Session 2: Financial Management — Interpreting Financial Data & Decision-Making

Do the complexities of financial information and analysis keep you up at night? This interactive online program focuses on budgeting, financial reporting, cash flow analysis, model building, and variance analysis within a law firm.

You will apply the skills gained in the course by interpreting financial statements, calculating and analyzing financial ratios, conducting profit analyses, and comparing financial performance across fiscal years. Instructional methods include case studies, lectures, videos, readings, and assessments.

This session covers essential topics such as automated financial management systems, alternative fee arrangements, financial controls, client matter budgeting, and electronic billing.

In this second session of Financial Management: Law Firm Accounting, you will begin to decode the "Financial Story" and how to use the numbers to guide leadership decisions.

The following is an outline of the topics.

Week 1: The Financial Story

As a Law Firm leader, you must develop two essential skills: reading and effectively communicating financial data effectively. 

By the end of this class, you will be able to:

• Identify financial statements and the stories they tell.
• Communicate financial information to non-financial team members.
• Differentiate between the financial information partners need to know vs. what other staff members require.

Week 2: Managing the Firm Through KPIs

Key Performance Indicators (KPIs) provide measurable insights into a firm’s financial health and operational success.

By the end of this class, you will be able to:

• Explain what KPIs are.
• Create a framework for developing the right KPIs.

Week 3: Forecasting and Planning

Gaining insight into financial data allows firms to look ahead and make informed decisions.

By the end of this class, you will be able to:

• Use the numbers to look forward.
• Model the behavior that impacts results.
• Create a baseline budget.

Week 4: Staffing, Compensation, and Capacity Planning

Compensation, productivity, and capacity planning are essential for a law firm’s long-term growth.

By the end of this class, you will be able to:

• Describe staff and partner compensation plans, including bonus plans and options.
• Measure staff productivity and performance.
• Compute employee ROI calculations.
• Implement capacity planning strategies.

Week 5: Trade-offs and Tough Choices

Sometimes you have to make hard decisions. You can use financial data to provide objective insights when making difficult business decisions.

By the end of this class, you will be able to:

• Identify financial factors in key business decisions
• Gather and analyze relevant financial data
• Apply data and your financial knowledge from this course to identify ways to identify and address financial concerns

Week 6: Tracking and Reporting

Accurate financial tracking and reporting ensure data integrity and informed decision-making.

By the end of this class, you will be able to:

• Identify the roles and responsibilities for financial data integrity.
• Explain best practices for data review.
• Utilize practice management software for tracking financial performance.
• Identify tools for financial reporting and analysis.

Additional Information:

The live lessons will be held on Tuesdays from 1:30-2:30 p.m. Central Time. These lessons will also be recorded for on-demand access.

This course is offered at a cost of $549 for ALA members and $679 for nonmembers, and is available at a discounted rate as a part of a package.

Audience Level

Intermediate

Course Textbook

A textbook is NOT required for this course. All reading materials will be provided.

Cancellation Policy

All cancellations must be made in writing and submitted via email to elearning@alanet.org. The following cancellation fee scales will apply:

• After registration but prior to 50% penalty date: $125 fee
• Four weeks before start of the course: 50% of fee paid
• Two weeks before the start of the course and thereafter: No refund 

Completing both FM 1 and FM 2 courses gives you access to the Legal Management Finance Specialist Certificate Program. 

CLM Credits

Meet minimum course requirements and earn 6 hours of CLM credit. This can take the following forms.

• CLM Application Credit: Organizational Development
• CLM Functional Specialist Credit: Financial Management
• CLM Recertification: Financial Management

Course Requirements

Each course has a start and end date. To receive the course completion certificate and CLM credits, all weekly assignments must be completed and quizzes passed with a score of 70% or higher by the last day of the course.

Course Summary and Learning Objectives

Session 1: Financial Management — Law Firm Accounting

Expand your knowledge of the basic functions of accounting and financial management in this facilitated online program. This course will help you gain an objective approach in addressing financial challenges in Law Firms. Through case studies, lectures, videos, readings, and assessments, you will evaluate resources in relation to your professional experience and apply effective financial decision-making skills.

