Long Term Funding & Capitalisation - Toning up your Financial Muscle

Tutor: Nick Jarrett-Kerr  CPD Hours: 20 hrs   Duration: 3 months

Course Cost: £1395

We enter the second decade of the twenty-first century with many law firms at the limits of their ability to increase their capital base or actually under-capitalised. Most firms continue to be sufficiently well capitalised to remain liquid – in other words to convert their work into cash sufficiently quickly to cover current liabilities - and to fund partner drawings and distributions. They however lack the capital base to invest, to grow or in some cases to compete in the new world.

This will undoubtedly affect the ability of the majority of UK law firms both to continue to develop and compete as traditional law firms and to face or embrace the new competitive pressures and business models in play following the Legal Services Act. 

This course will enable participants to understand balance sheet issues and to consider and optimize the capital ‘shape’ of the firm. It will help them work through the long term funding needs of the firm and to understand how new projects may impact on balance sheet strength as well as future profitability. The course will also help participants to balance their capital needs between equity (partner’s capital) and coherent levels of borrowing as well as understanding the advantages and disadvantages of seeking external investment

This course is will help to resolve these typical business problems:-

• What is the relationship between working capital, fee cash and our cash flow forecasts?
• Why should we focus on anything but the Profit and Loss Account?
• What are the assets of the firm which make us competitive and profitable?
• What is a safe and attainable level of borrowing for the firm?
• What is the right level of partners fixed capital for our firm?
• What is the relationship between partners, fixed capital, current accounts and tax reserves?
• How much capital do we need to grow and where will this come from?
• Do we in fact have any investment capacity to self-finance a successful future?
• What do investors look for in a law firm?
• How are law firms valued?

• Attain a level of capital efficiency in your firm.
• Understand how to balance the various sources of capital.
• Manage working capital efficiently.
• Decide levels of partners capital and current accounts.
• Refine the firm’s drawings policies in the light of expected levels of profit and the need for working capital.
• Plan for future investment.
• Consider the possibility of sale, partial sale or the acquisition of external investment.
• Create a coherent and consistent (but fair) set of partnership/membership rules and disciplines which set fair performance expectations for partners.

Download an application form here