Cash Flow Management for Law Firms, 2nd Edition

This report addresses a wide range of issues in the cash flow management of law firms, covering factors which apply to all businesses, to the whole legal sector, to specific firms, and even to individual departments and work types within firms.

Additional taxes may be applicable

Details

  • Publication date: December, 2013
  • Pages: 173
  • ISBN: 9781783580798
  • This book will develop SRA competency:

Description

The legal market is changing rapidly. There is opportunity out there for those firms who are positioned to take advantage, but, for many, the investment required to rebuild after several years of austerity is a big ask. Both in the UK and in the US, there is evidence that law firms have paid almost all of their attention to profitability and PEP rather than to cash flow and balance sheet strength. There have been a number of well publicised insolvencies and significant attrition amongst the very smallest firms such that the number of firms in existence at the end of 2013 is less than it has been for several years – but there have not been the mass failures which were then predicted.

The Solicitors Regulation Authority SRA has been expressing concerns about the issue of ‘financial stability’ for some time.  In mid-2013 the SRA introduced a RAG (Red, Amber, Green) rating system to assess the financial stability of firms and indicated that as many as 20 per cent of the top 200 firms could be showing evidence of financial instability.

Unique selling points:

  • This report has been completely updated to reflect the changes in the legal market and the financial issues that law firms are facing.
  • The report contains practical strategies for improving cash flow, including dedicated chapters on improving cash flow through: partners and communication; information and performance management; and techniques and processes.
  • The report outlines how to establish cash and lock up profiles.
  • It will help law firms to review current financial performance and identify improvement opportunities.
  • It sets out an approach for assessing funding requirements and for managing outflows.
  • It contains tables throughout to provide examples of performance tracking and financial information.
  • It provides advice on managing bank relationships and includes useful insight into how banks view law firms with contributions from individuals at NatWest and Lloyds Bank.
  • The report contains a number of case studies which show a range of approaches to the issues confronted and a new section of case studies which highlight what can go wrong.

Contents

Chapter 1: The context for cash flow management in law firms

Chapter 2: Key considerations in cash flow management

Chapter 3: Establishing appropriate cash and lockup profiles for teams and departments

Chapter 4: Reviewing current performance and identifying improvement opportunities

Chapter 5: Assessing funding requirements over different time periods

Chapter 6: Cyclical patterns and predictability of outcomes

Chapter 7: Managing outflows – Suppliers, disbursements, and periodic payments

Chapter 8: Practical strategies for improving cash flow – Partners and communication

Chapter 9: Practical strategies – Clients and staff

Chapter 10: Practical strategies – Information and performance management

Chapter 11: Practical strategies – Technique and process

Chapter 12: Funding structures – Matching funding to asset types

Chapter 13: Work in progress – Hero or villain?

Chapter 14: Looking to the future – Plans, forecasts, and resources

Chapter 15: Funding – Managing banking relationships

Check our Executive Summary and full table of contents here

Authors

Barry Wilkinson
Barry Wilkinson specialises in helping medium-sized law firms to improve their business performance – producing better results for partners, staff, and clients. In a varied career he has been a cost accountant, business lecturer, finance director, professional speaker, author and, for the last 20 years, a management consultant and business coach. Barry is best known as ‘one of the few non-lawyers who can make lawyers sit up and listen’, and for his ability to help law firms improve their cash flow, profits, and client satisfaction. His clients say that his key ability is to give them the confidence to tackle the real challenges which face firms today, and to get partners to move forward together. He has written many articles on legal business topics, and he was also the author of the first edition of Cash Management for Law Firms in 2009. Barry is the founder of Wilkinson Read and Partners, an executive committee member of the Law Society’s Law Management Section, and a former branch president of the Chartered Institute of Management Accountants (CIMA). For more information on Wilkinson Read, see the website or contact Barry via email.

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