Making Room for Outlets in Drywall

Norm Abram's Best Tricks of the Trade III 

via This Old House

Q: How do I cut the holes in drywall to fit around outlet boxes when the receptacles are already in?

A: Typically, drywall goes up after the boxes go in but before switches and receptacles get installed. But because your receptacles are already in place, the tricks I'd normally suggest for locating drywall cuts—like using lipstick to outline the box—won't work. You shouldn't have to remove them, though, if you follow these steps. Just be sure to cut the power before you start working.
Step 1: Start by hanging the first sheets at the top of the wall. Place a level against one side of the box, overlapping the bottom edge of the drywall. Plumb the level and mark the drywall on the side that's against the box, as shown. Do the same for the opposite side of the box.

 Step 2: Measure from the top and bottom of the receptacle to the bottom edge of the drywall. Pencil those dimensions on the upper sheet for the next step. Now prop the bottom sheet of drywall in position against the studs and under the bottom edge of the first sheet.

Step 3: Measure down from the joint and mark the location of both horizontal cuts. Then use your level as shown to mark the side cuts. Pull the drywall away so that you can safely cut out the hole with a keyhole saw. When you put the sheet back against the studs, the outlet box should slip neatly through the hole.