2022 EDITION

SUPPORTED BY

Implementing
Financial Intelligence
Giving Law Firms a Competitive Advantage
in 2022 and Beyond

GLOBAL SURVEY
 PAGE 2

Implementing financial intelligence to give law firms

a competitive advantage in 2022 and beyond
In an effort to identify key trends among law firm financial leaders a consortium
consisting of BigHand, BRYTER, and SurePoint Technologies engaged Ari Kaplan Advisors
to interview 30 professionals about the elevated expectations of finance professionals,
the impact of the pandemic on the business of law, the application of data to
decision-making, the perception of profitability, and the pace of innovation.

Ari Kaplan personally spoke with 20 CFOs, seven finance directors (three of which serve
as the CFO since they are the department leader), and three accounting managers at
law firms throughout the United States of various sizes, with the smallest employing
12 lawyers, and the largest featuring over 1500. The median size was 103 lawyers.

The respondents are generally responsible for traditional accounting, billing, collections,
and treasury functions, butseveral have oversight for risk management, operations,
pricing, and strategy.

The results revealed a striking shift in the role of law firm finance leaders, both in their
value and impact. Many are using data to drive change in their organizations, amplifying
the power of profitability, and leveraging their skill to fuel innovation. Throughout the
pandemic, the reliance on the individuals who track revenues and expenses helped to
solidify their seats at the management table in this uncertain and shifting market. This
report captures their perspectives and highlights the influence of finance teams on the
road ahead for law firms.
CONTENTS PAGE 3

Contents
04 Executive Summary

The Transformation of the Law Firm

06 Finance Leader

Leveraging Data for Decision-Making

11 and Storytelling

16 Empowering Profitability

Finance Leaders Are Becoming

18 Catalysts for Innovation

20 The Future

21 About Us
EXECUTIVE SUMMARY
Executive Summary
The Transformation
of the Law Firm Finance Leader
67% of the respondents reported that the skills required for
financial leaders have changed. They now have expanded respon-
sibilities, must adapt to new challenges, and wield increasingly
higher levels of influence to positively impactdecisions at their
organizations. 43% indicated that their jobs have changed beyond
the traditional remit of a law firm financial leader, consistent with
the legal industry’s expanding focus on the business of law.
Collaboration is Key
Many finance professionals spoke of the need to build consensus
and work together with individuals at all levels to simplify com-
plex concepts to prompt action. “You need people skills for team
building and collaboration, which is increasingly more important
as staff numbers decrease,” said one. This alignment of teams is
generally related to the interest in leveraging advanced business
intelligence to harmonize a law firm’s data to improve outcomes
and opportunities.
Value is Directly Related to Trust
A key component of value is trust and 87% of the respondents
rated being a trusted advisor to their law firm’s partners and
management team at a five out of five. 90% further reported that
data can help finance teams build that trust. “The amount of infor-
mation that is being distributed by the accounting team on a daily
basis is constant and the partners rely heavily on those details to
make decisions,” one participant advised.
PAGE 4
Displaying Emotional Intelligence
Distinguishes Financial Leaders
To supplement the high-level analysis, technological proficiency,
data science skills, and financial modeling, there is critical value
associated with emotional intelligence, particularly for finance
leaders. “You need emotional leadership to manage remote teams;
lawyers can be effective working remotely, but it takes a different
skill set to understand the productivity levels of staff members,”
noted one professional.
Finance Professionals Wield Significant
Influence in Their Law Firms
When asked how much influence they have on the decision-mak-
ing of other departments at their firms, almost half of the
respondents reported that they have significant sway, with 47%
indicating their level of influence at a four or five out of five. 40%
of the respondents advised the CFO is responsible for evaluating
and approving most decisions, and 60% of the respondents are
involved in the procurement and buying decisions for technology
at their firms.
Beyond the Numbers into Technology
While most professionals have needed to enhance their technolo-
gy acumen, finance professionals are being tasked with assessing
tools as well. “The CFO is being asked to look at the firm’s tech-
nology portfolio to find ways to run the business more efficiently,”
said a finance leader.
EXECUTIVE SUMMARY
Leveraging Data for Decision-Making
and Storytelling
One of the essential responsibilities of law firm finance leaders is
to gather, interpret, and distribute data on which practice groups,
managing partners, and executive teams can rely to drive change
and progress at the firm. As organizations continue to leverage
information to drive efficiencies, the delivery of key details will
impact how they optimize the activities of their professionals to
focus more time on higher-value, client service.
Hybrid Work is Increasing the Importance
of Data Accessibility
A majority of the respondents indicated that there are no chal-
lenges to accessing and viewing the reports they need in the way
they need them, with 70% ranking their level of difficulty at a one
or two out of five. 90% have access to the data they need to make
informed business decisions.The availability of this information
will be more important in a hybrid workplace, according to the
77% of respondents, who ranked access to it at a four or five out
of five.
Efficiency Gains Are Fueling New
Initiatives for Innovation
When asked to identify the main drivers of their firms’ technology
usage, 63% of the respondents highlighted increased efficiency,
followed by 13% who selected risk avoidance and management.
More than a quarter of the participants (27%) are exploring other
service delivery models as a tactic to increase profitability, such as
selling products vs selling hours.
PAGE 5
Empowering Profitability
When asked about analyzing profitability, 17% of the respondents
admitted that their firms do not measure it at all. The remaining
83% measure it in some way, but their methods varied. Some sim-
ply compare collections to overhead, while others apply a more
complex formula to identify more granular levels of profitability.
15% calculate it at the firm level, 23% do so at the attorney level,
and 33% determine profitability at the matter level.
Revenue is Vital to Improving Profitability
Although a majority of the respondents (53%) expect to increase
efficiency over the next five years to increase profitability, 83% are
focused on increasing revenue. 60% of the respondents rated the
value of increasing profit margins as a means of increasing profit-
ability as extremely important (five out of five) or very important
(four out of five).
Finance Leaders Are Becoming Catalysts
for Innovation
Consistent with their contributions to fueling growth and efficien-
cy at their law firms, about half of the respondents (47%) reported
spending between 10-20% of their time focusing on strategy and
innovation.
Data Gives Firms a Competitive Advantage
93% of participants reported that reliable, timely data can help
law firms gain a competitive edge, particularly since it allows
them to make decisions quickly. 90% of the respondents indicated
that data can help finance teams become trusted advisors to firm
partners and management.

