Editor's letter

Since the last issue of FD Legal was published, firms across the UK have been revealing their half-year turnover figures. And the news has been largely positive, with several firms, including Ashurst, Bird & Bird, Herbert Smith, Nabarro and SJ Berwin, increasing fee-earner income by 20 per cent or more. But, while confidence is understandably high, there also seem to be some reservations over appearing over-confident for the months ahead. As Simon Bromwich, managing partner at Ashurst, says: “It remains to be seen how current market conditions will impact on the full-year performance…”
Despite the successful financial story so far for law firms, the economic year in general is an uncertain one at best. The Bank of England has warned of a number of risks to the UK economy next year, forecasting that the economy may slow and inflation accelerate. While some analysts have predicted that means a drop in interest rates to boost spending, there seems to be little indication as to what will actually transpire. Anxieties have been little calmed either by the Bank of England warning of further global financial uncertainty stemming from surging energy prices and possible falls in the stock markets.
As we come to the end of the year, however, all appears relatively calm in the legal waters. It is yet to be seen how the financial markets, and possible banking disputes stemming from the recent ‘credit crunch’, may impact law firms. Until then, the financial reports emanating from UK law firms suggest that 2007-2008 will be a successful financial year all round. It may, of course, be the calm before the storm, but we will wait and see as the new year breaks.
In the meantime, this will be your last issue of FD Legal this year. It therefore seemed appropriate to focus this month’s cover story on finance roles in the legal profession. Although generally accepted as an essential position in law firms, some finance directors still struggle to get to the very top of the profession – or to even gain the respect of the partnership to implement change. While a number of finance professionals have made it to chief executive or COO, where they enjoy broad responsibilities for strategic as well as financial development, the number of FDs getting to the top is still limited. Considering the fact that there are now many talented finance directors in legal, with much-needed commercial expertise borne from outside industry, it seems strange that most firms are still unwilling to try a ‘non lawyer’ in top management positions. Or, if they do, they ensure that he or she has limited authority to actually make decisions. Having a lawyer leading a legal business as managing partner makes sense as long as the right person with the right leadership skills can be found. But it’s a sad reflection on the significant progress law firms have made in becoming modern business operations, if they actually only make a lawyer their managing partner, because that’s how it’s always been done.

Caroline Poynton
Editor

Features

People profitability: healthy, wealthy and wise Free
In 2007, PIFC Consulting conducted a 'Legal Sector HR and Employee Benefits Survey'. In this second FD Legal article, these survey results are examined to establish how firms can best meet the challenges facing their HR teams, and maximise the productivity and profitability of their partners and employees.

Case study: Berwin Leighton Paisner Free
Understanding that successful financial management should involve every member of the firm, BLP has implemented a training programme so that all its fee earners understand and contribute effectively to the firm's finances.

Tying financial measurement into long-term strategy Free
As financial measurement becomes a far more forward-looking exercise, this guide explains how to analyse financial measurements to create action points for the strategic planning of your business.

Case study: Clarke Willmot Free
Budgeting and forecasting processes can be both time-consuming and ineffective. But at Clarke Willmot, implementing the right technology has made all the difference.

Pricing management This article is for subscribers only
Managing pricing structures continues to prove one of the most difficult challenges in the legal profession. A more proactive and structured approach would help firms charge sensibly, creating higher profits and improving levels of client satisfaction.

A dead end? Free
While the legal profession is enjoying widespread business transformation it can still be a tough environment for 'non-lawyers'. Are finance professionals really being given the opportunities to thrive and develop in today's legal partnerships?

Regulars

Opinion: Rolling forecasts Free
It's painful enough producing the yearly budget, so why on earth would you want to start implementing rolling forecasts? For Watson, Farley & Williams, it made perfect sense.

Thought leader Free
The legal profession has become extremely competitive and is set to become even more so. Both commercial and public-sector clients are far more sophisticated in their approach to commissioning legal work. Many employ in-house teams recruited from practice and procurement managers from industry, and they use beauty parades and tenders. As a consequence, lawyers find themselves squeezed on price but expected to provide high-quality work that add values to the client.