Why the finance job is different
- Partners draw rather than being paid. Drawings, tax reserves and capital accounts mean the profit figure and the cash position tell two different stories, and the people you are reporting to are also the owners.
- Work in progress and lock-up dominate. Cash is tied up in work that is done, unbilled and unpaid, and the length of that cycle matters more to the firm's health than the revenue line does.
- Recoverability is the real margin. Time recorded is not time billed, and time billed is not time paid. A firm that measures utilisation without measuring recovery is flying on one instrument.
- Client money is regulated. Client account rules are their own discipline with their own consequences, and this is not somewhere to learn on the job.
What to ask a candidate
The answers separate somebody who has worked in a firm from somebody who has read about one very quickly, and the difference is a full quarter of ramp.
- How would you shorten our lock-up, and which part would you attack first?
- How do you report to partners who are also the owners, and how do you handle the ones who disagree?
- Walk me through how you would assess recoverability by team and by matter type.
- What is your experience of client account rules and who handled compliance in your last firm?
It is not only finance
Operations and marketing are also different here. A fractional COO in a law firm is usually working on matter workflow, resourcing and the gap between what partners want and what the firm can deliver, rather than on the process work that phrase implies elsewhere.
Marketing is constrained by professional conduct rules on how services may be promoted, so a fractional CMO who has only worked in unregulated sectors will need supervision they may not expect.
The governance point
Whatever the structure, partnership, LLP or incorporated, the people being reported to are the owners, and several of them will disagree with each other. Much of the value in the seat is the ability to bring a number to that room and hold it, which is a political skill as much as a financial one.
It is worth asking a candidate directly how they handled a partner who did not want to hear what the numbers said, because it happens and the answer is revealing.
What this is not
This is a guide to hiring, not regulatory advice. Client account rules, professional conduct obligations and the requirements that attach to your structure come from your regulator, and anything you act on should be checked with them or with somebody qualified to advise on them.
Questions
- What does a fractional CFO do in a law firm?
- The same seat with different mechanics: partner drawings and capital rather than payroll, lock-up and work in progress rather than a simple receivables cycle, and recoverability as the margin measure. Most of the early value is in shortening lock-up and making recovery visible by team and matter type.
- Does a law firm finance lead need law firm experience?
- It matters more here than in most sectors. Partner economics, lock-up and client account rules are not intuitive from outside, and somebody learning them on your time costs roughly a quarter before they are useful.
- Can a small firm justify a fractional CFO?
- Frequently yes, at a small number of days. Lock-up and recoverability are where the money is, and both are measurable and fixable without anybody being present full-time. One day a week to start and a day a month afterwards is a common shape.