While analysts predict firms will still see savings from expense cuts in 2021, these savings won’t be as dramatic as in 2020 and, moreover, recommend that firms should use profit gains to invest in long-term strategies for growth — like technology.
BY SCOTT MCFETTERS
The recently released Peer Monitor PMI index for Q2 2021 showed the growth in legal demand and productivity in Q1/2 actually produced the highest PMI ever, which is great news. Firms are still being very conservative, however, on spending on overhead expenses and technology. While analysts predict firms will still see savings from expense cuts in 2021, these savings won’t be as dramatic as in 2020 and, moreover, recommend that firms should use profit gains in 2020 and 2021 to invest in long-term strategies for growth — like technology.
While firms need to continue to invest in IT, keeping financial flexibility and conservation of capital top of mind for unidentified projects and circumstances continues to be vital. These realities align with the benefits of leasing and financing — and this is exactly what we are helping our law firm clients with right now, regardless of size, geographic presence, or practice specialty.
Below are just a few of the financial benefits that improve liquidity, financial flexibility and cut IT costs when leasing and financing your firm’s technology.
Leverage Leasing and Financing to Improve Liquidity
Firms are leveraging leasing and financing options as the go-to strategy to manage unbudgeted costs of laptops, desktops, and any variety of assets.
This extends to software as well. Financing software is a strategy that many firms can now leverage to ensure their planned or in progress software projects remain on track and on budget. Many firms are still in the transitional phase as they migrate or upgrade their financial systems software.
Key Benefits of Financing Software to Consider
- Monthly expense vs. total cost. Monthly payments may secure a more cost-effective solution over the life of a lease.
- Spreading costs over a 36-to-60-month lease is less taxing on cash reserves, allowing partner distributions to proceed regularly.
- Software costs also carry associated soft costs that may not be factored into an outright purchase price.
- Financing terms may offer more flexibility and incorporate upgrades that would otherwise pose additional after-purchase costs.
- Deferred payments are an option in some cases
- Related hardware concerns. Law firms support complex information technology infrastructures and may discover that additional hardware and software upgrades are required. Leasing and financing wraps this into a streamlined package and smooths out unbudgeted expenses.