Most attorneys will readily subordinate their independence for the benefit of the firm, if they see tangible evidence of management's effort to meet their objectives. The benefits are obviously of mutual advantage. Budgeting for Revenue and Expenditures Management of the firm's financial affairs begins with careful monitoring of its past and present activities and establishing projections for the future. This involves reviewing the present and potential monetary aspect of each client matter. In addition, a systematic review of receipts, disbursements and productivity data will enable the firm to make decisions that will assist it in formulating and ultimately achieving practical objectives.
Most firms routinely develop projections for financial goals for the year ahead.
In order to develop the information necessary to establish the budget, the firm may be required to take a long and objective look at itself to determine whether its current volume of business will generate sufficient income to meet the partners' expectations and pay all the operating expenses. A firm must maintain a volume sufficient to fully utilize the time of its attorneys. The most efficient system will not result in a satisfactory net income unless the volume and value of the matters is plentiful. Adequate financial planning includes consideration of the firm's present client base, its billing and collection procedures, and specific method for managing the firm's finance's. One other critical aspect of financial planning involves maintaining adequate controls over costs.