Why your law firm should be outsourcing your Cashroom

Articles
12.01.2021

Written by:

Grant Yuill
Head of Marketing & Customer Engagement

One of our law firm partners saved £22,000 by outsourcing their Cashroom. That’s a fact. And believe it or not it happened in 2020.

We all know why businesses are tightening their belts and looking to outsource the likes of their account’s functions. It’s now not enough to continue operating in an antiquated way. It’s all about convenience and minimising the slack in every area of your practice. And with remote working going nowhere fast, you need to be sure you are prepared with the right systems and support in place.

Focus on what you want to be doing

The solo and small to medium sized legal practices I speak to tell me that for the most part they still utilise outdated and ineffective tools for their legal accounting needs. If you fall into this category, you really could be putting your firm at a significant disadvantage.

Inadequate legal accounting software and can lead to excessive amounts of time spent on accounting tasks, as well as the potential for increased errors. Whether you are stuck in the stone-age of paper systems, using accounting software that is not tailored to your practice, or spending 10s of thousands of pounds on salaries for in-house cashiers, it is past time you make the change to effective, streamlined, flexible and compliant ways of working. If you put your trust in others to run your cashiering, management accounts and payroll functions, you can focus on what you want to be doing - feeing and running your business.

The fear of Outsourcing

It’s a concept people get fired up about. Some people love it; others hate it. It seems as though nothing divides a room full of business professionals faster than the idea of sending some services out of house. Although some people will argue against it until they’re blue in the face, outsourcing is incredibly important for virtually every business today.

Though there have been controversies regarding outsourcing, the overwhelming advantages of outsourcing speak for themselves. More firms are drawing up plans to outsource work to third parties. With staffing cuts inevitable and the concept of agile/home working becoming a necessity you are being forced to cut back drastically on staffing and expensive infrastructure requirements.

Many firms now base their entire business plan around the delegation of functions to external service providers. My view is that outsourcing is not simply a way of cutting costs; it is now a business model.

Diane Ireland, Legal Process Engineer at Inksters Solicitors started using our Outsourced Cashroom Services a few years ago and had this to say; “It was a big decision for us to outsource our Cashroom function. We have our own in-house cashier but with Denovo Cashroom Services supplementing this function we can deliver day-to-day financial transactions much more efficiently. This has allowed us to free up time for our Cashier to focus on more corporate financial tasks. We no longer worry about holidays/absences. Working with Denovo Cashroom Services ensures the continual running of this essential function. Denovo Cashroom Services provide us flexible, professional and knowledgeable services with a real friendly and personal touch, delivering a compliant finance function.”

The Obvious Benefits

Outsourcing will save you time and money. It’s often the first thing mentioned when someone suggests you should outsource a function or service. Some businesses send their HR functions to an outside company, while others will seek outside help for everything from customer service to marketing to PR to strategic planning and consulting. There’s no shortage of services and functions to outsource.

The major reason law firms opt to outsource is because it really does save time and money. Take cashiering for example: By contracting with a third-party provider, you get instant access to a team of experienced, expert SOLAS qualified staff who interact with you and your clients using the latest technology and techniques. Your clients get better care, your outsourced cashiers resolve issues faster, and you don’t need to deal with high turnover or infrastructure costs. Everybody wins!

The Expertise You Need - There are plenty of less obvious reasons to outsource. Once the cost-saving and time-saving aspects have been discussed, many people argue there’s no additional benefit to outsourcing, which simply isn’t true.

A move to outsource is akin to asking for a helping hand – a big leap for some legal professionals, I know! Plenty of smaller firms outsource not because they want to cut their overhead or they can’t find qualified staff, but because they simply don’t have the in-house expertise. In growth situations they don’t have time to develop it either. In that case, seeking out a third-party provider is perhaps the smartest move a firm can make.

Supporting Growth - While growth is usually a good thing, a business can experience growing pains. Managing growth is often difficult, and your firm might struggle to keep up with demand. Teaming up with a third-party provider is the best thing you can do. Again, look at cashiering as an example: You might have some great cashiers already in place, but they’re suddenly overwhelmed by the volume, and you just keep growing.

An Outsourced Cashroom adds a team of highly trained people to supplement your existing team. They exist to support you if your cashier has moved on or retired, if you are starting up a new firm, or you are just looking for a way to streamline your Cashroom. Having a fully qualified team behind you can help run your day to day accounts functions while making sure that your firm is practising within the Law Society of Scotland’s Accounting rules and provide you with management information and Management Accounts allowing you to focus on growing your business.

Access to Technology - Infrastructure cost is another major concern when it comes to in-house services. Businesses that outsource HR might choose to do so because implementing a new payroll system is expensive. A firm that sends cashiering out of house might be doing so because The Law Society of Scotland regulates how firms manage client’s money. The Solicitor’s Accounts Rules are complex and technical, but mandatory. A Legal Cashiering Service takes away that worry as they ensure compliance with the Accounts Rules. Your third-party provider has already invested in the technology needed to deliver the services you seek—and staff are already trained to use it.

Full Integration

It’s important that law firms use legal accounting software that’s fully integrated into a comprehensive practice management system.  Lawyers should be able to track their time, work on client matters, and delegate work to colleagues all while tracking expenses and generating invoices for cases in one system. Along with the knowledge that they have comprehensive cashiering services, analytical management accounts, secure payroll and pension services and efficiency with risk and compliance reviews. Being able to do this in a single, fully integrated system is important for the productivity of your law firm.

When it comes to choosing the right systems for your law firm, you really need to consider best software for YOUR practice. You also need a system that can fit the needs of your firm while being flexible enough to change and grow as you and your team evolves. It must allow you to operate in a realistic fashion – customisable to the way YOU work, not the way law firms work. Don’t feel pressured to adopt just any system that fits the minimums, give it a test drive to make sure that it fully meets all of your critical requirements.

And remember…outsourcing helps you get the focus back on your core business and control costs at the same time. If you find yourself asking the following questions, then outsourcing is for you:

  • Are we working at optimum costs?
  • Are my resources being utilised effectively?
  • Are my current resources capable of supporting new technology?
  • Is there a quicker, more effective method to handle processes?
  • Does my team have the operational expertise to do the task assigned?
  • Can we work remotely, securely and efficiently, whist staying compliant?

Not using Denovo to manage and grow your business? Get a free demo and see why some of the most successful small to medium sized law firms in Scotland use Denovo as their whole practice management software solution.

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