Many firms are coming up to a decision point.  Windows XP will no longer be supported after .  Accordingly firms are looking at replacing their desktop or laptop XP machines with Windows 7 (or perhaps Windows 8) PCs.  Or are they?  There has been a considerable growth in BYOD (Bring Your Own Devices) to work.  iPads and other tablets have made considerable inroads.  Many lawyers now operate using an iPhone, Android or Blackberry  or indeed a lightweight Mac Air – and don’t relish the idea of lugging a PC laptop around.  So what is a firm to do?

Before they …

We all like to be on the same wavelength with people we work closely with, but this tendency to select others like us can be a problem when seeking out a new support staff hire for your law practice.  For example, if you’re a sole practitioner with a keyboard speed of 90 words per minute or skilled in the operation of voice recognition software, a speed typist may not be the best use of use of your hiring dollar.

Before you hire, think about the tasks that require a law license. Unless you’re considering hiring an associate, you are going …

Unless you went to school in a one room prairie school house (or were home schooled), you were probably put into a class with other people your exact age, and have been hanging out with people who are approximately the same age that you are ever since. To effectively market your law practice, break out of this mold and consciously make an effort to network with attorneys and other potential sources of referrals who are much older and younger.

Everyone wants to be with the “movers and shakers,” who are usually a little more advanced in their careers and, hence, …

At long last we come to the end of our top 10 Cash Flow Reports Tips with our final entry, Client Trust Balances.

Institute a procedure to ensure regular review of the trust account balance for each clients.  You want to determine whether there are funds in trust that can be applied against unbilled time or disbursements and whether there are clients or matters that are approaching the exhaustion of their retainers or cost deposits.  Keeping on top of this information will go a long way toward making sure that you are not placed in a position of having  to …

Daily time summaries by lawyer are also an important part of cash flow reporting.  To make this analysis accurate, all lawyers in the firm should be accounting for all of their time every day – billable, firm administration or management, marketing, mentoring, continuing education, pro bono, vacation, etc.  Doing so will allow firm management to look for aberrations or time summaries that don’t make sense or indicate poor time management or failure to meet minimum billable time requirements.

But once you start accounting for all your time, how do you know how you stack up?  Here’s a quick way to …

Often law practices look great from the outside.  There are lots of clients, the lawyers are always on the run, and from all outward appearances the firm is successful.  Sometimes, though, these firms – rather than being a picture of health – are more like a patient with a fatal disease, a silent killer the symptoms of which have not yet begun to show.

That silent killer is  unbilled fees and disbursements.  As a consequence, all firms should be monitoring the state of their unbilled work and disbursements just as someone with diabetes constantly monitors his or her blood sugar …

Ralph Waldo Emerson once said: “Money often costs too much.”

It is, unfortunately, true that you have to work over $1.00 worth of time to collect $1.00.  The question is:  how much more?  How do you measure this?

One of the ways of measuring the cost of making money is to look at your realization rate. Accordingly our next cash flow report is:

#7 – Realization Rate

A lawyer’s realization rate is the percentage of actual income paid to the firm for the billable hours of each timekeeper.  For example:

Let’s look at Partner X:

• Assume Partner X bills 200

Ahh the age-old problem of lawyers:  collecting accounts receivable.  The bane of the lawyering class. The inconvenient truth is that if you are working on the basis of an account receivable, you are most probably working for less – and in some cases far less – than your standard hourly rate.

Woody Allen once said: “Money is better than poverty, if only for financial reasons.“

So, if money is better than poverty, our next cash flow report to produce (and examine) on a monthly, if not more frequent, basis: Aged Accounts Receivables.

Your accounts receivable should be grouped …

Where are the money pits in your practice?  One of the biggest is called: “Unbilled Disbursements”  These disbursements represent expenditures on behalf of clients that you expect will be recovered in due course.  Of course, therein lie the assumptions: that you will be able to bill for them and you will be able to recover them in time.  But there is a quote of Ayn Rand that is appropriate here:

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.

Yes you need to expend funds on files you …

Johann Wolfgang von Goethe once said:  “Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.”

There is an old adage that time equals money.  But unbilled time doesn’t equal money until it is billed and collected.  Accordingly, our cash flow report #4  in this series of posts is: Work In Progress:  Is your WIP increasing or decreasing?

What does your WIP report say about time that you have banked?  Is it trending larger or smaller or staying about the same?   If your WIP …