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Five pillars of good financial performance
As accountants we’re often asked by law firm clients what should they focus on to drive financial performance? You’ll get different answers from different accountants but we focus on five key pillars.
There are a few really powerful benchmarking reports produced annually. Many highlight the profitability matrix, Gearing x Recored Hours x Hourly Rate x Realisation x Margin. It is simple and is one matrix firms can easily measure their performance against.
For example if a firm is underperforming against recorded hours is it because time recording is optional. If realisation rates are poor how may difficult conversations about fees are taking place with clients? Would formal pricing training help to scope work better and improve fee recoveries.