Cripps may be at the top of the change in total borrowings table in this year’s UK 200: Financial Management report, with an apparently weighty 517 per cent increase, but in absolute terms this is only a rise of £845,961. Unlikely to break the bank.
An equally startling figure is the firm’s year-end lock-up of just 79 days (consisting of 30 days WIP and 49 days debtors), the lowest in the top 100 firms. In short, Cripps easily beat its 100-day year-end target.
As this year’s UK 200:The Top 100 report puts it: “Cripps has never had any trouble beating its 100-day lock-up target; since 2012/13, its total year-end lock-up has hovered between 76 and 78 days”.
Cripps managing partner Gavin Tyler says the firm has always been “absolutely hot” on the finances and financial discipline, stretching back to before he took over as the head of the firm from Jonathan Denny three and a half years ago.
“We’ve always worked on the basis that none of it is worth a penny until it’s in our bank account,” says Tyler. “We’ve spent a lot of money on training our lawyers and partners on pricing and the terms on which we work. Interim billing is vital. You can give someone 5 per cent off if they agree to pay monthly. Cash is everything.”
The firm’s focus on pricing was kick-started around 15 months ago when it brought in Validatum consultant Richard Burcher.
“Richard is a former managing partner and really knows the ropes when it comes to pricing,” says Tyler. “You can’t kid a kidder. It was brilliant watching him challenge partners who’d say, ‘I know what my clients like, and my clients won’t like this’. To which Richard would say, have you asked them?”
In addition to the training, Cripps has introduced a centralised revenue management team which produces bills for fee-earners for everything that is on hourly billing. Fee-earners just need to tick the box and the lawyers are kept away from it, adds Tyler.
“We now have two full-time FTE credit controllers and they don’t mind phoning people up and asking for money,” says Tyler. “Lawyers can sometimes be a bit reticent. There’s normally a problem if a bill isn’t being paid. But some clients won’t process a bill until they’ve had a phone call.”
Tyler says that technology is “vital” in keeping on top of financial management. Cripps is currently using Elite but is in the process of moving over to the Peppermint platform.
“The great thing about it is that it’s one of the first technology systems built specifically for lawyers,” says Tyler. “In other systems things are bolted on and most are inward facing. Peppermint starts with the CRM – in other words, the client – and everything is built around that. It’s outward facing.”
While Tyler admits Peppermint is not cheap – “it’s bloody expensive” – he is clearly a fan.
“You get a real-time desktop, live up-to- the-minute time recording numbers, overnight WIP updates, a list of current matters and so on,” says Tyler, who adds that technology such as Peppermint should be a contributing factor towards “basic financial discipline” among all of the firm’s lawyers, not just a few. To that end he is already looking for ways that Cripps can improve its already impressive financial management still further.
“We’re currently doing a lot of blue-sky thinking how we can get [financial discipline] into a balanced scorecard for equity partner remuneration,” adds Tyler. “There’s no reason now why you can’t have a more transparent remuneration system. We’re just trying to keep everyone lean, mean and hungry. These days, there’s nowhere to hide.”