On a recent webinar panel session I spoke to three finance leaders from Katchr client firms about their experiences to date in responding to the current crisis. I was keen to understand how things had changed in terms of financial priorities, new approaches or tactics being adopted, and how performance management was being handled in a remote working environment.
Financial priorities, it turns out, have not changed much. Or at least not in these three firms. Good financial management does not look much different in good times or bad. In a well-run law firm, the standard measures of success remain the same: recording the hours, billing those hours, getting paid, and replenishing WIP with new instructions.
So what has changed? Certainly the phrase “cash is king” has never been so popular. Whilst the 4 measures above might remain the ingredients of success, the overall objective has now firmly switched from profit to cash. At least in the short term. And the key to maximising cash is of course speed – reducing that WIP to cash cycle time. More emphasis on assessment of risk, stricter requirements for cash in advance, more interim billing, and fee earner accountability for debt are all elements of tighter lockup management we are hearing about.