Cost-padding, profit shedding law firms! Are you one of them?
Cost padding happens when a business deliberately inflates its costs than what it has incurred and then passes it over to its consumers. However, there are costs that get passed over by the businesses unintentionally due to the high operating expenses, can this be considered as cost padding as well?
Even if it is, yes, should your law firm really be worried if the additional expenses are anyways getting rolled over to your clients ultimately?
In today’s time, operating costs has become inversely proportional to the profit. Higher the cost, the lesser the profit, and vice-versa.
With the advent of technology and the increase in competition, it has almost become impossible to pass over these costs to the clients, as there is always a fear of losing them out to the competition. Therefore, cost-padding is eventually leading to profit-shedding because if you are not optimizing your expenses, your practice will be bearing the inflated expenses out of its profit margins, making it extremely difficult for it to survive in the longer run.
Whilst managing the cost of operating business is easier said than done, it’s literally a serious challenge for law firms because it was not very long ago that they were just not being questioned on their costs by their clients at all.
Outsourcing of monotonous and tedious tasks is one way of reducing your operating expenses. It will not only give you the cost benefits, but it will also lead to an increase in efficiency, help you operate in a 24*7 environment, and will help you manage the uneven work-flow effectively. Last but not the least, it will also allow you to accept more cases that you might have turned-down otherwise due to a lack of resources. All of this, however, will happen only if you collaborate with a reliable and experienced vendor.
Draft n Craft has been serving US law firms for over 12 years and has collaborated with over 200 US law firms over the years. The company has been supporting both plaintiffs as well as defense law firms and is not only helping them manage their costs but has also been instrumental in developing credible processes which in turn is reducing their case cycles as well.
So if you are one of those law firms who is looking to be a cost-shedding, profit-making practice, don’t just wait, please feel free to connect at email@example.com for a free consultation.
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