Show me the money

Turnover is vanity, profit is sanity and cash is reality – the old maxim is as true today as when it was first coined. Yet firms still haven’t quite got to grips with working capital management. Many still borrow excessively to buttress their daily operations, and partners continue to draw too much from their businesses in relation to cashflow.

The answer to both of these problems, of course, might be to get cash into the business a bit faster. Sounds very simple – but there are plenty of pitfalls for legal managers trying to implement change if the business’s people don’t understand the importance of recovery. Fee earners may be particularly resistant to change, since they tend to think a job is done and dusted once they’ve raised the bill (and it often takes them a while to do even that). And they’re generally reluctant to chase debts in case they upset clients along the way.

CASH ME IF YOU CAN

Mergers are becoming popular. SME firms are increasingly seeking to grow by plugging themselves into a permanent partnership. In a straw poll of legal management leaders at the 2017 LPM London and Birmingham conferences, 44% and 39% respectively said their firm was fairly or very likely to merge with another legal services provider in the next two years. Another 6% in each city said their firm was already in the process of merging. That’s a lot of merger action.

LEGAL AS A SERVICE: HARPER JAMES SOLICITORS

The business landscape is gradually shifting into a subscription economy. Consumers and businesses increasingly want the flexibility of subscribing to services rather than buying products – and many traditional pay-per-product businesses, such as Microsoft, have incorporated pay-monthly packages into their business models. Today, virtually anything can be bought on a subscription basis: movies, fashion, pet food – and, it turns out, even legal services. National firm Harper James Solicitors has offered legal services on a pay-monthly basis since its establishment by CEO Toby Harper (pictured second from left) in 2014.

BEST OF BOTH WORLDS

Can technology make your firm more efficient and competitive? IT is usually implemented in business to drive down costs and drive up automation – and rightly so – but it can also be usefully applied to give businesses a competitive edge. And technologies that can do both should surely be at the top of your firm’s wishlist. Last month’s LPM Legal IT landscapes 2017 report, sponsored by iManage, Thomson Reuters and Tikit, delved into a range of legal technology areas to find out which are most affecting the world of SME legal. But we had so much data we decided to keep some back until this month.