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By Murray Gottheil | November 22, 2023
This is the fifth in a series about questions articling students and new associates should consider when sizing up their new firm.
This time, I will address the senior person in charge of the money, who could have any of the following titles: chief financial officer (CFO), controller, accounting manager, accountant or bookkeeper.
Unless your firm is very large, this individual will probably not be called a CFO, but to keep things simple, I will call whomever you have counting the beans, the CFO.
So, here are questions for you to think about:
- Is your CFO a certified public accountant, a glorified accounting clerk, or something in-between?;
- Does your CFO have the authority to run the firm’s finances, or do they simply attend to data entry and generating basic reports and bills, accounts receivable and accounts payable?;
- Do any staff members report to your CFO, or does the firm expect the CFO to perform both low-level and high-level functions (which means that they only have time for low-level stuff);
- Who is responsible for high-level functions such as budgeting and budget management, creating non-standard reports, and strategic financial planning? (If it is a lawyer, laugh loudly and start planning your departure: the firm is not going anywhere good fast);
- Is your CFO sophisticated enough to negotiate with the firm’s lenders and do the partners let them do that?;
- Do the partners listen to the CFO’s recommendations (or at a minimum, consider their input without dismissing it because “They are not a lawyer and do not understand”) on matters such as financial reporting, financial incentives to associates and staff, collection policies, retainer polices, draw policies, capital expenditures, and the timing of partner distributions?;
- Is the CFO fully conversant with Law Society policies, including those relating to trust accounts?;
- When the rules create a roadblock to getting a deal closed, will the CFO agree that the firm will take a well-justified risk to solve the issue, or does the CFO just keep repeating, “It is against firm policy” until the lawyer wants to quit on the spot and become an optometrist?; and
- When your CFO says “no”, do the lawyers feel free to go over their head to the managing partner, and if they do, does the managing partner have the CFO’s back?
If the CFO does not impress you much, working in that firm may be fine unless you want to be part of a team that is going somewhere.
If they do impress you, the firm may still not be for you. There are many more folks to meet at your firm before you can really tell whether you will ever be happy, healthy, and wealthy if you stay there.
Next time: The Law Clerks
Murray is a happily retired lawyer who lives in the country, drives a pick-up truck, writes, teaches and mentors. You can reach him at [email protected] or see what he is up to at lawanddisorderinc.com.