New Zealand Law Society - Action points for prudent operating during lockdown

Action points for prudent operating during lockdown

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By now the financial implications and reality of the effects of COVID-19 on law firms and their operations will have hit home for most reading this. Clients have shut their wallets, courts have largely closed, the phones have gradually stopped ringing, and emails have steadily reduced.

What I’m hearing around the law firm traps up and down the country is that there’s not realistically a lot in the billing pipeline for much of April/May regardless of practice area, the horizon thereafter looks just as bleak, and cashflow and keeping afloat in the coming months is a major cause of stress and worry.  We can’t change what’s happening, but the lockdown experience could be a time to step off the proverbial treadmill, take stock of your firm’s operations, and critically review overheads and expenses in order to help your firm stay afloat and thrive financially in the coming months.  This article offers a few tips on some small but practical ideas and action points to do just that.

Photo of Ros Morshead

Involve your people

Involve everyone at every level in your office on the costs of running the firm, and do it now.

Action Points:  Set up virtual meetings to discuss reviewing and reducing expenses for everyone’s benefit. Present a simple but generic expenses budget showing wages/salaries (ensuring you can maintain privacy), fixed overheads and general expense categories. Task individuals in your team (at an appropriate level obviously) to review the current position, explore alternatives or improvements and report back.  All suggestions are on the table for discussion.  Set follow-up virtual team meetings for one week.

Payroll: the elephant in the room

Most firms will need to be realistic and make some tough decisions to keep afloat over the next few months on reduced revenue.  Some will already be panicking about the ongoing ability to meet payroll, and possibly also thinking about a restructure of some kind. If you’re looking down that path, it’s critical to know exactly who is doing what and when.

Parkinson’s Law says: “work expands so as to fill the time available for its completion”.  Far less salubrious is Morshead’s Law [pun intended] that says: “busy-ness doesn’t necessarily equate to productivity”.   If a firm isn’t in the habit of recording the workday of all its people (whether authors or support staff), how do you know the true scope and content of everyone’s roles and what fills their days?

Get everyone on timesheets to record daily activities and productivity.  Lockdown is a good time to set this up and implement. Don’t put your head in the sand because, trust me, it’ll eventually cost you money, if it hasn’t already.  I’m confident that reviewing the time and activity of everyone across the firm will probably reveal a substantially different picture than what you thought.  I’m a fan of the time recording programme Clockify.  The base version is free, easy to set up and use, and the reports are good.  There’s also a sync-able mobile phone app.  The sooner a firm’s labour productivity position can be established, the sooner it’ll be clear when or where decisions may need to be made (if any), and on what basis.

Outsourcing might be one useful option to explore if you’re looking to prune costs and/or re-allocate employees. For example, trust account processing, incoming calls, and your business accounts/GST/wages are all areas that can be outsourced.  There are New Zealand-based call centres to take incoming calls and messages, businesses that process trust accounting via your system or theirs + produce end-of-month reports, and your accountant will offer packages to process your business accounts, GST and payroll (as well as tell you what to pay and when).  These businesses do this stuff far more efficiently and cost-effectively in most instances, because that’s all they do.

Action Points: Get all employees on a time recording programme. Implement a ‘no-excuse for lack of completion’ policy.  Review time reports weekly and monthly.  Review individual capacity to see if there’s an ability to take on or re-allocate other work, or if your firm is bogged down with too much/too little capacity. Research options for potential outsourcing and compare costings. Make decisions.


For many firms the 2020-2021 CPD budget may be significantly reduced, and possibly even stopped.  In LawTalk, Issue 937 (March 2020) I wrote about some different ideas for CPD, including a number of credible free and low-cost CPD options.  In about a week many employees will be largely under-utilised at home.  It’s a no-brainer for this time to be used to plan and complete a good chunk of CPD hours online.  Loosen the reins and give your team the freedom to search out and organise their own CPD this year - you might be surprised at some of the choices, which could lead to some interesting team sharing and conversations later.  Given this article’s about financial prudence, it’s even better if CPD is done on a significantly reduced (or even no-cost) budget. Heck, it’s week three of lockdown and I’ve just signed up for an online writing course for US$30.

Action Points:  Consider letting your team know they are free to plan and organise their own 2020/2021 CPD Plan relevant to them personally and their practice.  Set expectations around completion thereof during lockdown, budget parameters and so on.


There’ll be many firms who have desktop landlines as well as providing (or reimbursing) cellphone packages for some employees and you could be doubling up.  In some instances, firms may also cover a portion of employee home internet use, even outside of lockdown.  Yet our top three telcos - Spark, Vodafone and 2Degrees - all offer no-contract business packages in the vicinity of $40+ GST/month including a mobile number, porting of an existing or new landline number (no extra charge for having the landline number), unlimited calls and texts and tonnes of data (useful for hot spotting at home or out of the office that’s fast and perfectly adequate, I assure you). If you can arrange to bundle landline and mobile etc together for as little as about $40/month each, it might be worth reviewing your existing office telecommunications arrangements to see what you DON’T need there, and where costs can be trimmed.

