KEEPING YOUR LAW FIRM GOING DURING THE CORONAVIRUS CRISIS (3): CASH FLOW
In the third in this series we look at the help and guidance in relation to cashflow. This is a important topic for every law firm and chambers. It is also a subject on which some lawyers may have to advise their clients.
SPECIFIC GUIDANCE FOR LAW FIRMS
The Law Society Gazette’s article ‘Cash focus is needed to navigate coronavirus pandemic’ explains that “focus on cash management should be top of the agenda for partner meetings to ensure agile decision making”.
PKF Francis Clark state that ‘cash not profit is key’ in their guidance article ‘Helping law firms survive COVID-19’.
In ”There’s no coronavirus playbook’: Relief at emergency measures but law firm leaders predict worst is yet to come’, an article on Legal Business, the role of law firms over the next few months is said to include ‘getting existing debtors to pay up outstanding cash before companies really have their backs against the wall’. However, John Joyce, managing partner of Addleshaw Goddard, explains that this has to be balanced with long-standing client relationships.
Saffery Champness’ article ‘Cash flow forecasting for law firms during COVID-19’ explains how firms can maximise cash coming in and minimise cash going out.
The Law Society answers the question ‘Our firm is likely to be in financial distress in the next few weeks due to cash flow. What support is available?’ here.
The Financial Times’ article ‘Corporate lawyers in high demand as coronavirus hits businesses’ explains that because the average business has not added pandemics into their force majeure clauses, corporate teams are experiencing increases in calls and client queries.
Reuters also highlights in ‘Bankers and lawyers prepare for spate of company rescues as coronavirus bites’ that an increase in restructuring deals is expected, lawyers are inundated with requests from cash-starved firms and lawyers are being pulled in from other functions to help.
GUIDANCE FOR PROFESSIONAL FIRMS GENERALLY
Cognitive Law has put together guidance on ‘How to maintain cash flow during these unprecedented times’.
BDO has several articles on managing cash flow within the current economic environment – ‘Early Loss Carry Back Claims‘, ‘Research and Development Tax Reliefs and COVID-19‘ and ‘Enhancing cash flow through Capital Allowances‘.
Small Business gives ‘6 tips for cash flow management during the coronavirus crisis’.
Deloitte has a guide ‘Managing cash flow during a period of crisis’ which looks at how companies can respond to the immediate challenge.
The Financial Times article ‘UK accountancy and law firms prepare to withhold partner payouts’ states that client fees are dropping off during the crisis and firms are considering measures to conserve cash.