9 Year-End Financial Health Checks for Attorneys

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Did your Law Firm meet or exceed your expectations in 2013? Were you hoping to accomplish more? Regardless of your Law Firm’s performance so far this year, now is the time of year to position your Law Firm for a stellar 2014.

                 Financial Checklist for Attorneys

Financial Health

checkboxAre you recapturing funds invested in your cases?

Are you using precious company or personal resources to fund your clients’ case or trial costs?  If you are, you’re probably not earning an adequate return on your capital. Case Funding can offer creative ways to recapture funds tied up in your current cases that could be working to secure you a healthier financial future, grow your business and increase your bottom line.

checkboxAre you fully maximizing the value of your cases?

Whether our attorneys need case cost financing or medical funding for their clients, financing is available to help you get you the right experts, and help your clients finance the medical care they need to support their claim.

checkboxHave you consulted with your CPA or tax adviser?

2013 was rife with changes to the tax code affecting law firms, and year-end is the perfect opportunity to try and mitigate potential tax concerns. The IRS recently issued a Private Letter Ruling that pronounced that funds advanced by a plaintiff’s law firm on behalf of the client for case costs should be treated as a loan to the client, and therefore are not deductible by the law firm until the outcome of the case is determined. Check with your financial or tax advisor to make sure you are properly accounting for case costs and other client expenses.

checkboxHave you evaluated your Effective Hourly Rate?

Reviewing your firm’s historical profitability and preparing your 2014 budget is a good way to re-evaluate operations and compare your effective hourly rate for contingent cases (fees/hours logged) to the hourly rate you would otherwise  charge.  Drilling down to the actual case level  will help you and the key associates at your firm to determine, which case types your firm should consider and which you should avoid.

Operational Health

checkboxHave you complete a check-up on your Law Firm’s Strengths, Weaknesses, Opportunities, and Threats?

It’s easy to overlook the important aspects of running a law firm when you’re caught up in the day-to-day activities of running cases, . Year-end is a great time to meet with your partners and staff and get up to date on the day-to-day happenings of your firm, evaluate your progress and update your operations plan & budget. This is also a great opportunity for team building and to reassure your staff that you value their work.

checkboxDo you have a high-return marketing campaign in place?

Do you have enough qualified leads in your pipeline to generate sufficient revenue and  a profit in 2014? Do you know your cost per lead metrics are?  Are you spending enough on marketing and are your marketing programs cost effective?. Case Funding can help attorneys and law firms finance successful marketing and business development campaigns with Working Capital loans.

checkboxIs it time to expand your staff or office or upgrade your software?

When people start parking on the grass, it’s time to move. When your paralegal has disappeared behind a skyscraper of files, it’s time to bring on new team members. While expansion can be stressful, it is of course a good indication that your Law Firm is moving in the right direction. Plan accordingly to minimize the downtime so that you can enjoy the benefits of your hard earned expansion.

If your firm is moving onward and upward, it may be a good time to evaluate whether or not your firm’s technology and software are helping or hurting the progress. Because let’s face it, your time is expensive and if you are spending it staring at a ‘loading’ circle of death, it’s definitely being wasted. Tech sales reps have been armed with an arsenal of deals for the holiday season, and now is a great time to take advantage of it to upgrade your office computer network, explore the touted benefits of predictive coding and other industry specific tools, or invest in practice/project management software to help you make efficient use of your time.

checkboxHave you reviewed your retainer agreements and other contracts?

In addition to your tax advisor and financial planner, it may be a good time to meet with a trusted colleague who specializes in contract law. Make sure you are up to date with your local bar rules and you have revised anything that hasn’t been addressed with your clients in the past.

checkboxHave you given rewards for a job well done?

Recognition goes a long way in earning loyalty, and loyalty goes a long way when you need the staff to pull a few all-nighters in 2014. Celebrate your triumphs and reward your team – you’ll benefit both from the boost in morale as well as the tax deductions for 401 (k) contributions & year-end bonuses.