People I Met Practicing Law

Law Firm Primer For Articling Students and New Associates – Part Five: The Chief Financial Officer

This is the fifth in a series about questions that Articling Students and new Associates should consider when trying to size up their new firm.

This time I will address the most senior person in charge of the money. In your firm, this person could be called any of the following:  Chief Financial Officer (“CFO”), Controller, Accounting Manager, Accountant or Bookkeeper.

Unless your firm is very large, this person will probably not be called a CFO, but to keep things simple, in this article I will call whoever you have counting the beans the CFO.

So, here are questions for you to think about:

  1. Is your CFO a Certified Public Accountant, a glorified accounting clerk, or something in-between?
  2. Does your CFO have the authority to run the finances of the firm, or do they simply attend to data entry and generating basic reports and bills, accounts receivable and accounts payable?
  3. Are there staff members reporting to your CFO, or is the CFO expected to do both the low-level and the high-level functions (which means that they only have time for the low-level stuff.)
  4. Who is responsible for the high-level functions, such as budgeting, creating non-standard reports, managing the firm to a budget, and strategic financial planning? (If it is a lawyer, laugh loudly and start planning your departure. The firm is not going anywhere good fast.)
  5. Is your CFO sophisticated enough to negotiate with the firm’s lenders and do the Partners let them do that?
  6. 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 distributions to partners?
  7. Is the CFO fully conversant with the Law Society’s policies, including the policies about trust accounts?
  8. 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?
  9. 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

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