ALPMA LAUNCHES FINANCIAL BENCHMARKING STUDY TO HELP LAW FIRMS COMPARE PERFORMANCE & FINANCIAL HEALTH

The Australian Legal Practice Management Association (ALPMA) today launched its third annual Legal Industry Financial Performance Benchmarking Study, conducted in partnership with Crowe Horwath Professional Practice Advisory.

The benchmarking study helps law firms benchmark their financial performance against their peers and gain a deep insight into the relative financial health of their practice. 

Free participation for all Australasian Law Firms

For the first time this year, all Australasian law firms will be able to participate in the Study at no cost. 

“Typically this kind of in-depth financial analysis and critical business insight comes with a significant price tag, that not all law firms can afford,” Mr McLean said.  “By providing free participation for all (not just ALPMA members), every legal practice – regardless of size - can benefit and the depth and quality of the data gathered will also be further strengthened.”

To participate, click on the following link:  ALPMA Legal Industry Financial Performance Benchmarking Study On-line Survey

Industry-Wide Financial Metrics for Law Firms

“Having a consistent, industry-wide set of financial metrics by which law firms can measure their financial health and performance over time helps both professional practice managers and managing partners as they lead their firms through the current turbulent environment,” ALPMA National President and General Manager at Coleman Greig, Mr Warrick McLean said.  

“It also supports ALPMA’s mission to promote excellent and innovation in legal practice management and to enhance the theoretical and practical understanding, skills and knowledge of legal practice management professionals,” Mr McLean said.

The study uses Crowe Horwath’s proprietary benchmarking tool, Open Measures and highlights eight key financial indicators of practice health. Key measures benchmarked in the study include profitability, work in progress days, debtor’s days, labour cost, rent, and working capital. 

“Law firms can interactively compare their performance against the industry using a number of filters including state, practice type and size of firm. This allows users to make their analysis more relevant and meaningful.” Crowe Horwath Principal, Andrew Chen said.

“As well as benchmarking performance for the last financial year this year we are also asking firms about their about their expectations for the coming year.  We know there will be a high level of interest and value in these projections.” Mr Chen said.

Key Challenges for Law Firms

The 2011 Financial Performance Benchmarking Study identified a downward trend in overall profitability compared to 2010, as the impact of Australia’s two speed economy took effect.  The study also identified the need for appropriate business management in law as critical to operating a successful firm. 

How to Participate

Participating firms complete an on-line survey that requires information from their 2011/12 financial year results.   This data is analysed using Open Measures, Crowe Horwath’s proprietary benchmarking software.  

Information relating to each individual firm’s performance is treated as strictly confidential.  Individual firms will be able to see their own specific data that they have submitted for analysis. However, data relating to the other participating firms will only be available for comparison and analysis in aggregate form. Detailed guidelines are provided to all participants.  

Costs & Timeframe

The study opens on 28 November, 2012 and the survey tool will close to participants on 25 January, 2013.   Participants will be able to view the results at no cost from 13 February.  Companies who do not participate may purchase access to Open Measures to view the results from 20 February, 2013. The cost is $550 for ALPMA members, $2,200 for non-members.

ENDS.

About ALPMA

The Australian Legal Practice Management Association, (ALPMA), is the peak Australian body representing managers and lawyers with a legal practice management role.  ALPMA provides an authoritative voice on issues relevant to legal practice management.  Members of ALPMA provide professional management services to legal practices in areas of financial management, strategic management, technology, human resources, marketing and information services and technology.  

About Crowe Horwath

Crowe Horwath Australia is part of the WHK Group Limited - the fifth largest accounting and advisory firm in Australasia and Australia’s largest provider of accounting and financial services to SMEs  with more than 3,000 professionals working in 120 offices in Australia and New Zealand.  Crowe Horwath Australia is a member of Crowe Horwath International – one of the largest professional services networks in the world.