Forefront Forefront

Cash Flow and the Strategic Advantages of
Leasing Technology, Software and Equipment

By CoreTech Leasing

Harvard Business Review author Rita Gunther McGrath suggests that in the new economic climate decision makers should focus on positioning companies to remain flexible and agile, shortening those decision cycles in order to position themselves competitively. This is true both for enterprise and law firms as law firms, now more than ever, are beholden to think, move and behave within a business model. Leasing technology, software and equipment is a strategically advantageous option leveraged to provide key elements of the flexibility and quick decision making necessary to thrive in this fast-paced market.

A striking advantage of leasing software is that doing so can provide not just 100% financing of the software but also 100% financing of the associated soft costs including services, training and implementation. Additionally from a financial point of view, leasing is a strategic option utilized to provide a monthly expense versus a total cost purchase. Leasing a $1 million software platform for a firm wide rollout, for instance, can be converted to a monthly expense. This can be a beneficial strategy because converting that $1 million to the monthly expense conserves cash reserves, keeps bank lines of credit open for short-term use, and cuts the out-of-pocket costs for software upgrades while still enabling new projects on the budget.

Stinson, Morrison and Hecker LLP is a highly regarded national law firm with more than 300 attorneys and 375 support staff located in 9 office locations and is a client of CoreTech Leasing. One of the firm’s decision makers Doug Doerfler has been with the firm for 14 years and serves as Stinson’s Chief Financial Officer, responsible for all banking and financing for the firm. We spoke with Doug regarding some of the strategic benefits he achieves for Stinson by leasing the firm’s technology, software and equipment procurements.

First off, prior to leasing its technology, software and equipment needs, all of Stinson’s software and hardware was purchased and/or financed through vendors or banks. However, when Stinson wanted to manage cash flow and match expenses to cash as best as possible firm wide, Stinson turned to leasing. Doug says, “Bank financing was more expensive at the time and limited our firm’s ability to draw on our line of credit. Vendor financing was extremely cumbersome and the terms were less than ideal.”

With regard to the key persuasive elements of leasing Doug continues, “It’s about cash flow. With leasing, there are no large outflows of cash during the year. Leasing allows us to keep the payment stream/cash outflow steady. On the partner side, since leasing does not drain our cash reserves, this allows us to make partner distributions on a regular basis throughout the year and the partners really appreciate that benefit.”

Leasing can also be strategic from the IT viewpoint as it offers an avenue to provide companies with top-of-the line and current technology and software at a fraction of the purchase price, can provide for 100% financing plus services (not just hardware) as well as for cyclic software upgrades. Leasing also frees staff from the burden of disposing of outdated equipment and ensures access to the most current IT tools, software versions and eliminates higher maintenance costs for older equipment. These advantages were persuasive for Stinson as Doug remarks that, “The ability to selectively choose which items to return, keep or extend the lease are benefits for Stinson. We also do not dissipate valuable staff hours to find buyers for equipment that is no longer needed.”

Additionally on the IT side, leasing allows IT departments to proceed with projects outside the company’s current budget or move future projects forward in anticipation of additional budget approval in an upcoming period—all the while reducing the risk of ownership.

When selecting a lessor, keep in mind the three types you will encounter: the manufacturer (captive) lessor, the independent lessor, or banks. With captive lessors, the majority of these leases are for manufacturer-specific products and may impinge upon your company’s desire for customized solutions and many times discounting between parent and captive is hidden. Banks have no allegiance to a specific vendor; however, the bank may not have the technology expertise that would make them a resource throughout the lifecycle of the lease. Independent lessors are in a unique position to take a consultative approach when working with your firm, and therefore, may be able to provide more flexible and customizable solutions for your firm’s unique set of concerns.

We recommend that any company or law firm interested in leasing reach out to their professional organizations for recommended lessors.  Review those recommendations and lessors that have provided leases for companies or firms of similar size and type and have managed lease projects of similar size to their full term. Doug remarks that, “Stinson knew the terms we wanted and most leasing companies were not flexible on those terms. That flexibility in the creation of the Master Lease was a key persuasive reason for our firm selecting (now) CoreTech.”

In the new, fast-paced economic climate, leasing technology, software, its associated softcosts, and equipment can deliver key flexibilities to assist your company retain its agility and responsiveness. It is important to consider the service capabilities, industry and technology knowledge capital, client references, and reporting and invoicing capabilities of any lessor your firm may choose to consider. Your lessor can be a strategic partner in your firm’s decision making; be strategic in your selection of your lessor.

CoreTech is an independent leasing company working in strategic partnership with enterprise decision makers over 100 of the nation’s most distinguished law firms to optimize their technology leases ranging from $50,000-$10,000,000. For more information, please visit, follow them @CoreTechLeasing, and like them on Facebook.


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