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.

2004 WINNER

Marke Lane(l) of Barclays with Steve Willson and David Pester of TLT

TLT Solicitors is clearly continuing to make strong progress on all fronts since it was formed as a result of a merger in 2000. Specifically, management has taken control of working capital management, with distributions of profit being linked to financial performance and cash collections. It was this all round performance that most impressed the judges with:

A steady reduction in lock up days (from 157 days two years ago, to 141 last year and now down to 122, an impressive reduction of 32 days).
Bad debts reduced by almost two thirds over two years.
Greatly reduced borrowings.
Much improved work in progress recovery.
Faster distribution of previous year's profits.
Substantially lower ratios of practice management professsionals to fee earners.
A 38% increase in average profits per partner two years ago and a further 24% increase last year.

RUNNER UP

Taylor Wessing provided the judges with a comprehensive range of data on its working capital management as well as additional management and financial information.

As a result of streamlining of procedures for ensuring strict financial management and their implementation, the firm has made substantial progress in a number of crucial areas:

Bad debt expense reduced substantially.
Lock up reduced to 90 days (the lowest of the entries we saw) from 101 days the year before.

These achievements have not only enabled the firm to fully distribute profit from the previous year but to do so three months earlier than the year before.

We were impressed by the steady progress being made by the management of the firm and the involvement of not only partners but also clients with such matters as fee payment schedules.

3RD PLACE

Osborne Clarke has transformed its working capital management practices in the last two years.

A work in progress write off policy has been introduced which has improved realisation rates.

A central credit control function now has the decision-making responsibility for collecting cash, rather than individual partners, with the result that there is now much more effective control over follow up and cash collections, a major turnaround at the bank and, for the second successive year a reduction in lock up days, down by 10 days to 113 days.

A tough line has been taken with partners whose debtor days are 50% higher than the firm's average which has resulted in quarterly draws not being paid to a number of partners.

2004 FINALISTS

Runner up

Third place

Shortlisted

2004 SPONSOR

An industry focused team dealing predominantly with large professional practices based in London and New York consisting of 40 people including nine Relationship Directors who have over 40 years of sector experience between them. Each Relationship Director has a carefully balanced customer portfolio that allows time for regular contact with their customers and time to discuss and develop innovative ideas to add value to each relationship.

OTHER YEARS

2005
2003