6 key numbers that can diagnose the financial health of your law practice
Do you know how many billable hours you can devote to a new case? Or whether you need to add another attorney to your firm? Can you afford to take time off from your practice, and if so, how much? If you're one of the lawyers who is kept up at night with worries about your firm's finances, you are not alone.
Financial analyst Brooke Lively, the president and founder of Cathedral Capital, says law school does not prepare most people for the business side of the practice of law.
Through her work with attorneys and firms, she’s identified six key numbers that can tell the health of a law practice and identify what next steps a firm needs to take:
1. Cash
2. Ideal ratios
3. Production
4. Budget vs. actual
5. Marketing and sales
6. Case management
They are compiled in her book From Panic to Profit: How 6 Key Numbers Can Make a 6 Figure Difference in Your Law Firm, and she walks through what all six categories mean and how to analyze them with the ABA Journal’s Lee Rawles.
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In This Podcast:
Brooke Lively
Brooke Lively is the president and founder of Cathedral Capital. Prior to consulting, Lively was the full-charge administrator for a seven-figure small law firm, which she helped build from the ground up. She also is a receiver in Texas with a special interest in family owned and operated companies and other assets in dispute. Her book series includes 6 Key Numbers Every Entrepreneur Should Know, 6 Key Numbers Every Psychologist Should Know and From Panic to Profit: How 6 Key Numbers Can Make a 6 Figure Difference in Your Law Firm. Lively has an MBA with a double concentration in investments and corporate finance from Texas Christian University in Fort Worth, Texas, and has been awarded the Chartered Financial Analyst Program designation.
