As a legal CFO or a law firm financial director, you tremendously influence your firm’s bottom line by targeting the lines above it. You can’t wave a magic wand to increase revenue, but you can help your firm achieve its financial goals by making profitability every lawyer’s responsibility. Here’s how to set the stage for success:
Support pricing strategy in the legal buying process.
Law firm pricing specialists improve the legal buying process for clients who are increasingly demanding closer collaboration and more complex pricing options. To protect matter profitability, pricing specialists create budgets using evidence-based reasoning that considers cost, hours, staffing, billable rates, outcomes of prior similar matters, and other data-driven factors. Our recent survey shows:
Increasing lawyers’ financial awareness through training on matter profits and margins can aid the pricing team’s efforts to drive higher profits. But where do you start?
Regularly share financial data with lawyers.
First, require budgets for each matter and give lawyers instant dashboard access to each matter’s financial performance. Consistently communicate with regular reporting and enable groups to share ideas for delivering legal services more efficiently.
Information and collaboration encourage a sense of ownership and accountability, which is fertile ground for cultivating a culture of personal responsibility for each matter’s profitability.
Last year, our survey showed that 85% of NA and 80% of UK firms encouraged associates’ awareness of matter profitability. This year, figures rose to 94% of NA and 90% of UK firms, demonstrating the importance of expanding financial awareness to all lawyers, not just partners.
However, lawyers often rely on monthly and ad hoc reporting and post-matter analyses that reveal too little, too late. Real-time access to matter data eliminates blind spots and enables lawyers to avoid costly surprises now and in the future.
Responsibility for profits requires real-time matter visibility
Tracking a matter’s performance against its budget in real time reveals when to take corrective action, on what, today—and how to avoid repeating mistakes in the future. Lawyers get answers to questions like:
Yet, only 42% of NA and 32% of UK associates can access real-time automated reporting per matter, and profitability information is available to only around 20% of partners and associates in the US and UK—a lack of visibility that results in missed opportunities, inaction, and blown budgets.
Every lawyer in the firm can help you achieve your financial objectives by taking ownership of matter profitability. Get in touch now to learn how easily BigHand Matter Pricing can help you empower lawyers to make more profitable decisions.
A view into the importance of empowering lawyers with real-time, matter level information to maintain profitability in the face of rising costs and reducing demand: Findings from over 800 senior finance professionals in the UK and North America.