Most profitability problems begin as visibility problems.

As firms grow, complexity expands faster than visibility, and even well-run firms get surprised. Law Firm Economics closes that gap with a clear baseline, agreed expectations at every level, and one picture of where each unit stands.

Start with an honest baseline

Before looking forward, the firm needs a clear view of where it has been. Three questions frame every result:

Cash Collections

How much cash did we collect?

Operating Income

How profitably did we collect it?

WIP / AR

How much WIP and AR did we carry to get there?

The same three questions are answered at every level of the firm, from the top down.

Firm
Office
Practice
Timekeeper

From baseline to agreed expectations

History shows where the firm has been. Expectations set where it's headed. Setting them well takes both the firm's own data and leadership's judgment.

The algorithm

A rolling cash collections forecast built from the firm's own history. As new data comes in, the baseline updates to reflect the best information available.

Management overlay

Leadership adjusts that starting point for what history can't know: new partners, departures, practice changes, rate changes, and strategic investments.

Agreed expectations

Not targets handed down from Finance, but ones every level of the firm helped shape. Because the people accountable for the results had a voice in setting them, they own what the chart shows.

Emotion out. Clarity in.

When every attorney, practice, and office has a clearly marked target and knows what it takes to hit it, firm-level goals become the sum of individual commitments. Each target stays visible all year, not just at review time.

Reading the Business Trinity Chart

The Business Trinity Chart brings a unit's essential numbers into a single shape. Here's how to read it, one step at a time.

The expectations triangle

The navy equilateral triangle is the plan: the balance a business unit is expected to hold between cash collections, operating income, and the WIP and AR it carries. It's the fixed reference point everything else is measured against.

2 Aligned

Performance in alignment

The shape with the green outline is actual performance, shaded blue when the unit is on plan. When results match expectations, the two triangles line up as one balanced shape, and leadership knows the unit is on plan without reading a single number.

3 Review

Performance in deviation

When results fall below plan, the shape pulls away from the triangle and shades orange. Here, cash collections fall short. Work is still getting done but isn't converting to cash on schedule, so WIP and AR build up.

4 Exceeds

Performance above plan

When a unit runs ahead of plan, the shape extends past the triangle and shades green. Here, cash collections and operating income both run ahead of expectations while WIP and AR stay lean. Results above plan are worth understanding too, so what's working can be recognized and repeated.

Next: The Application

See where your firm stands.

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