £2.5m
taxpayer grant to move support
services to Belfast, and Ashurst
intends to boost its presence in
Glasgow with the aim making it
the fourth largest office in the
firm’s network.
The motivations for the firms are
clear; to obtain competitive
advantage whilst retaining a level
of control and direction for
outlying offices, and to respond to
clients’ demands for the cost
effective delivery of such
services.
How can regional mid-tier firms
respond?
One way could be the adoption of
process improvement
methodology. West Midlands
firms Higgs & Sons has driven
forward a 2-year Knowledge
Transfer Partnership with Aston
Business School with remarkable
results.
Glyn Morris, Higgs’ Finance
Director, has led the project and
will be appearing at the LSN Legal
Practice Management conference
in May.
IDEA
BIG