Have you ever tried to calculate how much time you spend on your law firm’s financial health? Lawyers watch billables,
The financial health of the firm doesn’t end when the bills hit the door each month. Expenses, client entertainment, health insurance and the cost of employees impact the firm’s finances. The biggest cost to the firm is often the loss of a key lawyer. When such a lawyer leaves, the other lawyers must then identify a replacement and spend time vetting candidates. Time spent replacing lawyers doesn’t even calculate the emotional cost of change to the firm.
I recently took a look at the number of hours I devote to our firm finances on a monthly and yearly basis. It’s an exercise I encourage you to try. I’m willing to bet that at the end of next month you’ll be surprised by how many hours you devote to the firm’s finances. I am not suggesting that you curb the amount of time spent on financial matters.
We begin our Finance issue with Larry Bridgesmith’s “Collaboration Is the Future, Not Competition,” in which he argues that unresolved conflict in the workplace is expensive and that lawyers need to foster collaboration as one means to offset that expense, as corporations have done. Jeff Shavitz follows this up by noting that if you’re not accepting credit cards or other alternate means of payment, you’re likely losing profits in “Legal Payment Processing Must Change.” In “A Novel Approach: Subscription-Based Legal Services,” Steve Best discusses how a client subscription for legal services, a flat rate paid monthly, can serve both the needs of clients and provide a steady stream of income for the lawyer or law firm. Ariela Tannenbaum, in “Understanding Your Firm’s Real Financial Condition,” provides an in-depth guide for gathering salient data above and beyond accounts receivable, billable hours and collections to maximize firm profit. Ian Hu follows that up with an investigation of in-house fraud and how it may be reduced in “An Inside Job: Unearthing Fraud in Law Firms.” Finally, Kathryn Scourby delineates “A Disaster’s True Costs and How to Mitigate Them.”
I’d also like to thank Joshua Kubicki and Kim Craig for contributing to the Highlights column, while Katy Goshtasbi signs in with the first of her Perspectives columns as the new Law Practice Division chair.
Heidi A. Barcus, Editor-in-Chief
Thanks to our Issue Team: Steven J. Best, George Leloudis and Anna Rappaport