How a Law Firm Slashed Over One Million Dollars in Expenses per Year

The COVID Shutdowns drastically changed the business landscape. The plaintiff personal injury law firm of Simmons and Fletcher, P.C. in Houston, Texas, was in no way exempt from this. In addition to the shutdown interrupting business and forcing the firm to go from full onsite to fully remote, both founding partners passed away in 2019 and 2020, respectively. The junior profit-sharing partners suddenly became the owners and the decision makers, and they recognized that change was coming if the firm founded in 1979 would survive. We spoke to managing partner Paul H. Cannon about how they did it.

Automation Technology as a Cost Saving Mechanism

Shortly before the pandemic, the firm had moved from an older file management system that amounted to a way to store data to a new system that allowed for the automation of tasks. “One of the ways the firm was able to save money was to automate more and more of the daily jobs,” says Cannon. Welcome letters, rejection letters, and notice letters became an automated task versus something that had to be typed. In addition, reports have become more and more automated. “We put a lot of time and effort into learning how to make the system maximize efficiency so that fewer people could do the same job,” says Cannon. By automating the tasks and reports, only 3 people were needed in intake vs. 5, 6 case managers were required vs. 8, and part-time assistants were no longer needed to pick up overflow work. The initial outlay in the case management software paid for itself in salaries saved. Five 30,000-40,000 positions were no longer needed to handle the same volume of cases.

Renegotiating Your Lease to Save Money

Another way the firm was able to save money was by renegotiating their lease. Paul describes how they did it as follows:

We had been in the same building for over 15 years, so our lease was written back when it was expected to have a clause that allowed cancellation if one of the named partners died.  When the second named partner passed away, we called a meeting. We knew it was a big advantage for the property not to lower the per-square-foot rent price because other renters would demand that rate in their renewal if they lowered it. So, we made them an offer they couldn’t refuse.

The attorneys proposed that they would not exercise their right to cancel and go rent somewhere cheaper and would sign a 5 year lease at the same square footage rate if the landlord would 1) give them a certain number of months rent-free at the beginning and 2) add a clause allowing the firm to release up to 25% of the space at the end of the 6 months. (Reducing space made sense because less staff would be required thanks to the automation.)  An agreement was reached.

Reevaluating Your Vendors to Save Money

Paul enlisted the firm’s bookkeeper/office manager Kayla Horton for the next big measure to save costs. “We decided to reevaluate every vendor contract we have and see what we could do to cut costs, and it was worth it’” says Paul.   The firm IT was a huge place for cutting costs. The firm was using an outside IT company that charged per seat and had to service an onside server. Once COVID came along, the firm moved everything to the cloud—meaning there was less need for on-site service. Cannon said, “We found a competitor and got a quote for the same services. Then, we used that quote to tell our current vendor they could either scrap the existing contract and renegotiate a new one at that rate for 3 years, or at the end of the 8 months or so we have left, we were gone.”  Not wanting to lose a client, they agreed.

But Cannon and Horton did not stop there. “Next, we looked at the copiers. We no longer needed the two large industrial copiers and two smaller ones we had been under contract for, so we got a competing bid and renegotiated until we only had to pay for one large and one small copier,” says Paul. This process was used to lower phone service charges and other vendor-provided services.

In the end, we saved over a million dollars in expenses in annual costs,” says Cannon.  He credits those savings to the firm’s continued success despite the disruption caused by the pandemic.