Mission critical: Unlocking cashflowManaging a firm’s revenue / working capital lifecycle is a significant responsibility in a legal profession that has a huge amount of cash locked-up in work in progress (WIP) and the billing and collection process. PwC’s Law Firms Survey 2019, for example, showed that while year-end lock-up performance improved across the top-100 law firms in 2019, average lock-up rates worsened for top-10 and 11-25 firms by nine days, outweighing the improvements. The result, according to PwC, is a significant lost cash opportunity, amounting up to an average of £32.5m in a top-10 firm. Not surprisingly then, we have recently found ourselves working more frequently on senior revenue management roles, as firms have realised the importance of recruiting revenue experts who have the leadership ability to radically improve the working capital lifecycle.
What are firms looking for?Senior roles of this type take a new spin on familiar revenue titles in the legal profession – moving from overseeing the process of revenue collection (undertaken largely by people with considerable prior experience in law), to broader and more strategic roles that bring in commercial expertise, often from outside of the legal sector. The aim is to take these roles to the next level where they can favourably impact WIP and lock-up performance. Titles for these roles may vary along the lines of Head of Working Capital or Senior Manager – Working Capital, but they all reflect the more senior remit, with salary and benefits to match. Typical responsibilities include:
- Setting the strategy for the working capital function
- Designing and implementing new revenue management processes
- Devising innovative solutions to improve the revenue lifecycle
- Working closely with the Head of Finance and developing strong relationships with other senior managers and stakeholders
- Leading the working capital team