The transformation of the law
firm finance leader
As reported in ‘The Rise of the Legal CFO’1 by Raconteur and
BigHand back in 2018, the traditional role of the legal CFO has
shifted. The report predicted:
“At a time when tightening margins across the legal industry are
leading to a renewed focus being placed on ensuring profitability,
top-tier CFOs are expected to look for proactive solutions. This
more hands-on approach can help educate lawyers and ensure
they clearly understand financial considerations, when making
more business-focused decisions. For example, there would tra-
ditionally be little overlap between the finance function and tech
operations. But forwardthinking CFOs see the value of investing
in technologies that can address long-standing operational inef-
ficiencies, as well as trimming unnecessary costs. Leading CFOs
can become change agents within their firms by championing the
implementation of transformative technologies.”
Fast forward to March of 2020, the pandemic forced law firms to
reconsider their entire fiscal profile and one of the first calls by
managing partners and leadership committees was to the chief
financial officer and members of the finance team to navigate
what was at that moment an unchartered path forward. Around
the world, the stock markets were in a free fall, most people
were forced to remain in their homes, and there was an uneven
distribution of basic technological equipment and services. The
biggest challenge for many law firms was not practicing law, but
sustaining the business of doing so.
1 CFO M/THELGA.PS:W2BIND
PAGE 6
What started with handling furloughs, PPP loan applications,
and questions about a firm’s financial health has evolved into
addressing a war for talent, hybrid work schedules, and budgets
for a future filled with unknowns. Financial leadership, now more
than ever, is at the heart of maintaining and driving success in a
law firm. “[At the height of the pandemic], there was more interac-
tion due to the uncertainty of the economic climate so they paid
[greater] attention to the numbers given the difficult decisions; I
was also the point person to secure the PPP loans, which created
a closer working relationship with some of the partners,” said a
participant.
Given this shift, it was not surprising that 67% of the respondents
reported that the skills required for financial leaders have changed.
They now have expanded responsibilities, must adapt to new
challenges, and wield increasingly higher levels of influence to
positively impact decisions at their organizations.
67%
AGREE THAT THE SKILLSET REQUIRED FOR
CFOS AND FINANCE LEADERS IN LAW FIRMS
HAS CHANGED.
THE TRANSFORMATION OF THE LAW FIRM FINANCE LEADER PAGE 7

In fact, 43% indicated that their jobs have changed beyond the
traditional remit of a law firm financial leader. “The role used to
be very transactional and included booking financial data, but it
did not require any advice on financial matters; the lawyers have
made a conscious effort to give more power to the professional
staff and the management committee leaves many decisions
to the organization’s C-team,” explained one respondent, whose
experience is consistent with the increased emphasis on the busi-
ness of law. “CFOs tend to be the go-to leaders at firms and are
the heirs apparent to the COO,” noted another.
For the third of the respondents who attribute the changes in
their roles specifically to the pandemic or the shift to a hybrid
workplace, the issues were often structural. “The finance depart-
ment has grown in the pandemic as a quarter to a third of the
team has joined the firm over the past 18 months; there are also
a number of professionals who are now permanently remote since
they live in an area where there is no office,” reported one partici-
pant. “We have pared down on our back-office support so I handle
more work; we lost people and have not replaced them,” said
another.

There was a consensus that changes have
occurred in four specific areas:
REEVALUATING AND EMPHASIZING PROFITABILITY
“Firms are much more interested in profitability so the CFO is
providing much closer guidance beyond macro firm economics to
individual and partnerlevel insights.”
For most, however, “It has not changed at all, but it has required
an adjustment to remote work and remote employees,” said one.
“The content hasn’t changed, but it is more of a change in the lo-
cation,” added a peer. “It has not changed as much as I would have
thought; it amazed me at how much can be done remotely, which
is why it is so difficult to persuade professionals to return to the
office,” offered another colleague.

IMPROVING FINANCIAL HYGIENE

Given the elevation and expansion of the role, there are an array
“As we have pushed for more financial management as opposed to
of new skills that the respondents highlighted are now essential
finance reporting, it has affected my role in a good way as I have
for success. “A CFO needs to be able to team, motivate, and coa-
been tasked with implementing
lesce people around an idea, which is a significant change in the
practice group financial structures to help leaders understand
role from years ago,” summarized one participant. “There are so
finance and drive change.”
many more components to law firm finance now, including pricing,
financial reporting, and compliance, among others,” said another.
EMPHASIZING EXPENSE MANAGEMENT
“We are diving deeper into expenses to identify the impact of
certain spending [and] we have to make stronger cases for capital
expenses.”

