A Successful Firm, an Owner Footing the Bill
On paper, Provident Law was doing fine. The Phoenix-based firm, built on strong convictions about justice and client care, had a solid practice and a loyal client base. But managing partner Christopher Charles knew something wasn’t right underneath the surface: he was personally subsidizing part of the firm’s overhead out of his own pocket, quietly reducing his own take-home pay to keep the business running smoothly. He didn’t have a clear picture of the firm’s true breakeven point, didn’t know exactly how many attorneys the practice needed at current fee levels to cover its costs, and was struggling to get the accounting system to give him answers instead of more questions.
“John Waters has been key to helping my firm understand its revenue and helped us create a strategic plan for sustaining and growing our business. He tries hard to understand our business and it is obvious that he truly cares about our success,” said Christopher Charles, Managing Partner of Provident Law.
Finding the Real Numbers Behind the Practice
Waters Business Consulting Group started where every strong financial strategy has to start: with the historical numbers. WBCG dissected Provident Law’s true overhead costs and analyzed past financial trends to understand where the business had been and where it was actually heading. From there, the work turned to identifying exactly how much revenue needed to come in each month — in the form of partner contributions — to meet overhead obligations, since the firm’s profit margin left little room for error.
That analysis led to the central deliverable of the engagement: an accurate breakeven calculation, along with a simple way for Christopher to recalculate it himself as the business grew or changed. WBCG also helped identify the type of internal bookkeeping support the firm needed and forecasted where the practice was likely to grow across 2019, 2020, and 2021. None of this happened in a single meeting — WBCG met with Christopher two to three times a month to review financial performance and help him prepare a clear “state of the law firm” update he could share with his partners.
Turning Numbers Into a Conversation Partners Could Understand
Perhaps the most delicate part of the engagement wasn’t the math — it was the conversation that math made possible. Christopher had been quietly covering a gap in the firm’s operating funds, and he needed a way to explain to his partners why shared overhead fees needed to increase. With WBCG’s help, he was able to present the numbers clearly enough that the partnership could understand not just what needed to change, but why.
Clarity Where There Was Once Guesswork
By the end of the engagement, Christopher had a fundamentally different relationship with his firm’s finances. He understood what it took to meet and exceed Provident Law’s monthly obligations, and he had a clear rationale for bringing on additional attorneys to support that goal. The firm transitioned to a higher-quality accounting system, and Christopher gained visibility into billable hours and rates relative to attorney headcount, the maximum volume of matters the firm could realistically manage, and the average case size needed to hit growth targets. He could now track, week to week and month to month, how many matters opened, how many billable hours were logged, and how much was actually collected — the operational heartbeat of the firm, finally visible.
Not Sure What Your Breakeven Number Actually Is?
Many successful business owners are, in effect, subsidizing their own companies without realizing it. If you don’t have a clear, current answer to “what does my business need to bring in this month to break even,” that’s exactly the kind of clarity Waters Business Consulting Group can help you build.
Contact Waters Business Consulting Group to schedule a free consultation.
