Negative Cashflow Pro Bono No-No
It rhymes AND it makes good sense! LOL!
Note: Happy Labor Day weekend! I am taking a pause from the series on how to work with your first attorney client this week. That series will resume next week!
You’ve heard the term pro bono before and you know what it means... You’re workin’ for FREE!
Actually, a Google search returns this definition:
“denoting work undertaken without charge, especially legal work for a client with a low income.”
...which I must say, speaks more highly of the true importance behind the activity. In Latin, pro bono publico means ‘for the public good’. THIS I love because these definitions take us back to the day when there weren’t so many complexities around providing a service out of the kindness of our hearts. Nowadays, there is an added quest to working pro bono and that may come from the many bar associations who require or make membership policy around pro bono work.
It’s neat that they do this when you really think about the impact this has on low-income households. However, this kind of policy BEGS a question of your Law Firm Accounting practice. Attorney’s in law practices large or small should be asking:
How’s my CASHFLOW?
AND PRIOR to taking on pro bono work! This is because the effort extended to provide these services can still result in expense to the Law Firm/Attorney. Consider how taking on pro bono work might affect you in terms of being stretched too thin? Work overload without an increased income. The Impact of Pro Bono Work on Law Firm Economics by Jack W. Londen explains well, the conundrum around capacity, attractive billing matters, and things that happen in the interim.
To be clear, I’m not saying that pro bono work shouldn’t be done. I can honestly tell you, as an accountant who has partnered in a Facebook group QB Community Live! where we mentor other accountants, I get it! It is so satisfying helping others. Thats why I do it.
But what I am saying that you’ll want to seek help from your accountant so you can get a sense of timing for taking on that type of work. Law Firms do especially well when they can time their pro bono activities with their peak positive cashflow period. It’s the best way for attorneys to give back to their community while looking shiny with their bar associations AND… (icing on the cake) feel financially stable in the process.Questions about Cashflow or other Law Firm Accounting solutions? Contact Us