Savings in the wake of COVID-19
Despite the economic instability of the age of coronavirus, lawyers may have been able to cut costs across the board. Here’s how they can stay on track financially as the post-pandemic landscape looms.
For many lawyers across the country, COVID-19 has been a fraught time financially, with salary cuts, pay freezes or even furloughs and redundancies impacting upon the fiscal health of professionals. However, even for those whose pay may have fluctuated in this time, lawyers can and potentially should be better off financially in the wake of the pandemic.
The reason for this, Plexus associate director Sam Burrett identifies, is that the cost of lawyering has decreased.
“You no longer need to travel into the city for your job, buy coffees with colleagues or shout a round of drinks on Friday afternoon,” he posited.
“In addition, you’ve probably bought fewer expensive office clothes in the last six months while you’ve been working in your pyjamas.
“It usually costs more to be a lawyer than most people realise, but many of those costs have been minimised by lockdown and remote working.”
Are boutique practitioners saving money?
The age of coronavirus is “definitely not the circumstances in which people envisioned themselves saving money”, SkilledSmart founder Paridhi Jain reflected, but she told Lawyers Weekly that she has had numerous working professionals tell her how much money they’re saving as a function of being at home more during the pandemic. The reduced cost of travel, eating out, socialising all starts to add up, she said.
“For many, this could be a silver lining to make the most out of. For professionals, sole practitioners, small business owners, this extra cash could be a really valuable ‘buffer’ to store away as an emergency fund. Right now, having that cash buffer is key, to create peace of mind as we continue to sail through some really uncertain times,” she outlined.
“Although some will be excited to spend the cash or invest it, ensuring you have a cash buffer first is critical for financial security. At times like this, the cliche holds true: cash is king. So, if you have a bit extra on hand, don’t be too quick to spend it when we don’t know how long this economic ‘winter’ may last.”
If boutique practitioners have “enough” savings and want to start looking at investing for the future, Ms Jain detailed, such a strategy will come down to asking a few key questions of one’s self.
“For professionals looking to invest in the markets for their personal finances, knowing your investing time horizon is critical. Are you looking to invest for five years? 10 years? 20 years? If you’ll need the cash back soon (i.e. within five years), know that volatility is greater in the short-term, subjecting investments to higher risk,” she said.
“For sole practitioners and small business owners looking to put the cash back into their business, this could be an opportunity to invest in systems and processes that digitise operations and customer service, not just in the short-term but in the longer-term. How can going digital be a value-add, grow your reach/market?”
Other savings across the board
Although COVID-19 has resulted in some cost savings, such as reduced rent, fewer travel expenses and no client events, the biggest winner – according to Fox & Hare co-founder and financial adviser Glen Hare – has been efficiency.
“The operations of a boutique firm are rarely scrutinised with client work nearly always taking precedence. If nothing else, COVID-19 has forced professionals to question the way ‘things have always been done’,” he detailed.
“Boutique firms have embraced new technology much faster than their larger counterparts utilising: Zoom, which everyone is very familiar with reducing the need to commute between meetings to see clients; DocuSign, avoiding reams of paper with sticky notes being sent via snail mail; Loom, enabling a lawyer to review a document while recording a video in real-time as they discuss the necessary amendments; and Teams/Slack, reducing the need for lengthy emails and unnecessary meetings encouraging communication between colleagues.”
It is imperative, Mr Hare continued, that these boutique forms don’t go back to “normal”.
“There is no need to commute to client meetings if they’re happy to meet via videoconference. It doesn’t mean no more face to face meetings; it just means providing the client with the option for video. Electronic signatures avoid back and forth between the lawyer and client for missed signatures or missing pages,” he stressed.
“Chat software ensures quick questions can be answered in a timely, doing away with unnecessary meetings.
“The current unique environment has forced boutique forms to focus on operations, in turn creating greater efficiencies, which have subsequently led to greater productively and in turn profitability.”