8FEBRUARY 2020New Outlook for Legal Industry FP&A: Embracing Change to Modernize the Business of LawI joined Goodwin, a top 50 global law firm, five years ago as Director of Financial Planning and Analysis, having spent 20 years at international management consultancy and accountancy firms. At the time, many considered legal at least five to 10 years behind other professional services firms in how our industry ran its business operations. When I arrived, Goodwin was already focused on the significant disruption, consolidation and modernization in the industry. The firm was embarking on a quest to redefine its business model and operations to become a market leader in the business of law, and I wanted to help senior management implement its ambitious strategic plan. Part of that implementation involved taking a hard look at systems and processes.Let me take a step back to provide some context. First, lawyers and law firms are generally known for their conservative approach and do not tend to embrace change quickly. Second, large US-based law firms operate on a cash accounting basis, so while there is no need to deal with accrual accounting and revenue recognition standards (at least not in the US), it also means that cash is king and collections (or lack thereof) can have an immediate impact on operational and capital expenditures. Third, in a partnership, all profits generated in any given year are paid out to the partners. Consequently, significant spikes in revenue tend to happen over the last quarter of the fiscal year and are sometimes coupled with a reluctance to make investments that might only reap rewards in the future.Coming to Goodwin, I was joining a firm that recognized and embraced the need for change, and where leadership was investing in the people and technology needed to effect that change. Not surprisingly, however, I arrived to find operations By Jon Kanter, CFO, GoodwinIN MYOPINION
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