Understanding Profit Margins
In this series of articles we focus on how to assess the financial performance of law firms, from a management rather than an accountant’s viewpoint. There are many (maybe even most) lawyers who claim to not understand the financial reports they are given by their finance team and there are some grounds for that given many of the monthly and other financial reports that abound in law firms.
There are also some very real and worrying misunderstandings about what is important data and what is subsidiary data as well as serious misunderstandings when comparing data between business units inside a firm and between firms. (We deal with the latter issue in this first article).