Those firms with slower client payments are encouraged to extend their cushion of firm capital to three and one half months. Set working capital equal to a fixed percentage of gross fee collections. Oftentimes this may range from five to eight percent or more of the firm's revenue. Partner Contributions Most firms determine capital contributions proportionately, based upon partner earnings. As individual incomes increase or decrease, the firm requests additional or less capital from some partners and refunds a portion of capital to others.
Some firms expect all partners to contribute the same amount.
However, this practice appears to be rare. P lease use the input area below to send us your management question. Make sure to scroll and click Submit when complete. Copyright 1997, The New York Law Publishing Company. All Rights Re served.