The Hidden Costs Within The Cashroom?

There are lots of reasons that a law firm may look to Outsource its Legal Cashiering. There is no single rule, every law firm is different. In this article, we highlight the key reasons below and also provide a calculator (using verifiable UK average statistics) so you can work out the cost savings specific to your legal practice.

The key reasons a law firm may look to Outsource its Legal Cashiering?

What other costs should be considered?


Legal cashiers are an invaluable asset to law firms however finding a good cashier can be a full-time job in itself, one that can prove costly, especially when employing recruitment agencies. According to the Institute of Legal Finance & Management 2021 Legal Accounts Salary Survey, the UK average salary for a legal cashier stood at £23,500. But that is only one part of the picture, there are many other costs to consider when calculating the actual cost for employing or supplementing your existing finance team? Typically a legal cashier will work within a firm’s finance team and will be tasked with processing account transactions and ensuring compliance and adherence to the regulators accounting rules. We are also fully aware that a legal cashiers time may also be utilised to manage the office or deal with HR. We take this into account within our calculator which allows you to select the percentage of work directly related to the cashroom process.

Recruitment

If you are using a recruitment agency the average fee is 15% of the legal cashier salary. Based on the UK average salary for a legal cashier (outside of London) at £22,500 this equates to £4,275. Of course, there are still additional induction costs that we are not going to consider, such as, training, deferred productivity, key fobs, parking permits etc.

Salary Costs

With employer national insurance currently at 9.7% and auto-enrollment contributions sitting at 3%. Taking the legal cashier salary into account this equates to £2182 per annum for national insurance plus £675 per annum for auto-enrollment. Depending on your law firm you may need to take into account other salary-related costs such as private medical insurance.

Licenses, Software and Expenses

In terms of overheads, Lambert Smith Hampton Total Office Cost Survey 2021 suggest that the cost per square foot to host a team member in a 20-year-old building is £71.19 taking into account rates, IT, insurance phone and energy costs. A generous allocation of 100 sq ft per person allows 50 sq ft for desk space and another 50 sq ft to accommodate room in communal areas such as meeting areas and kitchens. If we go with the lowest allocation at 50 sq ft this works out at £593.25 per month.

IT, HR and Management

A 5% of salary cost apportionment should typically be taken into account to cover IT, HR or Supervisory costs. Based on our UK average salary, this would cost another £187 per month. Of course, not all of these costs will apply to your legal practice, i.e. you may not require a recruitment consultant. You can easily adjust these numbers within our calculator to get a customised cost estimate specific to your law firm. We have preset the calculator defaults based on the industry averages outside of London.

Use the calculator below to work out the hidden costs specific to your law firm?

Outsourcing also means that you have access to a pool of resources.

Making your law firm more agile.


By utilising an Outsourced Legal Cashiering service, you can eliminate several cost layers because you only pay for the services you need – when you actually need them! With access to instant on-demand services you can easily scale up, or down, as your business demands, or the economic climate changes. This doesn’t only apply to the core business functions, we offer a full range of professional services that your law firm can tap into at any time. If cashflow is an issue you can switch on our credit control service, if you have unexpected absences or holiday cover requirements, you can instantly bring in additional resources from our team of legal cashiers. If compliance is your concern we can conduct mock regulatory inspections twice per year.

Outsourcing brings a team of highly skilled and experienced legal cashiers to your legal practice.

Instant access to a dedicated team.


Taking up an Outsourced cashroom service gives you access to more than just a named Legal Cashier – you gain an entire team. Our aim is to establish excellent relationships and provide a friendly, professional solution for your practice. You would have your own designated team consisting of 2 experienced outsourced legal cashiers working remotely. You will get to know them just as if they were working inside your office. We communicate with you by predefined secure channels ensuring they act on your instructions in real-time.

Outsourcing means you no longer need to worry about sickness or holiday cover.

Holiday, absence and emergency cover.


When you outsource the cashroom process you will have a dedicated backup cashier so that cover is automatically provided when individuals go on holiday or are absent.
If you have an in-house cashroom we can also offer Holiday, long term absence and emergency cover with short-term contracts. We can pick up from your own cashier and, using the same processes and procedures you are familiar with, we will ensure continuity of service provision.

Outsourcing will help you avoid financial and reputational damage by minimising disruption.

Business continuity planning.


Despite major disruptions such as fire, flooding and terrorist or cyber-attacks, your clients will expect you to be available when required. Having a business continuity plan ensures that, following a disruptive incident, your law firm can continue to deliver its services at normal levels. It will identify potential threats and provide a simple framework for an effective response should any interruption take place. As part of your Business Continuity Plan (BCP), outsourced legal cashiering ensures that your cashroom can continue to operate in the event that something happens to your legal practice.

Thank you to the following resources for making this article possible:

Institute of Legal Finance & Management 2021 Legal Accounts Salary Survey.

Providing up to date salary information for legal cashiers, assistant legal cashiers, senior legal cashiers, cashier supervisors and head cashiers from their Legal Accounts Salary Survey 2021.

Lambert Smith Hampton Total Office Cost Survey 2021

Providing up to date detailed information on office costs for over 50 UK locations from The Total Office Cost Survey (TOCS) which is the most definitive independent survey of its type.

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