Top 10 Financial Errors: #7 Put Off Dealing With Underperforming Lawyers

Groucho Marx said once: “[Money] frees you from doing things you dislike.  Since I dislike doing nearly everything, money is handy.”

Most of us were not born independently wealthy.  Unfortunately, the consequence of that is that we have to earn our living.

Generally, lawyers practice together because they perceive a positive economic relationship and, usually, genuinely like the other people in the firm. But in a smaller firm, failing to face up to the fact that “ol’ Joe” isn’t having a very good year (or years) can have dire consequences.

Schedule monthly meetings for the purpose of examining everyone’s performance against stated financial goals: billable hour targets (WIP), WIP billed (bills rendered), bills collected, accounts receivable balances (net increase or decrease), accounts written off or deemed uncollectible, disbursements incurred, disbursements billed, disbursements written off and status of outstanding files.

If done regularly and honestly, this won’t be a confrontational meeting. When everyone in the firm is required to report monthly to all other partners, you instill a culture in the firm that is self-correcting. If someone fails to regularly meet their financial goals, you have a decision to make and a forum within which it can be made.