Benchmarking

Benchmarking

This subtopic will help you to:

•
understand and interpret law firm accounts
•
measure the financial performance of your firm and benchmark financial data to compare performance against previous years and competitors

How to read and understand the financial accounts of a law firm

Law firms need to look at their accounts to see how they are performing and understand what needs to be done to improve performance.

What is available in a set of year-end accounts will depend upon the:

•
legal constitution of the firm
•
rules that govern the form and content of the accounts

In addition to year-end accounts, you may elect to produce monthly or quarterly management accounts which should be regularly reviewed.

What financial statements make up a set of financial accounts?

Every firm needs to prepare a set of annual financial statements that make up the firm’s financial accounts. There are six financial statements potentially available:

•
profit and loss account
•
balance

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