The legal services industry is a financial powerhouse in the US market, generating more than $370 billion in revenue in 2022 alone. While running a successful firm requires legal expertise, it also demands effective financial management and strategic operation planning. Regardless of the size and complexity of the firm, complimenting those delivering legal services with an experienced C-suite is critical to the overall success and sustainability of any firm.
If a law firm is not in the financial position to hire a full-time Chief Financial Officer or Chief Operating Officer, bringing in a Fractional CFO or COO can prove beneficial. At 3sixty Consulting Group, we work with law firms to develop their current operations, processes, and systems to meet the growing needs of the legal industry. By leveraging our years of experience, we pinpoint exact areas of opportunity and deliver solutions to ensure success.
How Can a Fractional Chief Financial Officer Help Your Law Firm?
A Chief Financial Officer is critical in influencing a law firm’s strategy and growth. They are responsible for optimizing financial structures and performance while providing a roadmap for the future to ensure the firm’s financial strength. More specifically, a CFO’s role may include:
- Ensuring that financial objectives are clear, firm-wide
- Establishing a strategic financial plan for the firm
- Maximizing revenue by meeting KPIs relating to billing realization, collection realization, and staff utilization
- Advising on capital structure, taxes, and IRS compliance
- Identifying initiatives that will create value, such as maximizing billing rates, leverage analysis, and review of partner and associate bonus structures
- Developing relationships between executive leadership, stakeholders, and partners
- Establishing forecasting and budgeting models to provide relevant and timely data
- Monitoring the firm’s compensation system and making recommendations for improvement
- Providing guidance during a merger, acquisition, or sale of a law firm
- Reducing costs by eliminating waste and streamlining processes
Benefits of Working with a Fractional CFO
While a CFO is pivotal in ensuring the financial success of a law firm, a growing firm may not have the budget to hire a full-time and permanent CFO. With changing capital structures, technology advancements, and the ever-evolving nature of corporate practices, more companies are looking to fill the CFO role through non-traditional avenues.
Fractional CFOs are a valuable alternative for law firms that seek executive leadership and financial guidance but are not yet large enough to support a full-time officer. Fractional CFOs are hired on a contractual or part-time basis. Many companies opt for fractional services because they offer flexibility while playing a valuable role in guiding financial decision-making.
How Can a Fractional Chief Operating Officer Help Your Law Firm?
A Chief Operating Officer helps ensure that a law firm runs seamlessly, effectively, and profitably. They manage a firm’s day-to-day administrative and operational functions, identifying necessary changes and working to increase efficiency. As a valuable member of the C-suite leadership team, a COO’s responsibilities may include:
- Translating the law firm’s goals into operational actions
- Building integrated operations for the firm
- Managing and streamlining staffing processes
- Allocating resources to optimize value
- Implementing processes and solutions to address productivity challenges
- Analyzing Key Performance Indicators (KPI) to offer innovative operating solutions
- Identifying opportunities for improvement in technology to help the firm leverage its software to run lean and profitable
- Providing objective and insightful strategic input
Benefits of Working with a Fractional COO
A Fractional Chief Operating Officer can execute all tasks of a traditional COO role; however, a Fractional COO offers their services on a temporary, part-time, or otherwise contractual basis. They are an outsourced professional who works with a law firm at any level of frequency, including project level.
Many law firms are turning to fractional consultants for high-level expertise without the need to budget for C-suite salary and benefits. Fractional COOs offer a cost-effective alternative. They provide valuable guidance and insight that is informed by years of experience with a diverse range of law firms and businesses. One of the most notable benefits is that when a law firm brings on a Fractional COO, the lawyers and managing attorneys can focus on their clients rather than business operations and strategy.
Have Additional Questions? Contact 3sixty Consulting Group
While the benefits of working with a Fractional CFO or COO vary depending on the law firm’s business objectives, establishing this leadership can make the difference between stagnating and successfully scaling.
With years of experience and a vast knowledge of emerging industry trends, 3sixty Consulting Group can provide valuable guidance regarding your law firm’s most important decisions. We evaluate a company holistically, identifying underlying issues and key growth areas. Our goal is to help law firms sustain success over the long term. To learn how 3sixty Consulting Group can benefit your legal practice, please reach out to us at (404) 398-3888.