When a bookkeeper has been in business for a few years, she will start to see trends in her clients’ records. One of the big trends is how much is spent on fees of all types. Many of these fees are very high, and account for a large portion of the overall spending. Legal office books probably see an even larger amount of various fees than other industries because of all the tedious filing, bank account work, and case work that needs to be done. The great news is that many of these fees are completely unnecessary, and can be reversed or avoided altogether! Wouldn’t those $300-$2000 in monthly fee costs be nice to have for real needs instead?
1. Bank fees
Many banks are getting rich on standard fees alone. With the huge amount of banks to choose from, go with a one that offers a fee-free checking account. You probably don’t need all the extra bells and whistles they are charging for, so stick to the basics and save yourself $25-$100 a month.
While we are on the topic of bank fees, did you know you can talk your banker down on fees like ACH or Billpay options? Many times those fees can be deeply discounted or waived altogether with just one kindly worded request. Especially if you have several bank accounts open, you are considered a great client and they are willing to be flexible about those kinds of fees. Even late fees might be forgiven if you ask.
2. Credit card fees
Yes, your law office will need to have and use credit cards. But that doesn’t mean you need to spend thousands of dollars a year on credit card fees. Find a credit card with great interest rates, but more importantly, keep the card paid down to avoid ever paying interest. Don’t pay late, because late fees can add up as well.
Look at the fine print to discover fees that might pop up like paper statement fees, transfer fees, etc., and get the steps taken to avoid those as well. Digital statements are easy, quick, and clutterless.
3. Late Fees
Almost every business, subscription, or government service will charge a hefty fee if the payments are made late. Do yourself a favor and hire someone that will track bills and pay them on time or early. Not only will this save your practice from these costly late fees, but it will also build up your reputation as someone with promptness, respect, and character because you can be depended on to pay on time.
4. Government fees
Ah, the taxes an attorney must pay each year. Not to mention licensing fees, vehicle registration fees, and so much more. The government processes are often slow and cumbersome, but they don’t expect your law office to be the same. They want their taxes and fees on time. The late fees for filing taxes are often compounded with interest that accumulates very quickly. Be sure your filings and fees are done promptly.
6. Monthly subscriptions
As an attorney, you use multiple software programs that you have to pay for by month or by year. You might have an email hosting program that allows your entire staff to have customized email, a messaging system, connected phone plans, document formatting programs, and much more. All of these subscriptions add up quickly, but that cost can be reduced if you opt for a bigger subscription plan in the beginning.
Go ahead and purchase a year long subscription rather than paying monthly. Almost without exception, you will be offered a nice discount if you pay in large chunks rather than the seemingly low cost monthly plan. From time to time you can also research (or have a staff member do so) to find programs that offer the same service at a much better rate.
7. Payment Fees
One of your main goals as a hard-working attorney is to earn money, correct? Unfortunately, that is also the main goal of your bank or credit card company, so even as you receive your income, they are also earning part of it with their fees. When you receive money from a client, depending on how they pay you, the fee can be anywhere from a few dollars to a large percentage of the total amount earned.
Receiving money from credit cards seems to be the worst offender in fees. Credit card companies can charge up to 3.5% of the amount processed, leaving your office with less income just for choosing that option.
Yes, some of the other payment methods might take a day or two longer than a credit card, but they are much lower cost overall. Have your clients pay with a check, money order, or bank transfer, and keep more of those worked-for dollars.
If you are really trying to look out for the convenience of your clients and do decide to allow credit card payments, find the best program with the lowest fee per transaction. It’s amazing the difference in fees from say Paypal to Melio or QuickBooks.
8. Yearly Fees
Here is a great reason to take a careful look each month at your financial reports: you will see exactly how much your law office is spending on fees. By making it your goal to reduce or eliminate fees, you can see your profits go up without having to even get another client. Be sure to have a budget for those yearly fees that just can’t be avoided, so that you know when they are coming. Sometimes a fee comes at a bad time or at a lull in the profits. If that seems to be a recurring problem, work with the institution issuing the fee to get the date changed. No one is going to say no to an early payment!
In conclusion, try to be a big picture person, but also realize that the little things like fees will add up quickly. By taking a few minutes to prepare, you can avoid almost all of those pesky fees before they pop up on your bank statement. Then you can go out and charge your practice fees to others instead!
