Tag Archives: revenue

Time and money

From my days as a project lawyer, I remember hearing “it’s just a question of scope. Or time. Or money”; the three key project variables. Of those, it’s time and money that are occupying my thoughts this week. In particular, the need to strengthen the link in lawyer’s minds between what they do (day to day) and making money for the firm.

Coming out of a listed company, that reports revenue and profit figures quarterly, the laser focus on those numbers was fresh in my mind (along with cash flow management in the current environment). This undoubtedly had some downside (in particular I think quarterly reporting encourages overly short-term thinking) but one strong upside was that people’s minds were focussed on helping the company make money. It might not be quite the same as creating shareholder value, but it was a good start.

Contrast this with a standard law firm. Lawyers may well be under serious pressure to meet chargeable hours targets, and team leaders exhorted to drive up utilisation rates, but to me that is one step removed from making the link between work and revenue. I think there are a lot of lawyers who don’t have a strong connection between what they actually do (be it chargeable work, bringing in new clients, training junior lawyers) and the money their firm makes.

Got my mind on my money and my money on my mind?

Given this is an observation, rather than a criticism, I’ve been mulling over the causes. Of course, at the heart of this is arguably the chargeable hours model of pricing work, which encourages a focus on hours worked, not on value delivered to the client (and thus the price the client will pay for it). However, I think there are also cultural factors at work in the English profession as a whole which have their roots deep in history and can perhaps explain why lawyers don’t like talking about money. Except of course when it comes to talk of salary or drawings, when many lawyers can prove to be highly articulate, very up front about expectations, and the link between effort and reward is strongly made in their minds!