EMBRACING DATA- DRIVEN DECISION - MAKING

“We have made more investments in resources and tools to devel-
op alternative fee arrangement (AFA) opportunities to better price
and sell what we have to offer to clients with a complex series of
data science-driven analytics that unitize what we do.”
THE TRANSFORMATION OF THE LAW FIRM FINANCE LEADER
Communication Skills Matter as Much
as Accounting Acumen
Many cited the need to be a strong communicator because the
work and the impact of the finance team now have much broader
consequences. “Conversations with the shareholders have become
deeper because they need a greater understanding of what is
happening in the market; the issues have also become more
complex, which requires finance professionals to convey their
points more effectively,” advised a finance leader. “You are running
a business so you need to educate partners about the things that
are most important,” added a peer.
The pandemic heightened the need to deliver economic messages
in a meaningful way. “Since we are often engaging with lawyers
and leaders at the firm remotely, we need to be more specific;
there is more direct communication with the lawyers, who are not
necessarily used to engaging with finance professionals so the
finance team needs to adapt,” noted one respondent. That adapt-
ability is increasing their influence because as they enable greater
access to data and help leaders make meaningful decisions, they
build further trust and reliability.
In fact, the strongest leaders are able to customize their approach,
rather than require others to shift their mindset. “It is critical to be
able to [adjust] to different styles and preferences,” remarked one
professional. “Good communication skills, patience, and the ability
to know your audience and handle the different personalities [are
essential],” echoed a peer.
Collaboration is Key
Many finance professionals spoke of the need to build consensus
and work together with individuals at all levels to simplify com-
plex concepts to prompt action. “You need people skills for team
building and collaboration, which is increasingly more important
as staff numbers decrease,” said one. “It is impossible to do the
job without strong collaboration skills,” added another. “There is a
greater need to be collaborative and accommodate the preferenc-
es of those on different teams,” offered a third.
PAGE 8
Strategy is Frequently the Subject
of Conversation
Knowing the numbers is no longer as important as applying them
to help plan and produce results. “Law firms are looking at a much
more strategic role and position in finance; you need to be able to
offer more strategic guidance,” reported a participant. “I also need
to wear a strategic hat as the practice group leaders don’t know
what to ask for so they often need me to help guide them on
prioritizing certain issues,” noted another.
Beyond the Numbers into Technology
While most professionals have needed to enhance their technolo-
gy acumen, finance professionals are being tasked with assessing
tools as well. “The CFO is being asked to look at the firm’s tech-
nology portfolio to find ways to run the business more efficiently,”
said a respondent. “It is critical to persuade firm leaders to invest
in new tools that will enhance the mission of the finance depart-
ment; you need to generate support among the firm’s lawyers,”
explained another.
Making Determinations with Data
In addition to technology, the metrics that the array of applica-
tions law firms deploy are equally as useful and powerful. “There
are more analytics and data; the business leaders of law firms
are closely tracking all activities [and] as a result, finance leaders
need to be more adept at understanding data,” said a participant
“There is more pressure on analytics skills than a CFO would have
needed 10 years ago; while the job has traditional responsibilities,
it is helpful if you understand software and data as it gets more
complex,” added another. “Making predictions based on data and
also translating that data into action is critical; we have to make
sure the needle is not moving too much in the wrong direction,”
offered a third.
THE TRANSFORMATION OF THE LAW FIRM FINANCE LEADER
Familiarity with Financial Modeling
is Now a Factor
You still, however, need to know the numbers. “Soft skills have
changed, such as communications, but technical financial skills
have not,” said one participant. “A CPA and MBA are increasingly
important because you need to understand analytics and mode-
ling for planning today more than in the past,” offered another.
“The job now requires more familiarity with financial modeling
and internal projections; it was previously much less complicated,”
said a third.
Displaying Emotional Intelligence
Distinguishes Financial Leaders
To supplement the high-level analysis, technological proficiency,
data science skills, and financial modeling, there is critical value
associated with emotional intelligence, particularly for finance
leaders. “You need emotional leadership to manage remote teams;
lawyers can be effective working remotely, but it takes a different
skill set to understand the productivity levels of staff members,”
noted one professional. “[You need] phenomenal communication
skills, high emotional intelligence, [and the ability] to pick up on
the white noise, i.e., what is not being said, [such as] body
language, even when you cannot see the body,” concluded another.
Attracting and Retaining Talent is Tricky
in the Current Market
While finance professionals can learn and hone the skills that fuel
their success, building teams is an obstacle in the current market.
As a result, they are often serving as ambassadors of their firms to
improve and optimize the hiring process. “Finding good talent is
the most significant challenge; if you’re really good in accounting
and finance, there are so many options available to you and the
law firm is not a sexy career opportunity,” remarked one respond-
ent.
“Finding and retaining the best quality and talented people is a
significant challenge; finance professionals do not need to have
law firm experience so they have more options and you are com-
peting with many more organizations for that talent,” added
another. “Hiring and retention are the biggest challenges now; it
is one of the craziest markets I have ever experienced,” offered a
third.
PAGE 9
Finance Professionals Wield Significant
Influence in Their Law Firms
When asked how much influence they have on the decision-mak-
ing of other departments at their firms, almost half of the
respondents reported that they have significant sway, with 47%
indicating their level of influence at a four or five out of five. “I
am in charge of everything at the firm aside from practicing law,”
explained one participant. “I make the final budget so if it entails
spend, I’m at a four; I also have a lot of back-channel influence
because of strong interpersonal relationships,” noted another.
In fact, in some organizations, forward-looking CFOs are an es-
sential part of helping the management committee transition to a
business of law-focused firm. In others, however, they have a more
limited role. “I’m an influencer, but I do not decide many things,
which I like because I don’t ultimately bear responsibility for
many decisions,” clarified one leader. “It depends because, during
budget season, I have more influence than at other times in the
year; I also prefer not to insert myself into another department’s
business unless I can be helpful or provide valuable input,” added
a peer.
Ultimately, 40% of the respondents advised that the CFO is
responsible for evaluating and approving most decisions. For
example, 60% of the respondents are involved in the procurement
and buying decisions for technology at their firms. “There are
certain decisions with which I am not involved, but I am a part of
most decisions; many law firms have parallel management teams,
one made up of lawyers, and one combined with lawyers and
professional staff,” a CFO explained. “The CFO indirectly vets and
approves most decisions because they generally have a budget
implication,” said another. “The CFO is involved in any decision
that involves a financial component, such as hiring, leasing, and
purchasing,” noted a third.
60%
OF CFOS AGREE THEY ARE INVOLVED IN THE
PROCUREMENT AND BUYING DECISIONS FOR
TECHNOLOGY AT THEIR FIRM.
THE TRANSFORMATION OF THE LAW FIRM FINANCE LEADER PAGE 10

