Compensation systems play a significant role in influencing a law firm’s culture. The benchmarks a firm uses to determine compensation not only nod to the differences in the partners’ financial rewards and they also signal to a partner their value to the firm.

Every system should be unique to the strategic vision of your law firm.

A budget is a roadmap to follow and can help you and your firm meet your goals each year. A budget should be a critical piece of financial information prepared and monitored to ensure that partners maximize their profitability.

Cash flow forecasting is a mechanism to ensure that the law firm knows what is happening today, next week, and next month. Many cash flow projections are completed on a rolling 12-month basis.

Accounting & Billing is a core function in every law firm practice. To ensure that your assets are safeguarded, robust processes and internal controls must be in place. The five most common internal controls are segregation of duties, restricted access to financial systems, periodic reconciliations by another party, double-entry accounting systems and process standardization and approval processes.

Profitability is why we all are in business. However, some areas of our law firm may not be as profitable as others. The profitability analysis can include individuals, practice areas, industry types, or clients. Do you know if your billing rate contributes to profit? Do you have control over your expenses or do you have a top-line issue? A complete in-depth analysis of any or all of these factors will highlight the areas for improvement.

Existing Succession Plan:

• Does your firm have an existing succession plan in place? If so, describe it. If not, why not?
• What challenges do you and your firm face regarding a plan?

Anxiety About Succession Planning:

• What are some of the challenges for Older Partners in your firm?
• Do you have a mandatory retirement age?
• What are some of the challenges for Younger Partners?

Developing New Partners to be the Successor:

• How do you make your firm attractive to new partners?
• How do you build your staff into partners that can be a successor to an existing practice?
• Do you have a formal mentoring program in place?
• Do Partner Compensation Plans Drive Succession Plan Results?