Law Firm Budgeting – Creating a Financial Budget for 2015

Question:

I am the managing partner of a 12 attorney firm in Springfield, Illinois. We have never had a financial plan or budget but I have been thinking of creating one for next year. I would appreciate your thoughts as to whether the time invested in putting one together is worth the effort.

Response:

I believe that successful firms:

Are focused
Have a sense of where they have been and where they are heading
Have a vision and a strategy
Have business and financial plans
Have goals and measured attainment
Foster accountability from self and others
Are proactive
Work the books and aggressively managed and balance the RULES (Rates, Utilization, Leverage, Expenses, and Collections)

Lawyers that fail to focus their practices; set goals, measure accomplishment, and foster accountability will fall short and not meet their financial objectives.

Attorneys need to begin focusing their practices, setting firm and individual performance goals, measure accomplishment, and implementing systems to instill accountability from all members of the team – attorneys and staff alike. Budgeting is a tool that can help you measure goal attainment and how well you are doing.

What is measured is what gets done

With budgeting law firms and attorneys can:

Reduce worry and stress at home and at the office
Improve productivity and profitability
Increase accountability – yourself and others
Focus the practice
Improve balance between personal and professional life
Maximize practice value for eventual practice transfer/transition

Keep in mind that budgeting entails both financial and non-financial goals.

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John W. Olmstead, MBA, Ph.D, CMC

Posted at 08:08 PM in Financial Management
Tags: - Creating, a, Budget, Budgeting, Financial, Firm, for 2015, Law

Nov 11, 2014

Law Firm Budgeting – Creating a Financial Budget for 2015

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