Fractional CFO for Law Firms
Most law firms are managed on cash in the bank and a sense of how busy everyone feels. The numbers that actually explain profitability are usually sitting unexamined in the practice management system.
The Financial Challenges Law Firms & Legal Practices Face
Realization and collection nobody tracks
The gap between hours worked, hours billed and cash collected is where law firm profitability lives. Firms that do not measure both rates separately are usually surprised by how much work they are giving away.
Unbilled WIP ageing quietly
Time sitting unbilled is the least visible asset a firm owns and the fastest depreciating. The longer it ages the less of it ever converts, and few firms report on it monthly.
Partner compensation set by negotiation, not economics
Origination, working attribution and management contribution get argued about annually without a model underneath. That is a recurring source of friction and, at the extreme, of partner departures.
Practice groups cross-subsidising invisibly
One group frequently funds another for years without anyone quantifying it, because overhead is allocated by headcount rather than actual consumption.
How We Help
Realization, collection and leverage reported monthly
Measured separately by timekeeper, matter type and practice group — because they fail for different reasons.
Unbilled WIP and AR ageing discipline
A billing cadence with owners and dates, so time converts to cash before it decays.
Partner compensation modelling
Scenarios you can run before the compensation conversation, grounded in origination, working attribution and management contribution.
Practice group P&L with honest overhead allocation
So you can see which groups genuinely carry the firm and which are being carried.
Matter-level profitability
Especially for flat-fee and contingency work, where the economics are decided at intake rather than at billing.
Trust account controls
Reconciliation discipline and segregation that keeps IOLTA handling clean. We are not your bar compliance counsel, but the accounting side should never be why you have a problem.
What we watch in a law firm
Realization and collection, separately
One measures whether recorded time gets billed, the other whether billed work gets paid. They fail for different reasons and need different fixes.
Unbilled WIP ageing
Time sitting unbilled decays. We track how old it is and whose it is, because a monthly number nobody owns never improves.
Leverage by practice group
Associate-to-partner ratios and how they translate into margin. Leverage is the main structural driver of firm profitability and it is rarely reported.
Matter margin at intake
For flat-fee and contingency work the economics are decided when you take the case, not when you bill it.
Services
Fractional CFO
Senior finance leadership part-time, with controller support underneath it.
Fractional CMO
Marketing strategy and demand generation held to the same standard as the numbers.
Exit Planning
Clean books, a defensible story and control of the narrative before diligence starts.
72-Hour Cash Flow
A fast, honest read on your cash position when the answer cannot wait.
Frequently Asked Questions
What does a fractional CFO do for a law firm?
Reports the metrics that actually explain firm profitability — realization, collection, leverage, unbilled WIP ageing, practice-group P&L and matter-level margin — and then works with the partners on what to do about them. That includes compensation modelling, pricing and capacity planning alongside standard CFO work.
How do you handle trust and IOLTA accounting?
With strict segregation and monthly three-way reconciliation between the trust ledger, the client ledgers and the bank. To be clear about scope: we handle the accounting discipline, not bar compliance advice. Rules vary by jurisdiction and your ethics counsel owns that call — our job is making sure the books are never the reason something goes wrong.
Can you help with partner compensation?
We build the model, not the decision. That means clean data on origination, working attribution, realization and management contribution, and the ability to run scenarios before the conversation. What the partnership does with it is the partnership's business, but arguing from a shared model beats arguing from impressions.
What is the difference between realization and collection?
Realization is the share of recorded time that gets billed. Collection is the share of billed work that gets paid. They fail for different reasons — realization from write-downs and unbilled time, collection from client credit and follow-up — so a firm tracking only one is missing half the leak.
Do you work with contingency practices?
Yes, though the finance question is different. Contingency work is a portfolio problem: case investment, expected value, duration and the cash to carry cases to resolution. That needs forecasting built around case inventory rather than around billable hours.
Ready to talk about your legal business?
A conversation, not a pitch. If we are not the right fit we will tell you.
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