We are living in an age of uncertainty and instability - two words that commerce and business traditionally dislike. But for finance professionals in law firms, this has also presented something of an opportunity. The days of bean counters in the back office are long gone. Law firms are now far more reliant on senior financial management teams to be able to provide, and act upon, accurate, insightful information about the firm, particularly around commercial trends, client spend, sector performance and geographical nuances.

Stepping up

 

Propelled by a more challenging business climate, Directors of Finance have made a distinct shift to centre stage in the legal sector. They are leaders in law, seen as reliable, measured and commercially astute individuals who play a key role with the senior management team in developing and implementing new ideas and initiatives. Not only are they personally expected to show strategic nous but also the ability to build teams of commercially-focused accountants who have the communication skills to be able to train and direct fee earning teams across the business – in areas including pricing negotiation and fee structure, working capital management and ultimately increasing revenue, profit and PEP.

Beyond that, today’s Finance Directors are intimately involved in all aspects of a firm’s business plan, from hiring and promotions through to top level client strategies. Take a role that we are currently working on – Director of Finance & Operations for a growing international law firm headquartered in the US. This link up of finance and operations is increasingly common – as firms seek professionals who can combine financial qualifications with wider operational capabilities and responsibility. This often also means taking oversight of other business services functions including IT, BD & Marketing, HR and Risk. No wonder then that senior finance professionals are also those most likely to take on the increasingly popular role of COO.

But the impact of this commercialisation of finance isn’t just on the most senior roles. The whole finance team is changing and evolving. The growing use of accountants in specialist Business Manager and/or Finance Business Partner roles is testament to the increased reliance of law firms on the whole finance department to deliver commercially relevant financial and business data. Recently a CFO at a top 10 UK law firm told interviewees for a Finance Business Partner position that he regarded these roles as the finance departments’ future leaders in the legal sector rather than the traditional FD-in-waiting roles that Financial Controllers / Heads of Finance traditionally played. It’s an interesting and compelling point of view.

This is supported too by an explosion in finance system upgrades and implementations. Law firms are recognising the need for the best reporting tools to be able to compete in an environment in which performance is flat. According to the PwC Law Firms Survey 2016, 75% of the top 100 UK law firms reported revenue growth in 2016, down from 82% in 2015. Law firms understand that investment in finance teams underpinned by the right technology will help protect growth rates in the face of increasingly tough market conditions.

Trusted reputation

 

But perhaps more than all of this is the increasingly favourable image of the legal Finance Director as law firm leader. Far from being seen as ‘masters of spin’ senior finance professionals have managed to gain for themselves a reputation for commercial know-how underpinned by real-world data. The sense is that these are the people you go to when you want to know what’s really going on. Combine that with an ability to apply the analytics to business decision making, and you can see exactly why commercially minded finance professionals are in such high demand in these days of uncertainty.

Finance professionals in law have stuck their heads above the parapet. Their reward is very real leadership of 21st century law.

If you would be interested in discussing any of these trends further, or would like to know more about our current vacancies in law firm finance teams, please drop me a line at [email protected]

MD

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