Far too many equity partners at contingency law firms do not know how their firms are performing financially. The irony is that if they don’t know their firm’s financial situation, they won’t be able to make payroll or invest in their clients’ matters.
PHILADELPHIA (PRWEB) February 03, 2022
Pond Lehocky Giordano LLP, the largest workers’ compensation and disability law firm in Pennsylvania, unveiled an equation that its executives believe can help contingency fee lawyers manage their law firms by giving them a sense of how their firms are doing financially at any moment in time. Armed with the knowledge provided by the equation, these lawyers may be able to more quickly diagnose issues that plague their firms’ finances.
The equation is:
Prospects x Contact % x Qualified % x Retained % x Fee Generating %
x Average Fee – (Fixed + Operational Expenses) = Net Income
Each variable represents a key metric that can be used to plan, predict, and determine the future revenue and profitability of a contingency firm:
- the number of prospective clients,
- what percentage of those clients have been contacted,
- what percentage have been qualified as potential clients,
- what percentage have been retained,
- what percentage have fee-generating matters, and
- the average fee generated, minus the firm’s fixed and operational expenses.
Pond Lehocky Giordano unveiled the equation in an article recently published by its CEO Shawn Lehocky and its chief financial officer Bryan Reilly in The Legal Intelligencer, a daily newspaper serving the Pennsylvania legal market. The article, available here, walks readers through the equation, explains how the equation’s variables can be used to provide even more information about a firm’s financial situation, and details the importance of law firms building systems that provide accurate information flowing into the equation’s variables.
“Far too many equity partners at contingency law firms do not know how their firms are performing financially,” said Mr. Lehocky. “The irony is that if they don’t know their firm’s financial situation, they won’t be able to make payroll or invest in their clients’ matters, and they won’t have a law firm that’s open for business to serve their clients.”
“Equity partners at contingency law firms owe it to their clients and colleagues to keep their firms open by keeping them profitable,” added Mr. Reilly. “Our equation provides vital data to contingency firms that can tell them if their firms are running at a profitable clip, and if not, what they may need to do to get their firms to do so.”
# # #
About Pond Lehocky Giordano LLP
Pond Lehocky Giordano LLP is the largest workers’ compensation, Social Security disability, and short- and long-term disability law firm in Pennsylvania. The firm’s nationwide referral network, which includes more than 2,000 attorneys and through which more than 160,000 cases have been referred, helps injured and disabled Americans across the country obtain the legal assistance they need to get their lives back in order. The firm has been recognized by The Philadelphia Inquirer as a “Top Workplace,” the Philadelphia Business Journal as a “Best Place to Work,” and The Legal Intelligencer as one of the top law firms in Philadelphia for gender diversity. For more information, please visit https://www.pondlehocky.com.