An initiative aimed at helping firms to improve their profitability by using up-to-date practice management systems was launched by the Law Society last week.
A 65-page booklet – Cashflow and improved financial management: A self-help guide for solicitors – is being sent out free to all firms with fewer than 10 partners (approximately 9,500 practices).
The booklet, largely written by consultant Andrew Otterburn, gives benchmark figures for small firms on, for example, profitability, gearing and revenue. There follow examples of how the “best” firms hit these targets. In one example, a two-partner County Durham firm increased profitability by cutting disbursements from £20,000 to as little as £650.
Last week The Lawyer revealed a plan by Law Society deputy vice-president Robert Sayer to publish standard guidelines on fees for non-contentious work. The new booklet does not give any figures on fees, but a spokesman said that any firm following the recommended best practice would probably see their fees rise.
In July, the Law Society will set up a law management section for solicitors involved in practice management.
Andrew Angus, chair of the working party looking into the section, said practice management could be a “lonely occupation”. He added that for £125 a year, managers could sign up to the new section and get access to pooled ideas and information, courses and seminars.
Law Society president Phillip Sycamore said: “At a time when many firms are facing uncertainty about the future, often due to factors they have little control over, there is one area entirely within their control – their financial management.” He said the initiative carried through promises he made when he was elected president.
The moves are likely to be welcomed by the profession. The recent Law Society customer focus survey indicated most solicitors wanted the society to provide more practical help for firms in the increasingly competitive market.