Best Practice: Getting control of the financial side of your practice - Part II

Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC In my March 10 post, I discussed financial implications when law firm owners and partners do not have a working knowledge or a handle on the financial side of their practice and are held “hostage” by their bookkeepers. Here is an e-mail that I received from an attorney in Chicago that offers additional insight on this topic. “Regarding the heavy-handed bookkeeper, I read your column and it struck a nerve. I agree with your advice on this one but would add one point. If you are not happy with the person handling your firm's finances, make a change. Do it. You will be happier within 45 days and much happier within six months. If the problem is with the accountant taking control over the books and treating them as his or her personal fiefdom, then the members of the firm should sit down and determine whether the problem should be treated as an accounting problem or as an HR problem? From where I am sitting, it appeared to be the latter. If the problem is in fact an HR problem -- and this is especially true with the accounting function of a firm -- a firm should never hesitate to make a change in accountants. Doing so will be the only practical solution to what is a personnel problem, as opposed to an accounting problem. The integrity of the firm's financial statements, particularly where client's money might be involved, is far more important than the feelings of an individual who is reluctant to provide meaningful and timely financial statements.” John W. Olmstead, MBA, Ph.D, CMC, is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA General ListServ, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com