At the University of Texas School of Law's CLE eLibrary, Berger Harris client Peter Baldwin has published a paper on profit-maximization strategies for attorneys utilizing basic understanding of financial data: Baldwin writes:
Do you understand the difference between cash flow and profit? Can you read a financial statement? Would you like to improve the profitability of your firm? This paper is for those who excel at practicing law (or any other trade for that matter), but who would like to improve their financial management skills. Understand the How’s and Why’s of structuring an effective finance and accounting department and be introduced to tools and techniques to plan for, measure, and promote financial success.
If you are like many practicing attorneys in small law firms, which we define as those law practices with 5 or less attorneys, you are passionate about practicing law but may not be so passionate about administering your law practice. Your passion led you to law school; you probably didn’t go to business school. Your knowledge of running a firm is likely to be less a function of scholastic training and more a result of on-the-job training learned from personal experience (the school of hard knocks) or from other more experienced attorneys.
Our goal is to focus you on a simplified, common-sense structure that empowers you to leverage the full benefits of financial management while maximizing your time practicing law. Indeed, administering the business aspects of your law firm should not take you away from your ability to generate more revenue for your firm. The fact that you are successfully practicing law is impressive by itself but practicing law and running a law firm concurrently is even more impressive – and perhaps for some who are new at this, even intimidating.
My premise is that you are experts in your chosen fields and are looking for basic guidance – maybe some fresh ideas – from a financial professional like me. I am not expecting to ‘wow’ you in this finance presentation today with my professionalism and polish as many of you are very capable, polished presenters yourselves. You do not want me to ‘shock and awe’ you with an impressive litany of terms; rather, you would like to be equipped with practical knowledge that includes some basic tools and techniques to improve the management of your firm and create an environment among your associates that fosters financial success. I will strive to use basic terminology that is intuitive to you and purposeful for your firm.
A free preview of the paper, "Maximizing Your Firm's Profit with Better Financial Data," can be downloaded at the CLE e-Library website, and the full paper is available for a fee to non-members.