Want To Have A Record Year For Your Law Firm?

Admin — Mon, 18 Sep 2006 17:50:40 GMT

Put a plan in place to reduce the time it takes to bill for services. Couple faster billing with deliberate collection efforts, and law firm partners will enjoy a record income year.

On average, 148 days pass before payment for legal services is deposited in the law firm’s bank account. That is almost half a year’s worth of fees. Based on the 2005 Juris Law Firm Economic Survey, the typical midsized law firm takes 72 days to put a bill in the mail. Another 76 days elapse before that bill is collected.

Because most law firms use the cash method of accounting, neither work in process (unbilled fees) or accounts receivable (billed but uncollected fees) appear on the law firm’s balance sheet. Combined, these represent the typical firm's largest asset.

Law firms don’t pay enough attention to cash flow in a systematic way. They aren’t in tune with the value of unbilled fees and uncollected cash, especially when cash flow seems consistent with past patterns. If you don’t get the bills out quickly and accurately, your firm is going to perform poorly relative to what the outcome could be. Slow billing and collection appears to be a problem with firms of all sizes and across all levels of performance.

There is no justification for slow billing. How do you speed it up? Start the process by asking your accounting and administrative staff for a plan to do just that. Work with them to finalize that plan. Support that plan. Give them objectives (targets) based on their approved plan. Measure performance against those targets. Recognize and reward their accomplishments. Hold people accountable (including partners) for their role in the plan.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Leverage Rules When It Comes to Partner Earnings

Admin — Tue, 22 Aug 2006 17:49:17 GMT

A picture says a thousand words. The above chart based on a soon to be released Juris, Inc. survey of 2005 law firm financial performance confirms, once again, the important role that leverage plays in determining law firm partner earnings. The first quartile represents the top 25 percent of midsized law firms as measured by per-partner income. The first quartile earned more than twice the per-partner income of the next highest group. That top segment of law firms earned more than eight times that of the lowest quartile.

By now, the impact of leverage in determining per-partner earnings is well known and understood. So, it is surprising that 75 percent of midsized law firms are not successively implementing the strategy.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Make More Rain : leverage, cash flow issues

Want To Have A Record Year For Your Law Firm?

Leverage Rules When It Comes to Partner Earnings