Value is Directly Related to Trust
A key component of value is trust and 87% of the respondents
rated being a trusted advisor to their law firm’s partners and
management team at a five out of five. 90% further reported that
data can help finance teams build that trust. “The amount of infor-
mation that is being distributed by the accounting team on a daily
basis is constant and the partners rely heavily on those details
to make decisions,” one participant advised. “If a partner gets bad
information once or twice, they will mistrust the information and
[rely on] the client’s assessment of the information more than
what they receive from the finance team,” cautioned another.
BigHand’s 2021 Legal Pricing and Budgeting Report2 based on
responses from 800 senior legal professionals delved into the
quality and timeliness of the information available to law firms,
and found that many are relying on out-of-date information. When
reporting on profitability data, the information used by the firm is,
on average, more than three days old (both NA and UK). Without
real-time information, presented in easy-to-understand ways, such
as role-based dashboards, firms may struggle to provide vital fi-
nancial visibility at any level of the organization. In addition, many
firms are still reliant on inadequate tools, with Excel still widely
used (34%) to prepare and manage matter budgets, as reported in
BigHand’s 2020 Legal Pricing and Profitability Report.3
CFOs and Law Firm Finance Professionals
are Creating Value in Various Ways
From hiring and business development to cost-control and com-
pensation, finance leaders are impacting an array of decisions at
law firms, particularly if they are given the opportunity to do so.
“CFOs will offer the most value if they have that seat at the table
and contribute to strategic decisions about the future of the firm,”
said one respondent. “You have to try to strongly influence the
firm’s operations and make reliance on financial metrics part of
the culture; I regularly create metrics for the firm’s leaders to give
them a snapshot of how the firm is doing,” explained another. “We
can create the most value by providing the decision-makers with
the best data and a practical analysis of it [because] the lawyers
need to understand what they could and should do with the finan-
cial data we provide; we offer options for actions that the leaders
of the firm can take,” noted a third.

