publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/395170
WHAT ARE THE RESULTS TELLING US? The survey results show the majority of firms are invested in cost recovery strategies in one form or another. Typically, firms that take a leadership position on cost recovery are the ones which, no surprise, benefit the most financially, operationally and strategically. Let's take a look at some key data points from the survey: • Copying/faxing continues to die with 56% of firms reporting declining copy volume. The recovery of color and black and white copies is remaining stable with net realization in the 40% range. "Net realization" is what the firm actually collects after billable/non-billable designation and internal and external write-offs. • Print/scan cost recovery remains solid and will continue to be the biggest facet of recovery. Color and black and white prints are also remaining stable on the net realization front. 44% of firms that responded are reporting an increase in print volume, while 43% are reporting an increase in scan volume. • The death of legal research recovery is premature, but it is on the ropes. 92% of firms that responded to the survey are still recovering legal research, but the net realization is the lowest since the survey started in 2004. ILTA WHITE PAPER: OCTOBER 2014 WWW.ILTANET.ORG 45 COST RECOVERY STRATEGIES THAT WORK 33% of firms surveyed are recovering electronic data storage, up from 20% in 2012. • Hard costs continue to lead the pack. The recovery of hard costs (vendor invoices) continue to lead in the area of net realization. • Electronic data storage sees a substantial increase. 33% of firms surveyed are recovering electronic data storage, up from 20% in 2012; however, internal attorney write-offs continue to be an issue. STRATEGIES THAT ADDRESS THE DATA GET ON THE PRINT AND SCAN RECOVERY BANDWAGON An excellent example of a firm recently repositioning their cost recovery strategy is Armstrong Teasdale of St. Louis, one of Missouri's largest law firms with 250 lawyers. This is a successful tale of a firm getting on the print recovery bandwagon, taking positive action based on their firm's goals and unbiased market data. Upon an analysis of all the firm's support services operations and cost recovery strategies against industry benchmarks, Armstrong gained a keen interest in an opportunity to recover printing costs. Lou Lizarribar, Executive Director for Armstrong, commented about his firm's experience expanding their cost recovery efforts, "Based on the benchmarks, this was something the majority of our peer firms were doing and we were not." Armstrong projected a 100% increase in gross monthly billable cost recovery revenue from print capture. This was exceeded with ease. "People have been very accepting of the new program," Lizarribar reported. RIDE THE HARD-COST TRAIN WHILE DECREASING OVERALL COSTS In the area of outsourcing, law firm COOs are taking a hard look at the structure of their onsite support services model, asking such questions as: • Are all current hours of operation necessary? • Should we staff each support area the way we have in the past? • Is there an easier, more cost-effective way to provide services without negatively impacting service levels or end-user satisfaction? • Is there a way to structure costs so they are not as easily written off both internally and externally?