Best management of working capital
For the firm that has trained its partners in the importance of meeting tough targets for WIP, debtors, headcount and overheads, and can demonstrate exceptional results.
2003 WINNER
The Taylor Wessing team
With profits affected by poor market conditions,
law firm Taylor Wessing introduced new
financial controls.
Departmental credit controllers now review
unpaid invoices over 60 days and WIP over 90
days with individual fee earners. Once invoices
reach four months, the credit control committee
is willing, in extreme cases, to wind up the client.
All fee earners are trained in the importance of
billing and collecting fees. The judges were
impressed that as a result, debtors days have
fallen by 15% to below 60; cash collection has
increased whilst gross billings fell; and almost no
bad debts have been written off.
Partner contributions, drawings and healthy
cash balances have been maintained, with the
balance of prior year’s profits fully distributed.
RUNNER UP
Fladgate Fielder has no debt, low partner contributions and borrowing is used strictly for investment. The firm’s Board has long recognised that, in order to meet the firm’s business goals, those who have responsibility for managing the firm’s assets or expenditure must be fully aware of their accountability to generate acceptable returns.
The finance team focuses on mentoring, education and training fee earners in financial management. Cash is further conserved through a conservative drawings policy with only 60% of planned profits drawn each month. The judges share The Lawyer magazine’s view, which in a recent survey described the firm as one of the best financially managed law firms in London.
3RD PLACE
In spite of recent incorporation and the acquisition of fund managers NCL, Smith & Williamson has retained a strong focus on working capital with net cash of £19 million on the latest published balance sheet. This focus has been at an individual director level - on the basis that it is the parts that make up the whole.
Detailed financial information is provided monthly; targets set; and lock up performance forming part of annual reviews. New directors are made aware of their working capital responsibilities. Third party evidence is provided by the group’s bankers: ‘Smith & Williamson compares very favourably with their peer group, especially in the area of working capital management’. And who knows more about working capital than bankers!
2003 FINALISTS
Runner up
Third place
2003 SPONSOR
Interface Software provides client relationship management software and services that enable professional services firms to
create the Relationship Intelligence they need to uncover new business opportunities and enhance client service. Its flagship
product, InterAction, is used today by over 350 law firms and consulting firms worldwide.
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