How to Help Your Law Firm Clients Save On a Big Expense: Rent
Often times, one of the biggest expenses for a law practice is rent. Attorneys want to showcase their expertise and value by having an office space that properly reflects those values. Some law firms feel they have to have a big office space to prove that they are legitimate and possibly even seem bigger than they really are. And, while your clients may think it is hard to justify billable rate of $400+/hour when they don’t have a huge office, it isn’t.
A good benchmark to look at is how much rent your client is spending per year versus how much gross revenue they have. Law practice’s rent should be no more than 7 percent of gross revenue. So, if your client is billing $100,000 per year, rent should be no more than $7,000 for the year, or roughly $580 per month.
If you look at your client’s rent and notice they are spending a lot more than they should, there are some things to think about. Do they need such a large space, or to be in that coveted downtown location? Do all their employees need to work in the office every day? How many times do clients actually come into the office? Can they rent a room from another business like a financial advisor?
Have a conversation with you client about their rent. Why did they choose that space? What is important to them in space? Once you have a better understanding of their wants and needs, here are four things you can suggest to help them reduce their rent expense:
- Move locations
- Have a home office
- Rent a shared space
- Sublease unused space
Moving locations may be the answer for some law practices. If it is a firm that has been in business for many years, they may not want to hear about virtual office and working remotely. In that case, suggesting they move a couple of blocks away, where rent is cheaper per square foot, may be the answer. Your client may also be able to stay in the same location but move to a smaller space. If they would be willing to have some employees work remotely, they may not need as much square feet.
Have a Home Office
Another option is not having an office outside the home. A lot of attorneys only talk to clients via phone and email. They rarely meet a client in person. Your client can set up a home office and rent a conference room for the one or two times a month they meet with their customers. Remember, happy customers are the ones who keep coming back and sending referrals, not necessarily ones who were impressed with a huge office.
Rent a Shared Space
A third option is looking into a shared space. Maybe, your client can rent a couple of rooms from another firm who practices a different type of law. Or, maybe, they can share a space with someone who provides another service, such as a financial advisor or CPA. There are also co-working spaces, such as Regus, where your client can have anything from a virtual office (they handle your calls and mail without you having a space) to having full use of a furnished office.
Sublease Unused Space
If your client wants to stay at their current location, another possibility is that they can rent or sublease part of their space. If they have a room or two that hasn’t been used, there are small businesses that are looking to rent a small space as they grow. If they don’t have any available space, they could look into rearranging their office by having people share offices, or maybe they can digitize all those filing cabinets and rent out that space to someone else. A third option is listing their conference room or other spaces on sites such as Liquidspace.
Help Your Clients Reduce Their Rent Expense
You will be a hero if you can show that there are options to lower their rent. In some cases, you may save them more than $1,000 per month. But, even if you can only help them decrease their rent by $100 per month, you will be saving them $1,000 per year! By helping your client increase their bottom line, you increase your value to them and show that you really care about their law practice.