Building a Financially Resilient Law Firm: Insights from Tom Blandford

In episode 21 of the Empowering Law Firm Leaders podcast, Tom Blandford discusses how to build a financially resilient law firm. He shares the essential characteristics of a successful firm, steps to building long-term resilience, and insights from The Law Society’s Financial Benchmarking Survey.

Tom Blandford, owner of Sursum Advisory and legal financial expert, shares his expertise on understanding financial data, managing cash flow, and preparing for future challenges.

In this conversation we cover:

• Understanding your firm’s financial data
• The importance of improving lockup
• Adhering to regulatory requirements
• Strategies for financial growth
• Improving cash flow

Essential characteristics of financially resilient law firms

Understanding financial data: Tom emphasises the importance of understanding the financial data within your firm. He suggests focusing on a couple of key numbers that are relevant to your firm and tracking them over time to identify trends. “Just pick one or two numbers. Let’s just focus on those, and build from there,” he advises.

Managing lockup: Lockup, which combines work in progress (WIP) and debtors, is a crucial metric for maintaining healthy cashflow. Tom explains, “Lockup is the idea that at any given moment you have an amount of work in progress and an amount of invoices that have not yet turned into cash… Knowing what that number is, and why that number is what it is, and what you can do about that number, and how that number has changed is really, really important for firms,” Tom advises.

Adhering to regulatory requirements: Compliance with regulatory requirements, such as the Solicitors’ Accounts Rules, is essential. Tom highlights the importance of keeping client accounts clean and reconciled. “Make sure your client accounts are relatively clean. Are they reconciled? Are you sat on loads of residual balances? What is going on there?” he asks. Staying ahead of potential regulatory changes can help firms maintain financial stability.

Strategies for financial growth

When it comes to financial growth, Tom recommends focusing on both organic growth and operational efficiency. According to the Law Society’s Financial Benchmarking Survey 2025, 71% of firms reported year-on-year fee growth in 2024, with a third of firms seeing growth of over 10%. However, the fee earner break-even point has risen due to increased overhead costs, with the cost of a fee earner rising by 6.1% to £67,476. This highlights the need for strategic approaches to growth.

Tom points out that simply hiring more lawyers is not always the solution. “It’s about making sure that they have the right tools around them, that they have the right admin support around them, that their technology supports them correctly,” he explains.

Tom emphasises the importance of using existing resources efficiently. “Take all of your existing people, all of your existing tools, all of the existing things that you’ve got in the firm and just find a way to squeeze another couple of percent out of them,” he advises. By improving efficiency, firms can increase profitability without necessarily increasing headcount.

Increasing fee earner profitability

To address the decline in productivity and increase the profitability of fee earners, law firm leaders need to focus on several key areas. The Financial Benchmarking Survey 2025 revealed that the average chargeable hours per fee earner were only 773, significantly below the target of 1,100 hours. This indicates a substantial amount of non-chargeable time that needs to be addressed.

Tom emphasises the importance of acknowledging and incorporating essential non-chargeable activities such as Continuing Professional Development (CPD), team meetings, and business development. “CPD is important, team meetings… culture and cohesion are important, business development is important. So make sure you’re sort of understanding those numbers and you’re adding them in,” he advises. Even with these activities accounted for, there remains a significant gap in chargeable hours.

One major issue Tom identifies is inefficiency within firms. “[There’s] so much time that isn’t sort of contributing to the matter, and just isn’t billable,” he notes. To combat this, firms need to streamline their processes and workflows to ensure that fee earners can maximise their chargeable time. This includes reviewing templates, workflows, and operational procedures to identify and eliminate bottlenecks.

Another critical factor is what Tom refers to as “moral editing,” where fee earners underreport their time because they feel certain tasks should not be charged to the client. “There is a really important distinction that people need to have in their heads between matter-related time versus billable time, and they are two completely different things,” he explains. Fee earners should accurately report all matter-related time, even if they believe it took longer than it should have. This transparency allows the firm to identify areas for improvement and ensure that all time spent is accounted for.

Tom suggests that leaders should encourage fee earners to report their actual time spent on tasks, regardless of whether they think it should be billable. “If you have put down two hours, and it should have been one, that is my fault, as the managing partner of the firm, because that means I have got something wrong in our processes, in our templates, in our workflows,” he states. By addressing these inefficiencies, firms can work towards reducing the time it takes to complete tasks and ultimately increase chargeable hours.

The importance of forward-looking metrics

While tracking historical financial data is important, Tom also advocates for incorporating forward-looking metrics. “You need something that’s also a little bit forward looking. So how many matters did I open today which will work their way through their system? You know a matter that I open today is an invoice six weeks from now, and it’s cash three or four weeks from now. So if I’ve opened it today, it’s cash 10 weeks. So, knowing that is helpful because it helps me project forward.” he suggests. By monitoring these metrics, firms can anticipate future financial performance and make proactive adjustments.

Tom recommends implementing a 13-week rolling cash flow forecast. “A 13-week rolling cash flow is a very, very useful tool,” he says. This approach allows firms to identify potential issues well in advance and take corrective action.

The fundamentals for a financially robust future

Building a financially resilient law firm requires a combination of understanding key financial metrics, managing cash flow effectively, and preparing for future challenges. By focusing on these areas, law firms can navigate the complexities of the modern legal landscape and achieve long-term success. Tom’s insights, supported by the findings of The Law Society’s Financial Benchmarking Survey, provide a valuable roadmap for firms looking to strengthen their financial foundations and thrive in an ever-changing environment.

Watch the full interview with Tom Blandford now to discover more advice and guidance on building a financially resilient law firm. You’ll also hear Tom’s exclusive advice on the questions leaders should be asking of the FD or CFO.