90%
REPORTED THAT DATA CAN HELP FINANCE
TEAMS BUILD THAT TRUST

2
3
LEVERAGING DATA FOR DECISION - MAKING AND STORYTELLING
Leveraging data for
decision-making and storytelling
One of the essential responsibilities of law firm finance leaders is
to gather, interpret, and distribute data on which practice groups,
managing partners, and executive teams can rely to drive change
and progress at the firm. As organizations continue to leverage
information to drive efficiencies, the delivery of key details will
impact how they optimize the activities of their professionals to
focus more time on higher-value, client service.
“There is no red light/green light to make a decision; you need
to tell a story with the data,” advised a participant. “My office is in
the business of explaining the data; we tell the story behind the
numbers, such as how we are doing compared to budget and why
or what hours and production look like,” said another noting, “we
should be able to understand and explain every metric.”
Those explanations are most meaningful when they help firms
navigate a path forward. “We use data to make projections and
how those expectations align with the firm’s strategic plan; for
example, we try to take historical data to identify trends that you
can project into the future to gauge cash flow and other metrics,”
said one leader. “Once you go through the exercise of gathering
and evaluating data, you can put pen to paper and validate certain
assumptions,” added a peer.
It is critical that the information that finance leaders use to
provide guidance is trustworthy and verifiable. “You need to have
a really tight process at the data entry stage; if you don’t have a
good consistent process, you cannot rely on your data; you also
have to know what you are measuring and what it is for because
you can then customize it,” a respondent commented.
PAGE 11
With trusted data at hand and an ability to provide actionable
intelligence based on it, finance leaders are deploying that knowl-
edge in different ways, though concentrated on productivity and
resource allocation. “I use data to assess workloads and allocate
resources; we look at total invoices processed and the amount
of those invoices, then we create rankings of the work applied to
certain
clients,” said one participant. “We generate a lot of metrics, par-
ticularly associated with the profitability of our work allocations,
such as where attorneys are used vs. paralegals,” offered another.
“We use it to gauge productivity and profitability,” added a third.
Even those who are not leveraging metrics to inform their strate-
gy are considering a different approach. “The firm does not use a
lot of data to make decisions, but that is changing,’ admitted one
leader. “We have a powerful business intelligence tool and are
using that to move toward a 75% data, 25% culture organization,
but we are typically a 25% data and 75% culture firm; data is
becoming a more widely respected and appreciated feature in our
decision-making,” said a colleague.
LEVERAGING DATA FOR DECISION - MAKING AND STORYTELLING
Keeping Track of Key Performance
Indicators
When asked to list their most important KPIs, all of the respond-
ents referenced billable hours among them, but the combinations
varied. The increased use of alternative fee arrangements seems
to be impacting how firms look at their information.
“Billable hours, utilization, and realization due to AFAs; we also
have metrics specific to AFAs to understand how we are perform-
ing based on the budget which could increase or decrease our risk
on the AFAs,” explained one leader. “Profitability, especially given
our alternative fee structures, billable hours, and budget,” said
another. “Realization, utilization, and margins are the three most
important KPIs,” remarked a third.
BigHand’s 2021 research4 found that 76% are planning to intro-
duce a legal pricing solution in the next two years. Law firms are,
therefore, actively looking to achieve better financial outcomes
with tools that provide data-driven budgets and costs, better
resource plans, lower write-offs, and clear client reporting.
Strengths and weakness in the legal market are also influencing
this effort. “I keep a close eye on realization and rates keep rising,
but we hesitate to raise them too much; as rates rise, I expect
realization to drop, but it is not, so if hours come in and the
4
PAGE 12
realization rates hold, I know exactly what type of year we will
have,” suggested one participant. “I spend a decent chunk of time
looking at write-downs and write-offs and why, rather than simply
at realization; I want the data to tell me a story and my KPIs tend
to be more qualitative than quantitative,” said another.
Payroll and expenses are also important data points. “I look at
data all the time and want to see the flow of everything; there
is a lot of introspection and change happening as a result of the
pandemic,” admitted one respondent.
40% of the finance leaders who contributed to this research lever-
age data beyond financial metrics to enhance their decision-mak-
ing. For example, one highlighted the value of monitoring employ-
ee satisfaction. “I spend a lot of my time gauging the overall mood
and listening to the commentary as the health of an organization
is often dictated by the mood of its people; happy cows make
good cheese,” the leader said. “We use a lot of marketing data
in addition to financial metrics and connect it back to business
development in the pipeline,” added a colleague.
LEVERAGING DATA FOR DECISION - MAKING AND STORYTELLING PAGE 13

DO YOU FEEL THAT YOU HAVE ACCESS TO THE DATA YOU NEED TO
MAKE INFORMED BUSINESS DECISIONS?

100%

75%

50%

25%

0%
90% YES 10% NO

Driving Client Value with Data

Several financial leaders advised that sharing data directly with
clients can help the firm enhance its service and value. “If my cli-
ent is integrated into my system and can look at both our billing
and strategic approach, it brings value,” the participant said. “The
dashboard that the finance department offers to clients is an add-
ed value for them,” another added. “We created a portal to allow
our clients to access documents, which is especially important on
large matters; it adds value because it allows us to collaborate
more closely,” offered another.
There are also opportunities to simply use data to help clients
make better decisions. “We can introduce judicial analytics to help
them make litigation choices,” said one contributor. “I don’t think
firms do enough with data to market and build relationships;
those who are focused on business development can gain
advantages with clients by understanding certain metrics,”
another added.
Often, demonstrating the firm’s data intelligence capabilities
has meaningful value. “Firms can highlight ways that they have
added value to the client as meaningful data can help the client
recognize the true value of the work the firm provided,” advised a
participant. “For larger clients thatare demanding efficiencies, if
you can show them you are consistently using lower-priced fee
earners and where you spend time, that offers a lot of value,”
echoed a peer.
That said, “I don’t know if clients are looking to their lawyers for
financial data; they want work product, rather than data,” said one
leader. “I don’t think clients are using their e-billing systems to the
extent that they thought they would,” added another.
LEVERAGING DATA FOR DECISION - MAKING AND STORYTELLING
Hybrid Work is Increasing the Importance
of Data Accessibility
A majority of the respondents indicated that there are no chal-
lenges to accessing and viewing the reports they need in the way
they need them, with 70% ranking their level of difficulty at a one
or two out of five. 90% have access to the data they need to make
informed business decisions.
The availability of this information will be more important in
a hybrid workplace, according to the 77% of respondents, who
ranked access to it at a four or five out of five. “Access to data
becomes more important the less physically connected people
are and the less they can rely on face-to-face meetings or see and
speak to people about an issue; accessing the data is becoming
more vital because it is the only way to get the information you
need,” a leader explained. “It is incredibly important because the
working environment will now always be somewhat hybrid; most
of our systems are already in the cloud,” another advised. “In a
hybrid world, where professionals are not always in the office,
transparency is critical in effectively managing their practice,”
added a third.
Access to data in isolation is insufficient, so it is essential for
finance leaders to deliver any relevant information with an
equivalent level of analysis. “Unless you have a self-motivated,
proactive culture that seeks out the information, the best way for
financial professionals to be of value is to push the data to the
lawyers,” one admitted.
PAGE 14
“I don’t know the extent to which most lawyers use the data now;
they are relying on the finance team to identify unusual data
points and highlight them,” echoed a peer. “Access to data is very
important, but the interpretation of that data is critically impor-
tant since data is easily misconstrued,” another concurred.
Some were unconvinced and, in fact, more than a fifth (23%) of the
respondents rated the importance of data access at a three or be-
low. “I don’t even think most lawyers look at the financial reports
on a regular basis; most only want to know what their draw is and
what they will be paid,” said one. “Access to financial data doesn’t
make a difference whether you are in the office or at home, so the
hybrid-working world should not have an impact,” noted another.
Of course, building a commercial culture is important to changing
lawyers use of data, as the Legal Pricing and Budgeting Report
found: “Changes in lawyer behavior is being encouraged through
a combination of training (24%) and incentives to increase profit-
ability by 41%.”
LEVERAGING DATA FOR DECISION - MAKING AND STORYTELLING PAGE 15

