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Law Firms - Managing for Profit

Law Firms - Managing for Profit

By Ashley Balls

CONTENTS

The success of a law firm is so often due to its management techniques. This book provides practical solutions rather than complex theory, identifying those operational areas where practical management strategies need to be applied. Many common practices are not cost effective. This common sense approach outlines the compliance and practice regulations of the various Law Societies state to state and across the Tasman, such as how to improve billings without hiring external management personnel or incurring new compliance costs.

Note: This book is an adaptation of Robert Mowbray’s Maximising the Profitability of Law Firms, 1997, Blackstone Press.


CONTENTS

Introduction

The Starting Point: Solicitors’ Accounts

Annual financial statements/ Partners’ management information/ Measuring a firm’s financial strengths/ Draft Balance sheet and P&L account

The Keys to Profitability and Rules of Thumb

Earnings of equity partners/ Significance of accounting policies

Business Plans: Development, Involvement and Understanding

Reasons why firms go bust/ Preparing a master budget/ Fee income budget/ Professional staff costs budget/ Overheads budget/ What happens when the budgets have been set?

The Mechanics of Profitability: Gearing, Chargeable Hours, Charge-out Rates, Recovery and Margin

Gearing/ Chargeable hours/ Charge-out rates/ Recovery/ Margin/ Gearing, chargeable hours, charge-out rates, recovery and margin: who influences performance?/ Utilisation/ Industry averages for gearing/ Industry averages for chargeable hours/ Industry averages for charge-out rates/ Industry averages for recovery/ Margin

Working Capital Control

Problems of finite capital/ Importance of work in progress and average debt age/ Cost of "special relationships" when invoicing clients/ Calculating true cost of credit/ Role of management information in working capital control

Investment Appraisal

Necessity for applying consistent investment criteria/ Methods of assessing capital expenditure appraisal/ Net present value/ Discounting future cash flows at different rates/ Asset control as key management tool

Management Reporting

Benefits of disseminating financial data/ Right information for right people/ Timely production of data/ Training of information receivers/ Draft monthly information sheet

The Development of Personal and Management Skills

Introduction/ Significance of partners’ management skills/ What specific skills are needed?

The Role of Client Care in Profitability

Reviewing reality/ Internal communications/ Attending seminars/ Training partners and staff/ Pricing/ Marketing methods

Tax Planning: Keeping the Profits

Work-in-progress valuation/ Borrowing/ Service companies/ Retirement planning in solicitors’ partnerships/ Tax management/ Identification of non-professional or trading income/ Bank interest/ Directorships/ Rental income/ Capital gains tax/ Inheritance tax and estate duty

Conclusion

   

Published February 1998
Publisher The Federation Press
Paperback/160pp
ISBN 9781862872806
Australian RRP $38.50
International Price $35.00
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Law - Legal Profession / Legal Practice
Management & Human Resources


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