Has there ever been an era where the practice of law was more risky than right now? So many things must be keeping lawyers up at night, and the even trickier bit is that so many of the risks are interlinked.
Think of it this way- a firm has a costly team of management, fee earners and support staff. One of the most obvious risks is “can we win sufficient work to pay everyone and make a profit?”
But leading on from that- is the work we win good quality? Is there a risk that we are in a sector that has ever decreasing margin? Or is it a sector where a huge amount of very high quality work can be done, but there may be a long tail before billing can happen. Cashflow risks right there!
Is the work of a type that is under threat from technological solutions? Or even just capable of being made more efficient by the introduction of technology which you don’t have but your competitor down the road does?
Even if you have great work for your fee earners to do, those same people are highly prized assets and in the days of hybrid working models they can be constantly targeted by competitors with better deals or working arrangements.
Your internal non-fee earning team should provide crucial support to the business, yet it is all too easy to have people in specialist roles who have little or no monitoring or supervision, because their roles involve technical elements that the lawyers simply aren’t equipped to oversee.
Add into the mix the constant need to comply with ever-increasing regulation, the pressure of responsiveness from clients, the threat of cyber attack, the need to spend on technology just to keep up with competitors, and the pressure to make business decisions often based on clunky data and you have a perfect storm of risk threatening to swamp any firm.
But this article isn’t helping reduce stress levels is it?
One helpful hint- outsource the things that aren’t lawyering to people who are expert in them.
I’m biased of course, but using an entity like Cashroom brings with it huge risk avoidance benefits. Improved tech savvy leading to more efficient processes and therefore a better end client experience, better cyber protection, resilient and flexible resourcing, trustworthy data, compliant processes. The list goes on.
One thing I do suggest- don’t pay lip service to risk. Assess it properly across the whole firm, and then act upon that assessment. It’s too risky not to do so!
About Cashroom
Cashroom provides expert outsourced accounting services for Law Firms including Bookkeeping, Management Accounts and Payroll services. Our mission is to free lawyers from the complexities of legal accounting by supporting the industry with accurate management information and allowing lawyers to do what they do best – practice law.