Data Gives Firms a Competitive Advantage

93% of participants reported that reliable, timely data can help
law firms gain a competitive edge, particularly since it allows
them to make decisions quickly. “The shareholders want to make
money, which will be easier if they are meeting a client’s needs
and are getting paid for their work; as a result, it is critical for
them to make real-time decisions,” explained a finance leader. “It
is important to gather data quickly and timely to make decisions
faster; even data on prebills and amounts outstanding are essen-
tial for our month-end activities,” shared another.
THINK RELIABLE,
One participant disagreed. “To the extent that data can help a
client relationship, it is valuable, but it is all about the relation-
ship and quality of the work; data is ultimately not as important
as people would like to think that it is.”
Client advantages, notwithstanding, 90% of the respondents indi-
cated that data can help finance teams become trusted advisors
to firm partners and management. “You need to have reliable data
that you can report in a timely fashion to the attorneys and board;
without it, I don’t see how you can keep your job,” said one leader
candidly. “Data is our food and interpretation of that data is our
life; law firm finance professionals are information brokers,” added
another. “Data by itself cannot build trust; that happens when the

93% TIMELY DATA CAN HELP

LAW FIRMS TO GAIN A
COMPETITIVE EDGE.
finance team gets to a point where the firm can trust the data and
it is presented in an understandable way, in context,” suggested a
third.

40%
In addition to rapid, effective decision-making, “Understanding
your unit cost of delivering your service as well as external met-
rics, such as judicial analytics, can help client service and perfor-
mance,” remarked a participant. “If you can deliver legal services
LEVERAGE DATA BEYOND FINANCIAL METRICS
at a lower cost because you have excellent delivery systems and
TOENHANCE THEIR DECISIONMAKING
other mechanisms to compile data, you have a competitive advan-
tage,” noted a colleague. “I cannot tell you how many firms do not
understand their numbers or the true story of their operations due
to dirty, miscoded data, lacking write-offs, or failing to have good
financial hygiene; they also don’t know how they are making their
money and if they are not focusing their resources, they are losing
any potential advantage,” added a third.
EMPOWERING PROFITABILITY PAGE 16

Empowering profitability
When asked about analyzing profitability, 17% of the respondents
admitted that their firms do not measure it at all. “We do not
analyze profitability; the firm is immensely profitable,” said one
individual. “We don’t really do a good job of analyzing profitability
and don’t have a system for it; our managing and senior partners
prefer not to analyze profitability because determining it is
ambiguous and the results can be unreliable,” added another.
The remaining 83% measure it in some way, but their methods
varied. Some simply compare collections to overhead, others apply
a more complex formula to identify more granular levels of profit-
ability. 17% calculate it at the firm level, 23% do so at the attorney
level, and 33% determine profitability at the matter level.
“Profitability really is about evaluating whether we bring in more
than we spend on a clientspecific level; many firms have no idea
how profitable a client may be,” explained one participant. “We
usually present profitability by practice and location; some stories
do not change much and others do so we want to explain the
distinctions, especially since certain practices require significant
up-front investments,” said a peer.
For a number of finance leaders, profitability is a means of
diagnosing problems and developing appropriate solutions more
quickly. “If we see that an attorney is lagging in profitability, we
can drill down to the clients to determine the problems and
suggest ways to overcome them,” advised a finance professional.
“By assessing profitability at the client level, a firm can avoid the
issue of making profitability personal and negatively impacting
the culture at the firm,” added a peer.
Acknowledging the need to make this calculation independent of
any specific individual was common. “Our model is based on client
profitability, rather than attorney contributions; we determine
client and matter profitability and evaluate the profitability of the
attorney’s portfolio of business, rather than the individual attorney,
which is an important distinction,” another remarked.

AT WHAT LEVEL DO YOU DRILL DOWN TO WHEN IT COMES TO PROFITABILITY?

