Law Update: Well-managed firms pull ahead
Friday 18 June 1993
'The results validate the concerns Coopers & Lybrand was expressing after last year's survey,' says Brian Woods Scawen, the corporate finance partner at Coopers leading the survey. 'Namely, that those firms that do not acknowledge the chain reaction of good financial management, increased profitability and capacity to invest will be left in the traps, while those that do will be on course to succeed in the difficult new market conditions.'
The differential in financial performance will become self- fulfilling, says the survey. 'The firms with good financial management will provide the core information to formulate the vision into plans and to identify the priorities for investment and the level of investment that will generate best returns. The poorer performers will continue to spiral downwards unless they take urgent action to improve.'
Standards of financial performance are largely independent of size. Instead, success is determined by a firm's ability to understand its markets, develop an appropriate strategy and implement the required actions. Control over staff and property costs is an important factor, however. The best performing firms in the survey operate on a ratio of qualified staff to partner of three to one or better, and on a support staff ratio of at least one secretary to two fee earners. One quarter of firms have less than 250 square feet per fee earner, while at the other extreme, 27 per cent of firms have more than 350 square feet per earner.
Firms exceeding cost benchmarks of 40 per cent of fees for staff costs and 10 per cent of fees for property costs are likely to earn below standard profits, the survey says. More than 70 per cent of the firms surveyed expected increased profits in the next year and 47 per cent expected to employ more staff.
Cooper believes that the optimism is largely misplaced. 'A sizeable proportion of the firms are likely to have their prospects dashed by their own poor financial management,' says Mr Woods Scawen. 'They will lag behind. Urgent action is needed now by the poor performers if they are to catch up and compete.'
- 1 Pope Francis issues top 10 tips for happiness
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Now diplomacy has failed, boycotting Israel might be the only way we can protect the people of Gaza
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness
Justin Bieber posts Instagram photo of a crying Orlando Bloom after Ibiza fight 'over Miranda Kerr'
Disney heiress Abigail disowns her share of family profits in West Bank company
Air Algerie AH5017 crash: Jet fell 30,000 feet in three minutes ‘due to violent storm’
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
Excellent Salary: Austen Lloyd: KENT MARKET TOWN - An exciting new role has ar...
£180 - £250 per day + competitive: Orgtel: Financial Accountants - Key Banking...
£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...
£18000 - £25000 per annum + Commission: SThree: Computer Futures are currently...