You are here

Stop counting paperclips, accountants tell solicitors

18 November 2008

Law firms should not waste time penny pinching during the recession and concentrate instead on reducing large items of expenditure, the solicitors group of the Institute of Chartered Accountants in England and Wales has said.

The advice comes after a number of stories about firms cutting down on minor items such as paperclips and free biscuits.

The solicitors group, made up of over 1,400 accountants who specialises in advising solicitors, has drawn up a credit crunch “survival guide” for law firms.

Firms are advised to avoid cutting jobs by redeploying fee-earners in busier departments and concentrate on minimising large items of expenditure, without wasting time reducing immaterial amounts.

The accountants also suggest that fees are reviewed regularly and solicitors exercise careful control over unbilled work and disbursements to maintain working capital.

They should monitor cash flow on a daily and monthly basis, and take debt collection work away from busy fee-earners and put it in the hands of a nominated debt collector.

Solicitors should consider sale and lease-back of company cars to accelerate tax relief and reduce the tax cost by choosing low CO2 emission vehicles.

A salary sacrifice scheme could be used to replace employees’ taxable pay with tax-free benefits such as extra holiday, life assurance, childcare vouchers and critical illness cover.

“These are extremely challenging times for businesses of all sizes and across every sector – and professional services firms are no exception,” said Janet Marton, chairwoman of the solicitors group.

“The credit crunch has thrown up a whole new set of issues, ranging from levels of security for banking, to managing risk to ensure professional indemnity cover continues. In the present climate, sound financial management is more important than ever.”

Categorised in:

Commercial Landlord & Tenant Courts & Judiciary