Getting Started: Analysis & Cash Flow
This firm had experienced difficulties with its IT systems in extracting useful, accurate and meaningful management information. Therefore our first task was to work with the firm’s management and the accounts team to make sense of where they were, and what they wanted to achieve.
We established that a key area for performance improvement was in cash flow management, and we set to work on this project in mid 2009. Like many firms, turnover and profits had grown through the good years, but balance sheet management had not been a priority
The impact of the initial cash flow project in terms of ‘low-hanging fruit’ was considerable, and the firm’s management commented that it would have been highly noticeable had the project not been implemented. This eased the pressure on the firm’s facilities, in the midst of a tough economic situation and a perilous market for legal services.
Getting to the Core – Months 3-6
As with many of our clients, some education was required with regard to the benefits of strong financial management and performance management – despite being a firm of highly successful, professional lawyers with an extremely capable support team. The remit here extended right through the firm, up to partner level, especially as it became clear that some had not received the requisite training in financial management for many years.
This sparked a turnaround in attitudes and performance across the board, and enabled the firm to get firmly on the ‘right track’. In this phase, we helped to recruit an experienced management accountant to help ensure that things remained on course.
Ongoing Support for the Law Firm Management
This stage in the relationship involved ongoing business ‘Pipeline Performance’ measurement and management, to help management to monitor performance at all stages in their Pipeline. Specifically, we launched a project along these lines with the Personal Injury department.
We helped the members of the team to establish and learn the key processes in managing their financial Pipeline, and together we set ‘standards’ (as opposed to ‘targets’) to which all agreed to adhere.
Having assessed various aspects of Individual performance, we persuaded the firm to put the most capable managers (not necessarily the most senior partners) in positions of responsibility. This worked well at all levels – some partners were relieved to have less responsibility for managing staff, and thus more time for managing clients!
The Business Pipeline and Financial Management
Our ‘Pipeline Performance Report’ became the basis for the ongoing measurement, and therefore the continued improvement, of the Personal Injury department’s financial management and overall performance. This had a particularly positive impact on the department’s cash flow. We also helped the team to integrate a new IT system, which became an ongoing process of learning and improvement.