In Notes 8.5 you can automatically compress images pasted into documents.  Note that bitmap (.bmp) images that are imported into a Notes document are compressed; bitmap images that are pasted into a Notes document are converted to .gif or .jpg format.

Choose “File -> Preferences -> Basic Notes Client Configuration”, and then choose the appropriate setting under ‘Additional options’

The Notes 8.5 Release Notes says that the setting is selected by default but in the beta it isn’t!