The Effective Tightwad Lawyer
By Jim Calloway, Director, OBA Management Assistance Program

If you search Google for the phrase “Technology for Tightwads,” you get 81 “hits.” Most all of these are written by or for members of the legal profession. I’m not sure if that says more about our thriftiness or our ability to coin a good phrase. That title has been used for a group authored article in the American Bar Association’s GPSolo magazine in 2000 and a presentation at ABA TECHSHOW in 2002.

With the recent announcement of free legal research for Oklahoma Bar Association members through our new arrangement with Fastcase (see article on page 133) and with many facing holiday bills, it seemed like an appropriate time to discuss cash-conserving ideas. After all, one of the most important sage bits of advice I can offer to lawyers opening up a new law practice is “watch your overhead and try to keep it low.”

We did a program for the 2006 OBA Solo and Small Firm Conference titled “A Short Guide to Being an Effective Tightwad While Managing your Law Office.”

I started that program by referring to three clichés:

“You never want to waste money.”

“You get what you pay for.”

“Time is money.”

Lawyers appreciate all of these truisms, but are perhaps most directly connected to the “time is money” concept. Hourly billing, time sheets and externally-imposed deadlines drive this home to us again and again.

The solo or small firm lawyer, in particular, has much time taken up with administrative and other non-billable tasks. Larger firms have more administrative support for the lawyers, but the lawyer to staff ratio continues to shrink every year, even in these firms. Simply put, a good part of law firm management is now the balancing act of doing things yourself or paying others to do them for you. The advantage of doing it yourself is that it is done the way you want it to be on the first attempt and you have no out-of-pocket costs. The disadvantage is the drain on your limited time, which needs to be used to do billable work for clients. Obviously, hiring others involves both cost and supervisory duties.

So the successful tightwad has to incorporate the value of his or her time into any money-saving equation. One cannot just look at money alone. There is a balancing act between saving money and spending time in many cases. Saving $50 by buying the cheaper product is no bargain if that product costs an extra 15 minutes of lawyer’s time each day.

So the challenge for the lawyers seeking to economize is to not be, as Benjamin Franklin said, “penny wise and pound foolish.”

Most of us have a personal history of both overspending and underspending. I decided to draw upon the wisdom of the users of the OBA-NET for some tangible recommendations about being an effective tightwad.

Tulsa attorney Jody Nathan pointed out that the paid fax services can cost less than a business phone line. She said, “Myfax.com allows you to fax all over the country (maybe the world?) and you receive fax responses via e-mail. $10 a month includes 100 sent and 200 received pages.”

Kim Spady of Hinton likes faxing software: “I think WinFax is a great tool, both from a money-saving and time-saving standpoint. The fax comes through to the computer, so I don’t have to spend resources to print it if I don’t need a hard copy. I can send faxes from my computer, so, again, no paper and ink expense if I don’t need a hard copy.

Brande Kauffman of Norman suggested joining all frequent “whatever” clubs. She mentioned that for copying, OfficeMax has a Perks club, and the store will also give you a free ream of paper when you return your used printer cartridge to them.

A long time ago, technology consultant (and frequent OBA Solo and Small Firm Conference guest speaker) Ross Kodner told me to sign up for every frequent flyer and hotel rewards program you can. I did, but I don’t travel nearly as much as Ross. However, I got a surprise when checking into a Sheraton hotel recently. The ABA TECHSHOW is held at the Chicago Sheraton. I always give them my Preferred Guest number. When checking in at another Sheraton, I gave them my number. The clerk announced that I had achieved Gold status. My room was upgraded to a different floor with access to a lounge, free breakfasts, free bottled water in the room and other complementary services.

Brande Kauffman also noted that the barter system can be a great benefit in the right circumstances. She cautions that you need to document these agreements in writing. Others responded that you need to be aware of the tax consequences of barter arrangements. It is best if the agreement sets a value for the services and/or products to be exchanged.

Oklahoma City lawyer Ken Felker said we should be on the look out for and take advantage of discount coupons and offers at office supply places like Office Depot, He bought a printer using a 15 percent off coupon, which resulted in quite a substantial savings. The coupon was only good for one day. He also noted that entering into cooperative agreements with other lawyers in other cities to do routine filings and court appearances for each other on a reciprocal basis can save time and gasoline.