30%

20%

10%

13% 13% 17% 23% 33%

0%
N/A Client Level Firm Level Attorney Level Matter Level
EMPOWERING PROFITABILITY PAGE 17

Revenue is Vital to Improving Profitability

Although a majority of the respondents (53%) expect to increase
efficiency over the next five years to increase profitability, 83% are
focused on increasing revenue. In addition, 60% of the respond-
ents rated the value of increasing profit margins as a means of
increasing profitability as extremely important (five out of five) or
very important (four out of five).

“Making costs more efficient will naturally drive revenue because

if you can assign the right mix of people doing the work, you can
keep the same compensation and still increase revenue,” said one
participant. In fact, there were a number of comments about the
impact of proper resource allocation. This supports BigHand’s
Legal Pricing and Budgeting Report findings, where 22% of
respondents confirmed that failing to use the right resource to
complete phases and tasks is contributing to profit leakage at
their firm.

“Increasing revenues is the biggest lever, but [you need] to ensure

the optimal level of staffing so that you have the right number of
time keepers producing the projected amount of revenue,” noted
another. “Ultimately, increasing revenue faster than increasing
expenses is how you improve your margin,” summarized a third.
Regardless of how a firm staffs its matters or distributes the work,
the consensus was that increasing revenue trumps enhancing effi-
ciency, though finding an equilibrium in combining both would be
ideal. “If you don’t increase revenue, you will not drive profitabili-
ty,” said one. If you increase your profit margin, you are likely doing
so through reducing costs or increasing efficiency, but I prefer to
focus on increasing revenue,” offered another
FINANCE LEADERS ARE BECOMING CATALYSTS FOR INNOVATION
Finance leaders are becoming
catalysts for innovation
Consistent with their contributions to fueling growth and efficien-
cy at their law firms, about half of the respondents (47%) reported
spending between 10-20% of their time focusing on strategy and
innovation. In order to continue to drive directional change within
law firms, CFOs must spotlight how their efforts increase revenue,
find ways to build consensus among the firm’s decision-makers,
and carefully balance advocating for a position with the risk of
alienating any individual or group in the process.
Start with a reason for the change to which everyone in the
organization can relate. “It is about building consensus around
how areas for innovation have created a road block,” advised a
participant. “If you have 100 partners, you need to find 5-10 to
whom you can sell new ideas; find ways to enlist those partners
to sell your idea for you,” recommended another. “You need buy-in
from partners and to prove that you are bringing value to them
as a trusted business advisor with data that is helpful to their
decision-making,” noted a third.
It is also helpful to focus on the revenue-generating potential and
additional benefits associated with a given proposal. “If you can
show that a new idea will increase revenue and client engage-
ment, you are good to go; if you have data showing that the inno-
vation will be successful, it will be more persuasive, though if it is
just about buying new tools, it will not be persuasive,” explained
one respondent.
PAGE 18
“Finance professionals have to be able to show how the firm’s
leaders will benefit from any changes [economically] or in terms
of the quality of their lives,” said peer. “CFOs should be able to
simplify the benefits of new initiatives and clearly highlight the
returns onthem,” offered a third.
Clarity and practical results are critical components of any propos-
al. “Educating the leaders of the firm and being able to persuade
them about the ROI of an initiative” can be very persuasive,
according to one professional. “It is also helpful to show what
other firms are doing,” the individual added. Also, “Show how fast
you can recover the initial investment or how it will make you
more efficient,” commented a peer.
Despite the promise of leading change, several respondents cau-
tioned finance professionals seeking to promote new initiatives.
“Lawyers are challenging professionals to work with and are
resistant to change,” said one participant. “It requires patience and
persistence; if you really enjoy the environment, what you do, and
who you do it with, you need to wear your hard hat sometimes
[because] if you don’t have a thirst for that, you are in the wrong
seat,” added another.
EMPOWERING PROFITABILITY PAGE 19

WHAT IS THE MAIN DRIVER OF YOUR FIRM USING TECHNOLOGY?

