Superior financial performance is the result of hard work and dedication to all aspects of a firm’s intellectual capital base and its strategy. Financial analysis is therefore at the heart of everything we do for firms in our consulting work.
In strategy, governance and strategic implementation engagements, we invariably carry out an overview financial analysis focusing on the issues that impact on profitability: utilization (how hard lawyers work), billing rates (the competitiveness of a firm’s rate structure), margin (how much revenue is available for partner compensation) and leverage (the firm’s ability to push work to the lowest cost level).
Such analysis is needed to enable us to advise firms on their financial planning and improvements to their economic performance. In particular we regularly
- Help firms to crystallize the financial issues that must be addressed to achieve increased profitability or to improve their cash base
- Assist firms to review or develop appropriate pricing strategies
- Highlight the options faced by firms in refining their business recipe and in planning legal and business process improvements
- Suggest improvements to a firm’s cash flow and to how the firm budgets and plans for a distribution pool of profit for partner compensation purposes
- Advise on partner performance management systems, their metrics and measurements, business intelligence and benchmarking
- Advise on financial alignment for firms considering mergers and affiliations
- Advise on best practice for financial management reporting by teams, practice groups and firms
- Carry out training and coaching in relation to financial competencies and on the improvement in time recording and time-keeping
- Operational Improvement engagement for a leading Practice Group of an European firm, the group consisting of 30 lawyers. This group had been experiencing increased international competition affecting the attraction and retention of both clients and talent, and performance had slipped as a consequence. During a six month retainer, we reviewed the group’s strategy, undertook a significant face-to-face client/referrer feedback process (some twenty clients and referrers), facilitated the groups business plans, helped tighten up time-recording, reviewed working practices and knowledge management and coached the group’s partners in leadership skills.