In this first session, you will gain a deeper understanding of Law Firm finance and develop a blueprint for effective financial management.

Week 1: Law Firm Accounting and Finance — Roles and Responsibilities

Managing a Law Firm’s financial operations requires a clear grasp of key roles and responsibilities. Many legal administrators feel overwhelmed because they take on financial responsibilities without fully knowing what they entail.

By the end of this class, you will be able to:

• Identify key roles in Law Firm Accounting and Finance.
• Distinguish the responsibilities associated with each role.
• Apply best practices for each function.
• Develop a plan to manage financial responsibilities as your practice grows.

Week 2: Financial Statements

When it comes to accounting and finance, the financial statements are basically the primary output of all the work performed. Think of them as the ultimate "book report", summarizing everything that has happened in the business. However, it does take some skill to comprehend what the summary is trying to communicate. 

By the end of this class, you will be able to:

• Describe your practice’s accounting system.
• Identify key financial statements.
• Recognize the essential financial reports that require your attention.

Week 3: The Compliance Blueprint — Trust Accounting and Compliance

Ensuring compliance with state bar regulations, payroll requirements, and tax laws is a critical function of law firm accounting.

By the end of this class, you will be able to:

• Explain Trust Accounting and its related state bar regulations.
• Ensure compliance in Payroll Accounting.
• Ensure compliance in Taxation and Filings.

Week 4: Security Policies and Procedures

The accounting and finance team ensures that there are rules in place to properly safeguard the financial resources of the firm. 

By the end of this class, you will be able to:

• Implement cash controls.
• Conduct vendor reviews and approvals.
• Perform client/customer reviews and approvals.

Week 5: Pricing and Billing

Proper pricing and billing practices impact a law firm’s profitability and operational efficiency.

By the end of this class, you will be able to:

• Describe law firm pricing strategies.
• Implement billing best practices, including electronic billing.
• Outline collection procedures.

Week 6: Introduction to Advanced Reporting

Interpreting financial reports and effectively communicating results are essential skills for firm leadership.

By the end of this class, you will be able to:

• Analyze the relationship between cash flow and cash timing.
• Define law firm productivity metrics.
• Communicate financial results to leadership.

Additional Information

The live lessons will be held on Tuesdays from 1:30–2:30 p.m. Central Time. These lessons will also be recorded for on-demand access.

The course is offered at $549 for ALA members and $679 for nonmembers, and is available at a discounted rate as a part of a package.

Audience Level

Basic-Intermediate

Course Textbook

A textbook is NOT required for this course. All reading materials will be provided.

Cancellation Policy

All cancellations must be made in writing and submitted via email to elearning@alanet.org. The following cancellation fee scales will apply:

• After registration but prior to 50% penalty date: $125 fee
• Four weeks before start of the course: 50% of fee paid
• Two weeks before the start of the course and thereafter: No refund

Completing both FM 1 and FM 2 courses gives you access to the Legal Management Finance Specialist Certificate Program.

CLM Credits

Meet minimum course requirements and earn 6 hours of CLM credit. This can take the following forms.

• CLM Application Credit: Organizational Development
• CLM Functional Specialist Credit: Financial Management
• CLM Recertification: Financial Management

Course Requirements

Each course has a start and end date. To receive the course completion certificate and CLM credits, all weekly assignments must be completed and quizzes passed with a score of 70% or higher by the last day of the course.

Completing the FM 1 and FM 2 courses and passing the certificate exam will help you deepen your knowledge about law firm finances, ensure your achievement of the learning objectives, and give you a credential that sets you apart. Learn more about the Legal Management Specialist Certificates here.

Instructions

• Pass this exam with a 70% or higher in order to receive the Legal Management FM Specialist Certificate. 
• While you are not timed, the exam must be completed in a single sitting. If your computer times out from inactivity, your responses will not be saved. 
• Correct answers will not be shared afterward. You will only be able to view your score. 
• If you do not pass the exam, a page will display with directions describing how to retake the exam. Since the exam can only be retaken once, please take time to review the materials from both FM courses as the questions on this exam are only based on items covered in those courses.