“I don’t think the current pandemic has been the trigger for finance functions in the legal sector to change. The real change came in the financial crisis of 2008/09, when perceptions changed and the finance function was finally recognised for the valuable role it can play in driving performance,” says Nick.
“I joined ASB the day after Lehman’s went bust in September 2008, so I was straight in at the deep and. The things I did then – like regular conversations with banks, regular cashflow forecasts, working capital management, stakeholder communication, keeping a calm head – are the things law firm CFOs should be doing now.”
Nick suggests firms should be producing regular cashflow forecasts to help them navigate the crisis based on three scenarios: worst case, best case and most likely case, before choosing one to proceed with.
“Banks really want to see that you’ve considered all the implications of the crisis and what it means for the business, and see that your cashflow has been stress-tested to deal with these scenarios,” he says. “It’s the bare minimum stakeholders will be asking for during these times.”
He believes it is vital to review cashflow at least weekly, if not daily, given the drastic change in the economic environment.