Cellphones are extremely portable, and the numbers can be forwarded to other mobile handsets too. It’s my view that to retain your firm’s IP interest in the phone numbers and phone content (texts aren’t saved to the sim), your firm should be the one providing basic handset devices with a decent screen size and security software.  When looking at costs, there’s no need for a top-of-the-line handset – it’s for work use, not downloading 8,000 songs or gaming.  You may have seen new-brand Oppo on international sporting sponsor boards back in the days when we actually had sporting events?  I’m currently using their dual-sim AX7 which cost about $300 and is not locked to any telco.  It came with a screen protector and case, and I’ve found it’s a lot of bang for buck.

If your office still uses a fax machine with its own fax number/line and associated consumable costs, port the fax number to a virtual ‘fax to email service’ provider instead.  Fax to email services cost about the same as a Big Mac combo per month.

Action Points:  Review current fax, telecommunication, cellphone and internet costs. Review any employee BYOD and home-internet contribution reimbursements.  Contact one or two telcos and have their business team send you proposals and mobile handset prices.  Check out call centre outsourcing.  Contact fax-to-email service providers for switch costs.

Subscriptions and licenses

Critically review all your annual subscriptions and monthly-paid licences. Does every lawyer in your office really need an annual subscription to everything?  If you pay various monthly licences, check if you’re paying more than you need to be.  For example, on a monthly basis you might pay a provider for a practice management package, your IT management company for several Microsoft Office 365 user licences, or your accountant for your online accounting software access.  I’m all for enterprise but, from an overhead review perspective, if you’re paying monthly then you’re likely paying substantially more per annum overall.

Action Points: Review all subscriptions to see what your office really needs.  Review all monthly licences and subscriptions to see whether you can pay annually if it’s cheaper to do so and fits your budget.


Stationery should be treated with a ‘just-in-time management’ approach.  There is no reason to have potentially hundreds of dollars of supplies stashed in the back room  - thousands if you’ve large quantities of pre-paid envelopes or spare printer drums and toner cartridges (which the printer always tells you it needs well in advance, so why stock-pile?).  Some stationery items are considered essential items and can be ordered online.

Pre-printed letterhead might be another consumable that could be pruned. If you have a colour printer, check the price per page for colour from your printer vs the price per page to have boxes of letterhead pre-printed (and firm’s money unnecessarily tied up).  There’s no good reason why your firm can’t set up a logo’d letterhead template in word and use that for all your outward correspondence as necessary.  And I’m okay with the notion of buying a ream or two of fancier paper for letterhead if that makes you feel better. We have our logo etc inserted on all our Word correspondence and precedent letters so correspondence with logo in situ is printed at the same time.

Action Points: Set up an online stationery account, review stationery invoices for the last six months to see the average spend, what’s bought and purchase habits.  Set a monthly stationery budget.  Set a no-purchase moratorium if necessary.  Check letterhead printing costs vs existing printer cost per page. Post-lockdown, complete a stocktake of what’s in the stationery cupboard, and what’s on everyone’s desks.  Implement a ‘make-do’ policy.

Postal facilities and postage

Many firms have both a PO Box and a DX Box.  With postal mail decreasing, you don’t need both and couriers can deal with any urgent deliveries.  A DX box can be used as a primary mail address the same as a PO Box.  Both offer mailboxes, postal envelopes and courier envelope delivery services.  It’s worth comparing the cost of services and consumables between the two.

Bulk supplies of envelopes and bundles of courier packs in-every-size only serve to tie up precious cash-flow without corresponding savings.  Buy smaller quantities of postal items as they’re needed from your online stationery supplier, or directly from DX Mail themselves. If you bulk-buy for logo-printing purposes, you’ll be able to get by purchasing a lesser quantity, and no one will think less of your firm if envelopes don’t have a printed logo.

Action Points:  Compare the cost of DX vs PO boxes.  Review envelope/courier quantities, costs, purchase habits and frequency, and logo-printing costs.  Have office conversations around expectations and use of office postage consumables.


PII and other liability/risk policies are a big one-off annual cost for many firms.  If you usually pay your insurances upfront, the coming months might find you in a different financial position. Speak to your broker to see if they offer premium funding or a split payment plan of some kind. There’ll likely be a bit of interest (might even be a lower rate than an unsecured business overdraft) and a small set up fee, but these are tax deductible and will help keep a better handle on your cashflow.

Action Points: Contact your broker to discuss forthcoming renewals and whether premium funding might be an option.


You’ll likely find lots of other ways to prune costs too, but the key message is that, on aggregate, small changes can create new and better operational habits and ways of thinking that will have a huge impact on a firm overall.  Use this lockdown time to look critically at your firm’s operations and overheads, see if there are other alternatives to how you usually operate, and make changes as necessary for the good of your firm’s financial health moving forward.