Cash flow in a law firm: the no-nonsense guide

A law firm's revenue is rarely linear. Some months bring several success fees, others only the retainers. Without a cash flow, the firm swings between a feeling of abundance and a scare at the end of the month.

The three sources of revenue

1. Recurring: monthly retainers and advisory work;
2. One-off: upfront fees and per-act fees;
3. Variable: success fees, court-awarded fees and settlements.

Separating these sources shows how much the firm depends on uncertain revenue.

Expenses

• Fixed: rent, salaries, software, accountant;
• Variable: advanced court costs, travel, copies, expert fees;
• Reimbursable: case expenses the client must pay back.

Build a 90-day projection

For the next three months, list:

• Fee installments coming due;
• Settlements with expected payments;
• Fixed expenses and the variable ones already known.

The result is a clear view: will next month close in the black? Can you hire? Do you need to step up collections?

Simple rules that make a difference

• Keep the firm's account separate from your personal account;
• Maintain a reserve equal to a few months of fixed expenses;
• Review cash flow every week, not only at the end of the month.

How IntegraLegal solves this

In IntegraLegal, fees, expenses, settlements and charges are linked to cases, so cash flow emerges from the data you already record. The Financial Center shows revenue, costs, forecasts and reconciliation, with reports ready for the meeting with your accountant.

Keep your firm's cash flow in the palm of your hand: try it free for 7 days.

Read also

• Success fees: how to track them from settlement to payment
• Client late payments: 6 measures to reduce them without losing the client
• The partner’s weekly routine: 5 reports worth more than meetings

Notice: this content is for information only. It does not replace a lawyer's analysis of the specific case. Always check the legislation, case law and rules in force on the date of your consultation.