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Can FM add value to the bottom line
Corporate Law firms are under increasing pressure to find business from a shrinking pool of opportunities. The economy, whilst displaying early signs of budding, has depressed the volume and scale of fees that Law firms have billed in the past. As a result of this we are seeing a new focus on non- core business activities, back of house support costs to ensure not only there is parity between supply and demand but more essentially they operate in the most cost effective manner. Several Law firms are undertaking strategic reviews for all non-core business activities. Managing Partners are recognising that with fees being reduced that non-core business activities are costed at the right level and any savings are maximised.
Along with the cost concerns it is essential that service quality is not affected. The prestige value and brand representation of corporate law firms still needs to be reflected in their premises and working environment. Combine this with the natural requirement of law firms to transfers risk, then now is the time to look at creative ways of delivering non-core services such as Facilities Management.
In our experience many Law firms may not know what the current cost of Facilities Management is having on the business. In most cases it has not been a concern. Yet given that FM costs on a typical 200,000 sq.ft. building can be between £2M - £4M (excluding rent and rates) – not to have an handle on this does not sit well. We have also found that where companies do have a good analysis of the cost, the service delivery standards, quality and commercial contracts can be over specified.
What can be done?
- Understand where you are now in comparison to peer group organisations.
- Identify options for change that can unlock costs, risk and provide greater flexibility for business changes.
- Implement either a re-engineering or outsourcing programme that will deliver value in to the business.
Can FM add value to the bottom line?
In our extensive experience we have successfully implemented processes that have provided cost savings. Typically these can be in the region of 15% to 20%. So if the FM budget ins say £3M then the potential savings to the bottom line can be in the region of £0.5M. How much fees do you need to generate to add that to the bottom line?
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