A law firm’s finances are its lifeblood. In the end, if your new firm brings in more revenue than it sends out in expenses, you’ve got a chance.
But knowing your financial goals, and how to reach them, often vexes lawyers.
What kinds of things should you measure?
What kinds of reports should you monitor regularly?
How do you know if you’re on a solid financial footing, or if your foundation is a bit quavering?
Law Firm Finance on Lawyerist
Here are a few best practices you should shoot for when it comes to your firm’s finances:
- You have a documented long-term financial strategy and profitability model that aligns your short-term budgets and reports with your firm’s long-term goals.
- You have access to sufficient capital and cash-flows to fund your firm for the foreseeable future.
- You follow written budgets and regularly monitor consistent financial reports and financial key performance indicators.
- Your invoicing, payments, and collections systems are focused on your clients’ payment preferences so they will pay their bills on time.
- You pay yourself a consistent market-rate salary, separate from bonuses or distributions, and you are investing an appropriate amount towards savings and retirement.
In this “Law Firm Finance” hub, we’ll talk about financial strategy, budgeting, and bookkeeping. We’ve got resources on credit card processing, taxes and accounting, and outsourcing your bookkeeping. And we’ll nerd out on financial reports, IOLTA accounts, funding your law firm, and time, invoices & collecting.
Along the way, we hope you’ll figure out how to turn your law firm’s finance function into one of your superpowers.
So, let’s dig in. Thanks for stopping by, and we’ll see you around the Lawyerist ecosystem!