Mark Robertson of Oklahoma City said his favorite tightwad trick is to use an older printer for drafts and load it with previously printed paper (using the back side). Please note that he dedicates an old printer to this. If you do it with your only printer, M.C. Smothermon noted that the ink may transfer to the paper feeding wheels in the printer causing black marks on the backs of documents. This idea generated several comments with the consensus emerging that it is really a waste of money to use expensive bond paper for pleadings that just sit in a court file. Many think bond paper is waste of money for anything except perhaps wills, trusts and other similar documents.

John Wylie from Norman said, “I just bring home the ‘junk’ printed paper (superseded drafts, etc.) and let the kids use the reverse side for painting, drawing, etc. Of course, you have to be sure you aren’t bringing home anything with sensitive information, etc.”

Randy W. Henning of Norman mentioned cutting the used paper in half or quarters and stapling or clipping in the corner to create do-it yourself notepads.

Oklahoma City’s Valerie Williford said, “Office share with a lawyer or group of lawyers who provide free Internet service, fax, copy machine, etc.”

Carolyn Smith, frequent OBA-NET contributor from Ponca City, said, “Don’t buy into the accountant’s hype that the more you spend, the more you can write off your taxes. If I don’t spend it, I don’t have to earn it.”

Someone told us that Oklahoma City lawyer Jeff Lynch used to be the business manager for a small business. He always bought cheap pens (a dozen for 99 cents) because he found no one wanted those, so he didn’t lose them as often. I disagree with Jeff to a certain extent. I like ordering pens in bulk with the firm name and phone number printed on them and hoping that people take them with them. It is a cheap marketing investment.

That sparked another thought from M.C. Smothermon: “By attending the OBA Annual meetings and OBA Solo and Small Firm Conferences, I have managed to keep myself well-supplied with pens, markers, notepads and numerous other assorted goodies. All that, plus CLE and fellowship too.”

Obviously, shopping online can be good for saving money. I made good use of Google’s Froogle during the holiday season and we had several Amazon boxes to discard after the holidays.

Kurt Pfenning of Norman noted that he often goes to lawyer’s estate sales: “You can get some very cool vintage office supplies at estate sales like real copper file tabs and deco staplers. If you must use bond paper it sells for about 10 cents a ream at those sales because nobody else wants it.”

Of course, the area where I feel that some lawyers are often “penny wise and pound foolish” is in the failure to invest in law office technology infrastructure. The primary activity of law firms in most all practice settings involves the processing of information with preparation of documents, reports and memoranda. Lawyers who do not personally use computers think they are being thrifty by continuing to use Windows 98 well pass the time it should be retired. But they may not appreciate how frustrating this is for their staff and how productivity is hampered using a system that takes forever to load documents or crashes several times a day. I’ve had more than one secretary or assistant tell me that having to work on outdated computers was a significant factor in choosing to find new employment. This is especially true today when a new computer costs several hundred dollars rather than several thousand dollars. You should be able to compute the cost of having your well-paid staff waste 30 or 40 minutes per day.Having proper software is a similar area of concern. I often hear from solo lawyers that they simply can’t afford a $400 or $600 practice management and billing software package. To those who are true solos with no support staff, I have to deliver the message that they can not afford not to have this.  Having practice management software is like having a virtual assistant, except that you can purchase it for less than what you’d pay to get a good assistant for a month. Your practice management software can help you stay organized by keeping track of numerous bits of information for you.  The same is true of billing software.  The lawyer who keeps his or her time records contemporaneously by typing them into billing software has a much easier job getting the monthly bills out than the lawyer who is contending with many scraps of paper or incomplete records. The effective tightwad recognizes that investing in proper tools and training can be the thriftiest long-term approach.

I recently used the term tightwad several times at the New Lawyer Experience program. On one of the evaluation forms, someone wrote that he or she didn’t really appreciate being called a tightwad, but truly “just didn’t have the money.” I hope that person is reading this. For those of us who are only partially successful at thriftiness, we tend to view the term tightwad as an aspirational goal and not a pejorative insult. “It’s all good.”

So in closing, let’s all try and remember Carolyn Smith’s words of wisdom: “If I don’t spend it, I don’t have to earn it.”

Originally published in the Oklahoma Bar Journal Jan. 13, 2007 - Vol. 78; No.02