The experiences of 2020 have underscored the importance of sound financial practices– are lease and finance options part of that strategy? Here are 3 things to consider in your firm’s financial strategy.
1. When Are Firms Returning to the Office?
As the economy stabilized, firms are now debating, can we set a return to office date? The vast majority of firms (80%) have not set a return date – and there’s a good reason: working from home is working for law firms.
Acritas reports that the proportion of U.S. lawyers who now want to work remotely at least one day a week has doubled from the pre-pandemic period. While 37 percent of lawyers expressed an interest in remote work prior to the pandemic, 76 percent now favor the remote work option. 1
This fundamental shift in how work is performed will fundamentally change where—and as a consequence, will affect how firms shift their investments in 2021–especially when it comes to adjusting their investments in real estate and technology.
2. Shifting Investments in Technology and Real Estate
It shouldn’t be surprising that because of the success of remote work models, law firms will be downsizing real estate needs on average by 10%-30%, according to Cushman & Wakefield Vice Chair Sherry Cushman. In fact, firms will ultimately save as much as 3.5% of revenue by renegotiating these leases.2 Some of these costs may be passed on to employees who could incur additional taxes in their home states.
Technology investments, however, will be increasing. Indeed, the overwhelming majority of firms (84%) are ramping up their investments in technology citing that the experience of adapting radically and rapidly created more openness to experimentation and adoption. Work from Home flexibility may continue, but many are still going to eventually move back to an office of some kind.
3. Consider Cost Avoidance: How Can a Lease and Finance Strategy Play in?
While firms shift their investments, cost avoidance must also come into play. Almost all firms have significantly reduced costs by making fundamental changes in their operations, and that should include financial flexibility as well.
When it comes to how firms’ technology hardware and software are procured – cash, vendor financing, bank financing or independent lessor financing – there are concrete differences in value that impact the bottomline.
Questions you should be asking include: does owning this piece of technology align with its useful life or refresh cycle? Is my technology procurement and vendor invoicing an efficient, centralized operation? Are essential projects delayed because of bureaucratic decision cycles?
An independent lessor like CoreTech can streamline all of your firm’s IT, hardware, software, office equipment and furniture into one monthly payment with a master lease agreement widely regarded as the industry gold standard. All leased items are managed through our state-of-the-art asset management system that helps you efficiently perform remote asset audits and have direct access to lease terms to help you cut IT costs and enable transparency over all of your agreements.
1. Peer Monitor State of the Legal Industry Report 2021
2. 2020 Altman Weil Law Firms in transition