0% 20% 40% 60%

BETTER CLIENT COLLABORATION 0%

ABILITY TO OFFER NEW SERVICES 0%
ALL THE ABOVE 10%

INCREASED TRANSPARENCY 10%

RISK AVOIDANCE AND MANAGEMENT 13%

INCREASED EFFICIENCY 63%

Efficiency Gains Are Fueling New Initiatives

When asked to identify the main drivers of their firms’ technology
usage, 63% of the respondents highlighted increased efficiency,
followed by 13% who selected risk avoidance and management.
“Efficiency drives everything else; if you are inefficient, it impacts
client service,” said one participant. “Efficiency is key because it
can help professionals create more time in their day; risk avoid-
ance would be the second most significant driver as we use a tool
as a result of our professional liability insurance that requires
details about engagements and advice given,” advised a colleague.
It is important to recognize that the drivers are dynamic, which
is why firms that remain nimble are most capable of adapting to
change. “Two years ago, it was about process efficiency, then it
was about client service, and now it is compliance and security.”
More than a quarter of the participants (27%) are exploring other
service delivery models as a tactic to increase profitability, such as
selling products vs selling hours. These include creating separate
entities, offering new formats for providing their services, and
holistically packaging their knowledge. “The firm has a new offer-
ing for startup businesses, which can pay a flat fee for a package
instead of an hourly rate,” said one leader. “We have an online
store where clients can purchase materials and schedule training,”
added another. “We have a practice group that is selling data
subscriptions,” noted a third. Others are delivering their services
through consulting divisions, educational initiatives, and alterna-
tive fee structures.
THE FUTURE
The future
As financial leaders look toward the future, the consensus was
to build on the current areas of opportunity. “We need to create
enough value for our clients so that they are willing to pay higher
rates,” explained one, who made a critical point as CFOs and their
teams are helping firms increase their competitiveness through
enhanced cash management and data deployment. “Focus on cre-
ative ways that law firms can bill their clients; alternative billing
is significant, but law firm finance leaders should help make sure
it is a profitable and effective arrangement,” noted a peer. “Law
firm financial leaders should focus on how to help firms compete
with alternative legal service providers (ALSP) by structuring
engagements to help them remain costcompetitive,” added a
colleague.
Another area of concentration is on building better finance teams
that support law firm growth. “Being open-minded about hiring
talent regardless of location [is essential],” said one participant.
“The pandemic has given firms the opportunity to incorporate
talent in remote locations; we are looking to reduce our total
amount of space,” noted a peer. “The focus will be the develop-
ment of the younger generation, strategic leadership, and the
ability to build cohesion among the partners on key decisions,”
added third.
Better and more accessible data is critical as we look ahead. “We
all know accounting, debits, credits, and financial statements, but
the critical element is to distribute data with technology; this is
one of the main reasons we moved to SurePoint because we can
now provide our lawyers with dashboards,” explained a respond-
ent. “Everything is data-driven and finance leaders should help
firms make good decisions based on data,” echoed another. “CFOs
need to start playing chess instead of checkers to make better
projections,” said a third.
PAGE 20
Take advantage of technology. “Focus on technology to do things
smarter not harder,” said one individual. “In the future, the tech
will be integrated with the data and there is also exposure if you
don’t have good software and good data, [so] the CFO needs both
traditional managerial and accounting skills, but also needs to
understand the technology,” commented another. “Finance leaders
should focus on improving the technology that their firm uses to
get information to the partners more quickly to help them make
decisions,” remarked a peer.
The challenge with adopting technology for some is the concern
about the potential loss of jobs. “I am concerned about how tech-
nology will replace roles at firms, and I am focused on identifying
where individuals can provide the greatest value,” a participant
admitted.
Ultimately, “You need to wear as many hats as possible to be a
trusted resource and offer insights on many topics; a good CFO
has to have the freedom and guts to give an honest opinion to the
firm’s leaders,” said one participant. “While the law and the prac-
tice will change, the role of the finance leaders is to support them
with the correct information; it has always been an essential role
of a CFO and will continue to do so,” added another.

About us
Ari Kaplan Advisors is a leading legal industry advisory company
that publishes benchmarking reports on legal technology trends,
delivers networking, public speaking, and business development
training for law firms and other providers of professional ser-
vices, and offers personal coaching and access to its proprietary
coaching software platform, Lawcountability. Company principal,
Ari Kaplan, is an inaugural Fastcase 50 honoree, a fellow of the
College of Law Practice Management, and a finalist for the Inter-
national Legal Technology Association’s Thought Leader of the
Year award. Learn more about Ari Kaplan Advisors at
https://www.AriKaplanAdvisors.com.
BigHand delivers success for the future by helping law firms
achieve professional productivity and profitability. The leading
software technology company has developed a range of solutions
that help busy people achieve more in less time and organizations
become more efficient and profitable.
BigHand has over 3,500 clients and 600,000 users worldwide,
supporting 68% of Am Law 200 firms. The leading technology pro-
vider actively listens and responds to client needs, demonstrated
in its outstanding customer satisfaction score of 98%.
BigHand Business Intelligence is an advanced financial BI
solution for law firms with role-based reporting that delivers
the right financial data to the right person in real-time intuitive
dashboards. The flexible data warehouse replaces manual
reporting with real-time data visibility from firm level to individ-
ual clients and matters. Self-service analytics provide controlled
access to relevant metrics in any visualization tool of choice. The
solution empowers users to improve cash flow and profitability
with immediate financial insight.
Visit www.bighand.com to learn more.
PAGE 21
BRYTER is the no-code automation platform that enables legal
and regulatory professionals to build digital applications. The
truly no-code platform gives enterprise teams the tools to build
self-service applications to provide faster, more accurate services
to their clients, without programming.
BRYTER is especially geared to professionals in law, compliance,
accounting and finance, who use the software to automate
complex, recurring decisions and workflows.
Global law firms like Paul Hastings and Reed Smith, and
professional service firms like Deloitte, PwC and KPMG, through to
in-house legal teams from companies like McDonalds, Telefonica
and Tech Data use BRYTER to deliver services digitally. BRYTER is
a remote-first company with offices in New York, Boston, London,
Paris, Frankfurt, Berlin and Dublin.
Visit www.bryter.com to learn more.
SurePoint® Technologies is a leading provider of financial and
practice management software to law firms nationwide. For more
than 40 years, law firms have relied on SurePoint’s tailored
enterprise software to drastically improve workflow and
maximize financial performance. With a community of nearly
50,000 members, SurePoint continues to transform the legal
industry by enabling law firms to unlock higher performance by
freeing lawyers of administrative burdens so they can spend far
more time focusing on their clients and their practice.
Visit www.surepoint.com to learn more.