At the end of 2021, managing partners will sum up their law firms’ revenues to determine areas of focus for the next fiscal year, but there’s something individual lawyers can be doing now to make this data even more useful.
Right now, halfway through the year, ask your people to project revenues on their own matters for the next three months. You’ll find that some lawyers are better than others at anticipating the amount of money they’ll bring in.
When it comes to budgeting for the future and managing caseloads, it’s extremely valuable for a lawyer to be able to accurately predict their revenues. If a certain attorney keeps going after contingency fee matters with huge payouts but they’re not winning those cases, recognizing that pattern could lead them to prioritize hourly work or pursue contingency cases only when specific prerequisites are met.
Law firm leaders should take this time to gather revenue projections on a lawyer-by-lawyer basis so that when the end of the year rolls around, they have those estimates to compare with the actual results. This skill can be taught, but firms first want to understand who’s in need of that training and how exactly each could improve. For some, they may be wildly overestimating their outcomes, while other lawyers may be unduly pessimistic.
Estimated future revenues also play a huge role in hiring and promotions, and the ability to create an accurate picture of what an individual’s or a firm’s finances will look like in six months or a year is important both for the leaders making these decisions and for the attorneys looking to move up.