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Category Archives: Cash Flow – Finances

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Retirement at different times

Posted in Cash Flow - Finances
In Life After Law: What Will You Do for the Next 6,000 Days? I focused on the options available to the lawyer in the last phase of his / her career and how to prepare for a profitable exit strategy.  What I did not address, however, is the lawyer whose spouse is working and may … Continue Reading

MyCase adds to its integration

Posted in Cash Flow - Finances, Management
MyCase legal practice management software has announced an integration with the popular accounting software QuickBooks. This is an important integration, as it allows law firms to have full synchronicity between their practice management and accounting software systems. The integration comes at no additional cost to MyCase customers. For at least 15 years, I have been preaching "integration" … Continue Reading

Pricing contract lawyers

Posted in Cash Flow - Finances, Management
Are contract lawyers an expense or a fee item?  This issue has been litigated before and, according to my reading, has been resolved in favor of the law firm. The law firm is entitled to engage contract or temporary lawyers for one price and charge the client a higher price. One rationale for this is … Continue Reading

Collecting Your Fee is still the key

Posted in Cash Flow - Finances, Marketing
Georgetown Law School’s Center for the Study of the Legal Profession recently suggested that earlier realization rates of 92% have gone down to a historic low of 85%. That means for every dollar billed, the law firm is collecting only 85 cents. My suspicion is that these numbers are reflective of "Big Law," and not … Continue Reading

Lawyers for sale

Posted in Cash Flow - Finances, Management, Marketing
In today’s Wall Street Journal, the writer suggests that high priced lawyers are for sale, that is, that clients are pushing back and demanding lower fees irrespective of the stated hourly rates of their lawyers. The reporter’s perspective is skewed only to the larger law firms, “Big Law.”  Small firm and sole practitioners have always … Continue Reading

IOLTA changes

Posted in Cash Flow - Finances
Reminder note:  IOLTA protection has changed as of January 1st … Be sure you review your clients’ trust account to confirm that your accounts are in balance and that they are below the maximum now protected.  There no longer is unlimited protection … and that means that you may be personally liable for a bank … Continue Reading

IOLTA accounts may be in jeopardy

Posted in Cash Flow - Finances
Under current law, clients’ trust accounts are protected under the IOLTA program. The FDIC provides unlimited insurance coverage. However, unless extended by Congress, beginning January 1, 2013, such unlimited coverage will terminate and the new limit will once again be $250,000 per depositor. All funds held in such trust accounts as well as all funds … Continue Reading

Prices come down! Do sales go up?

Posted in Cash Flow - Finances
Echoing an earlier comment I made about the decreasing salaries for first year graduates,  NALP  recently said the decrease is 35%!  This further promotes change in the profession, from additional hiring, to out-sourcing, to independent contracting … and much more… Continue Reading

Public Justice versus Private Judges

Posted in Cash Flow - Finances
Justice should be free. However, the State of California has just cut the budget of its court system by more than $500 million!  Litigants will be left to fend for themselves.  One blogger suggests that private judges are not expensive when comparing the speed of justice in a private matter with the delays and increased … Continue Reading

Legal fees are high – according to whom?

Posted in Cash Flow - Finances, Management
In today’s Wall Street Journal,  staff writer, Jacqueline Palank discusses the Justice Department’s attempt to control fees that bankruptcy lawyers seek. Creditors and employees may, at times, be a bit disgruntled by such fees. So, now, the U.S. Trustee Program appears to be entering the fray. Before going further, it should be noted that i) … Continue Reading

Alternative fees – Redux

Posted in Cash Flow - Finances, Management, Marketing
The Wall Street Journal seems to focus on fees being charged by large law firms to large clients. It seems almost every other week, there is an article on the subject. In today’s paper, Jennifer Smith writes about the "resetting of legal costs." Her basic premise is that clients who obtained the "upper hand" during … Continue Reading

Cash Flow Runs the Law Firm

Posted in Cash Flow - Finances
Cash flow is the lubricant that enables all businesses to function. When you grow your revenue, or when you take too much money out of the organization, you will have a cash flow challenge. Only a supermarket or amazon-type organization can function with losses — they get great long term payment terms from their suppliers … Continue Reading

Internal financial controls

Posted in Cash Flow - Finances, Management
One would think that lawyers could keep their eye on the ball. But, somehow, despite the importance of cash and cash flow to the very survival of the law firm, lawyers tend to focus their attention elsewhere. I find this to be true not only in the small firm, but also in some of our … Continue Reading

Taxpayer changes for cell phones and mileage rates

Posted in Cash Flow - Finances
Cell phones removed from listed property category Cell phones have become so ubiquitous that the Small Business Jobs Act of 2010 has  eliminated the need to create special record-keeping by taxpayers for employer-provided cell phones.   IRS makes mid-year 2011 adjustment to business standard mileage rate For the third time in six years, the IRS … Continue Reading

Lawyers fees are capped

Posted in Cash Flow - Finances, Management
Wisconsin is in the news again. A lawyer, who promoted himself as the "king of lemon law," won a judgment for $12,500 against an auto dealership for unauthorized repairs and an award of attorney’s fees of $150,000.  The Republican-controlled legislature was so incensed that they adopted a law (and signed by the governor) limiting attorney’s … Continue Reading

Overhead percentages: What is optimum?

Posted in Cash Flow - Finances, Management
I was asked again about percentages of expenses. The inquiry came as a result of a recent survey that was being reviewed.  What is the appropriate expense percentage of revenue for health, etc. was the question in this instance. This was my response:  I don’t worry about surveys or what percentages others manage.  Every business/law … Continue Reading