As a long-term business partner of Thomson Reuters Elite, CoreTech Leasing has been working with many partner firms to help finance the software and all related costs for their upgrade to 3E®. However, it’s important firms don’t leave hardware behind, including laptops and desktops. In the increasingly competitive business of law, tying up capital in a depreciating asset like computer hardware—desktops, laptops, tablets and servers—not only doesn’t make sense, but it’s a type of strategic negligence. Leasing is a much better option for a wide range of reasons, some of them surprising.
Today’s lawyers practice in a dynamic and pressurized business environment. The ability to quickly adjust your firm’s operations in response to changes isn’t just a good idea. It can make the difference between hitting your targets and missing them. More specifically, it can make the difference between, say, accepting a great case that includes some contingencies and passing on it because your firm can’t afford the risk. Or it can have you deciding not to pursue a major new client because you can’t afford to staff it. Leasing your firm’s technology can make the unaffordable affordable and provide firm leadership with the flexibility to meet the ever-changing industry demands.
Law firms spend a lot on technology, and the amount is increasing. According to a recent survey by the International Legal Technology Association, 83% of law firms spent at least $5,000 per lawyer on technology. 47% of firms spent between $8,000 and $21,000 per lawyer, and a surprising 14% of law firms spent more than $21,000 per lawyer. Of this spending, hardware was the biggest investment, with the top four items purchased being desktop hardware (including PCs) laptops and notebooks, servers, and printers. Equipping a lawyer is a major investment. And given this, leasing just makes sense both financially and strategically.
Leasing, first of all, means predictable monthly costs for IT. In a business environment where collections can take months, and cash flow is critically important, being able to predict your monthly technology expenditure can spell the difference between being in the red and being in the black.
It also means that your firm can use best-of-breed equipment without the massive cash outlay that purchasing it would entail. Technology is a fact of law firm life now, and one key to remaining competitive is equipping both your lawyersand your staff with top-of-the-line hardware. Leasing can often make that possible.
Because of the financial flexibility, leasing also enables firms to custom-design technology solutions that specifically fit their needs. The cash outlay involved in purchasing equipment often acts as a kind of financial straitjacket: to manage your spending, you may end up with a very limited set of options. Leasing is different. Without the big upfront cost, you can custom-tailor your technology infrastructure to your firm’s exact needs.
Leasing also makes periodically upgrading your equipment easy. When the lease period expires, the leasing company becomes responsible for the old equipment, and your firm is free to lease newer models. In an environment where hardware becomes obsolete in a matter of months, this is a big advantage. Your firm will always have the best equipment because it can afford to.
Maintenance becomes a non-issue as well. When you own equipment, if something goes wrong, repair or replacement is the firm’s problem, as are the bills that arrive. When you lease equipment, it’s a different story. The leasing company is responsible for maintaining and repairing its equipment, and the burden and cost of keeping critical equipment humming is their problem, not yours.
The bottom line? Law firms are not in the business of owning assets. They’re in the business of generating and distributing revenue. It’s a very dynamic business environment, with a lot of variables in play that more conventional, asset-based business don’t experience. Key partners or practice groups can leave, taking revenue with them. Clients can demand concessions on rates or decide to take work in-house. New regulations or market entrants can completely change formerly stable areas of practice overnight. A major piece of litigation may require financial, personnel, or other resources the firm hadn’t planned on. There is less and less margin for error, more and more competition, and a need for the firm to be agile as well as swift.
Leasing can deliver that agility. The days when firms could succeed through tradition, relationships, and ever-growing demand are over. Instead, firms need to equip their lawyers with top-of-the-line equipment. They need to manage their cash flow and spending carefully. They need to be able to change strategic direction on a dime, when the situation calls for it. They need to devote time, energy, and attention to clients, not managing inventories of computer hardware. And they need to focus on practicing law and developing business. Leasing can help them do that.