Performlaw Blogs

Analyzing Profit Per Hour

Posted by: Brian Kennel on September 13


It is hard to argue that higher billing rates don’t result in higher profits. Not every attorney, however, can bill at high hourly rates. Most attorneys today are trying to find ways to practice profitability in a tight billing rate environment.

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Presentation: Calculating Client Profitability

Posted by: Brian Kennel on November 11

I recommend profitability analysis as a tool routinely.  The principal benefit of profitability analysis is that it promotes accountability. A firm that understands the basic economics of their practice has the competitive advantage to make meaningful improvements.

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Measuring Client Profitability Is a Tether to Reality

Posted by: Brian Kennel on August 17

It seems like common sense that any law firm would be interested in understanding the profitability of their client relationships. It even makes better sense to reward originators on the basis of this profitability.It has been my experience, however, that many firms do not have an effective system for determining client net income. Part of the struggle in implementing these systems is that there is fear on the part of some that their book of business is not as profitable as believed.

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Profitability Analysis as a Management Tool and in Compensation

Posted by: Brian Kennel on October 2

I recommend profitability analysis as a tool routinely. While there may be arguments as to the method of overhead application from firm to firm, the end results of these analyses are rarely so flawed that they are not useful for improving performance. The principal benefit of profitability analysis is that it promotes accountability. A firm that understands the basic economics of their practice has the competitive advantage of knowing who to reward and by how much.

 

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Why Are You So Interested in Our Firm's Accounting System?

Posted by: Brian Kennel on September 20

​I am often asked why I am so interested in a client's accounting system when I am not necessarily engaged to fix or evaluate it. My response is two fold: a client's accounting system is a reflection of their attitude toward running the firm; and secondly, much of the advice I give is dependent on accurate score keeping, which either confirms that a particular initiative is working or that a course change is needed. Poor accounting causes sub par decision making.

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