A new survey has revealed a continental divide between the greatest perceived financial challenges faced by large law firms in the UK versus the US.
In the UK, the build up of work in progress (WIP) and its age is a greater concern than accounts receivable / debtors. In the US the greater concern is with the level of debtors and debtor write offs.
Does this reflect a pattern of cultural stereotypes? Are UK lawyers too polite to bill clients all of their WIP? In contrast, US firms have less resistance to billing their WIP but clients are resisting paying.
If there is a pattern of cultural stereotypes, where would Australian law firms stand in concerns about billing WIP and getting paid? No doubt both issues would be of great concern.
BigHand, the company with a forensic understanding of law firm operations and efficiency, has just released the results The Global Cash Flow & Profitability Survey.
Between October and December 2019, BigHand gathered 257 respondents globally – all senior individuals within law firms of over 100 lawyers. The initial operational questions focused on the main cash flow challenges and were followed up with questions around the visibility of key financial data to understand the correlation between reporting levels and healthy cash flow.
The survey reveals:
- Why urgent action to improve data visibility is needed to support collaboration across finance teams and lawyers.
- How a lack of access to up to date information for lawyers and finance teams is holding law firms back. Old data remains a constraint to effective cash management strategies.
- What the different regional pain points are for law firms and the strategies on the table over the next two years to transform cash flow and profitability.
- What stages law firms are struggling with most – from under-scoping work at the outset to using the wrong resources to undertake the work, to cash collection.
To find out more or to read the full report, visit bighand.com/en-us/bighand-cash-flow-report