I appreciate most solicitors will have originally entered the legal profession for reasons other than getting rich, but the fact remains that once you make partnership, you inevitably want to earn substantially more from the sale of your slice of the equity than you paid for it. You therefore have a vested interest in not only ensuring your practice survives but thrives and grows in value. But how do you measure this?

If you have an old-style accounts system (whether manual or computerised), you will be aware they can generate reams of paper at the end of a month containing, what is to most lawyers, completely incomprehensible facts and figures. This is hardly surprising as these systems were designed to balance the books and ensure no client monies strayed into the office account - but the net result is firms are left, as the IT industry adage puts it, 'data rich but information poor'.


Charles Christian: real-time reporting helps partners manage firms better

If you are lucky, you have a practice manager who can convert this data into meaningful reports, though you will probably be shocked to realise just how long this can take - even using spreadsheets, it is not unusual to find that preparing end-of-month reports for partners in a larger high street firm can take up to four days. And these reports will still suffer the disadvantage of being based on historical data. In other words, it is only today you learn that your firm ran into financial problems at the beginning of September.

This is no good. If you are serious about running your firm as a commercial enterprise, you must have access to up-to-the-minute information on key performance indicators (KPIs) such as profitability, unbilled work in progress, billing targets and costs. For example, if you do not know how long it takes (as distinct from what you think it ought to take) your conveyancers to handle a sale, how do you know if you are making an acceptable profit margin on your fixed-fee conveyancing? Far too many firms are still in the dark and do not realise that though total fee income may be up, they are saddled with unprofitable practice areas, costly offices and unproductive fee-earners.


By comparison, all modern practice management systems now offer some form of real-time KPI reporting facility that can put selected information automatically in front of managers, partners and department heads first thing in the morning - or even more frequently. It may not sound the most exciting use of an IT budget, but if it gives you the tools to manage your practice in a proactive fashion, it could be the difference between being in a firm with a future and one that is going nowhere.


Charles Christian is an independent adviser to the Law Society's Software Solutions guide