We have been thinking a lot about law firm financial stability recently. It is a sad fact that many firms are struggling.
Financial stability has always been a huge risk area, and there comes a point where you have to involve your regulator – however uncomfortable that may be.
But where exactly is that point? And how can we avoid the common pitfall of being so concerned about the SRA, that we lose sight of the bigger picture?
It is far too easy to convince ourselves that there are reasons not to report. Human nature, in fact.
We’ve had a go at putting together a simple 3-Tier objective tool for you to incorporate into your own practice.
Each tier gives example trigger points and required actions.
Because it is objective, putting in place a framework like this should take away the agonising over whether this or that is reportable.
Bonus resource: the Financial Stability Scorecard
For a comprehensive assessment of your level of financial stability risk, see the Gemstone Legal Financial Stability Scorecard.
A simple solution
The Financial Stability Scorecard is a unique, free online resource which helps law firms to meet their financial, operational and regulatory obligations.
Answering a series of ‘yes/no style’ questions (without the need for sensitive financial information), the scorecard will outline what is going well and identify areas for improvement and concern across 3 key areas:
- Financial Management
- Cash Management
No sensitive financial information is required, and the exercise takes less than 5 minutes to complete.