Thursday, July 19, 2007 7:36 AM
Tom Collins at More Partner Income has written a series of interesting posts this year on the topic of law firm profitability. A common thread in these posts is David Maister’s Law Practice Business Model that clearly identifie[s] the variables determining law firm profitability.
In the posts Maister's Law Firm Recipe for Success, Law Firm Business Management, Getting It Right, and Steering a Law Firm for Financial Success, Mr. Collins discusses the Model that Mr. Maister apparently created back in early 1980s.
Maister’s model is an essential tool for forecasting and estimating per-partner income. It is a tool for expressing the firm’s financial targets and measuring progress against them. It is the standard by which one firm can be compared financially to another.
Mr. Collins continues, noting that there are other factors that must be considered to give a complete picture. He also helps define each variable in the Model (see Law Firm Business Management, Getting It Right) to ensure the right numbers are entered into the calculation itself. Finally, attached to the above-noted post, he includes an Excel file to make the whole process even easier.
I found Mr. Collins' series to be enlightening on the subject of law firm profitability; you may as well.
Also, as a final note, the blawgsophere is fortunate enough to have David Maister himself as a contributor as well. He has been writing about diverse topics at Passion, People and Principles for some time now. You may want to add his blawg to your subsription list as well.
Good stuff.
Links: More Partner Income
Passion, People and Principles