Building the 2027 Law Firm Budget: Are You Paying for Yesterday’s Operating Model?

As law firms build their 2027 budgets, the conversation inevitably turns to expenses. Where are costs increasing? Where can we save? And where can we become more efficient without sacrificing service?

The most important question is:

Are we still paying the right amount for the services we actually need today?

Law firm operations have changed. Print volumes have declined, workflows have evolved, and information continues to accumulate. Yet many operating expenses simply roll into the next budget and often with another annual increase attached.

Here are five areas worth a fresh look for 2027.

Outsourcing: Challenge the Status Quo

Long-standing outsourcing relationships can provide tremendous value, but that doesn't mean the economics should go unchallenged.

Review staffing levels, service requirements, management fees, overtime, equipment charges, and annual escalators against actual utilization.

The financial impact can be meaningful. On a $2 million annual outsourcing contract, a 7% improvement represents $140,000 per year—or $700,000 over five years. Even a seemingly modest 3% annual contractual increase compounds to nearly 16% over five years.

The answer isn't necessarily changing providers. It may be renegotiating, restructuring the existing relationship or introducing technology to better reflect how the firm operates today and how it can be more efficient in the future.

Off-Site Records: What's in Those Boxes?

Off-site records are easy to overlook because they're out of sight. Unfortunately, the invoices aren't. And when you call to get clarification, good luck.

Firms should look at both pricing and inventory. Are rates and ancillary charges competitive? More importantly, are you paying to store records that have satisfied retention requirements and can be defensibly disposed of?

Every carton appropriately removed eliminates a recurring expense (but you also need to make sure it’s taken out of your inventory charges.)

Output: Does Your Fleet Match with Who’s in the Office?

Hybrid work and digital workflows have changed printing and copying, but many firms still maintain output environments designed for much higher office occupancy and paper volumes.

Review actual device utilization, print volumes, minimum commitments, service costs, and lease expirations. Right-sizing doesn't mean making printing inconvenient. It means making sure you're not paying for equipment and capacity that nobody is using.

Office Supplies: Consolidate for Cost and Clarity

The opportunity in office supplies is significant. Yes, some people insist on a certain pen and flexibility must be built in, but economies is the way to go with standard items if possible.

Vendor consolidation, negotiated pricing, standardized products, freight charges, and off-contract purchasing all deserve attention - particularly if purchasing remains decentralized across multiple offices. You also have to take into account, that the spend has shifted away from office supplies and more towards snacks and hospitality. Your contract needs to reflect that shift.

The best program should make the cost-effective choice the easiest choice for employees.

Information Governance: Keeping Everything Has a Cost

In the legal market, I think the “keep everything” mindset is being recalibrated and firms realize that the more information, the more cost and risk.

Physical records require storage and management. Electronic information must also be stored, secured, searched, migrated, and eventually addressed.

A sound information governance program helps firms answer some basic but important

questions: What do we have? Why are we keeping it? How long should we keep it? And when can we defensibly dispose of it?

Good information governance isn't about indiscriminately getting rid of information. It's about confidently retaining what the firm needs and disposing of what it doesn't.

Look Beyond 2027

As you build the 2027 budget, consider the long-term value of operational improvements.

A sustainable $100,000 annual savings opportunity becomes $500,000 over five years before accounting for future increases. Find several opportunities across outsourcing, off-site records, output, office supplies, and information governance, and the financial impact can become significant.

Before carrying last year's numbers into another budget, challenge the assumptions behind them.

The goal isn't simply to spend less. It's to make sure your firm is buying what it needs, paying what it should, and no longer funding yesterday's operating model.