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Latest Issues

22/10/2009 - Market Update - Commercial Law Firms

The Importance of Good Budgeting

Most law firms had a real dilemma when it came to budgeting time in the early months of 2009. Those with any sort of non contentious practice had seen a decline in revenues during the previous 6 months anywhere between serious and disastrous. Most firms made significant redundancies from October to December 2009 to reduce their costs in response to falling revenues. The problem was that no one knew what was going to happen over the next 12 months. Was the market going to stay as it was, worsen, or improve? If it was going to change, at what rate? So what to do when in such uncharted territory? Over the last few years budgeting had been easy. Take last years figure and add a % for growth, which reflected the actual revenue growth over the previous 2 or 3 years. Now the bean counters would earn their beans. Most firms adopted the principle of a flat budget. Budget for 2009/10 at the activity rates of 2009. So how has that worked so far and how are law firms doing in the first half of the new financial year? Generally firms seem to be hitting their revenue budgets, which suggests that underlying commercial activity is at least holding up. If anything, anecdotal evidence suggests that commercial activity has slightly picked up. What this means is that commercial firms, which reduced their cost levels enough can potentially have a good year in 2010. The firms that are in trouble now are the ones that either over estimated their ability to generate revenue with the people they still had, or the ones which failed to cut costs sufficiently. Aside from the importance of having good business developers and hard working fee earners the last few months has also shown the value of good budgeting and planning.

View News Archives

06/02/2010
Goodbye Alex
Read more about "Goodbye Alex"

06/02/2010
New Chairman
Read more about "New Chairman"

22/10/2009
Market Update - Commercial Law Firms
Read more about "Market Update - Commercial Law Firms"

26/08/2009
The Impact of the Recession on Law Firms
Read more about "The Impact of the Recession on Law Firms"

20/05/2009
Update on World Employment Markets and Hiring Intentions
Read more about "Update on World Employment Markets and Hiring Intentions"

05/03/2009
Time to Change
Read more about "Time to Change"