Intelliteach Publish Inaugural Guru’s Guide to Law Firm Profitability

Global News

11
Nov
2013

Editor

Intelliteach, a comprehensive provider of business management and IT services to law firms, today announced the availability of the Guru’s Guide to Law Firm Profitability, a 12 page guide featuring unique benchmark data including most requested billing statistics, collection metrics, revenue recovery ratios, and analysis of industry collection realization by firm size.

The Guru Guide to Law Firm Profitability, based on the collection and analysis of more than one billion law firm accounting transactions, provides insight into financial metrics and benchmarks that law firm managers can use to make better decisions about how their firms operate. 

The Guru Guide to Law Firm Profitability is based on business analytics data collected and analyzed from hundreds of law firms of various sizes, locations, practice areas, and compensation plans.  The Guru Guide provides unique benchmark data relating to the most requested billing statistics, collection statistics, and revenue recovery ratios in the industry; and analysis of industry collection realization by firm size. Some key findings include:

• Guru data shows that law firms spend just over 11% of revenue on non-secretarial & non-occupancy staff functions (back office). Finance, Administration & Office and Information Technology represent 69% of total back-office expenditures
• Small firms excel at billing quickly (less ‘days of unbilled’) as well as getting high billing realization
• Within the past five years, Recovery Rates (as measured as a collection percentage from the Total Open A/R Balance Pool) have decreased from 83.08% in 2008 to 78.08% in 2012
• The industry averages just 44.1% collection rate when invoices pass the 180 days old mark
• Moving up collections activities by 30 days, from say 90 to 60 days, increases the likelihood of collections by 15%
• The average firm has 73 days of A/R in inventory, an increase of three days over the last 12 months.

“It remains abundantly clear that law firm leaders are under continual pressure to maximize efficiencies and revenue opportunities so having a benchmark report like the Law Firm Profitability Guru Guide will prove invaluable in making sound financial decisions,” stated Seelin Naidoo, CEO, Intelliteach. “Now, for the first time, we are making certain benchmark data available to help firm leaders see how these statistics compare to their own, and determine for themselves whether outsourced accounting and accounts receivable functions could help them run a more efficient operation.”