Making it easier to grow your law firm

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This section covers succession, specialisation, mergers, selling a law firm, becoming a partner, and business structure

How to set up your firm’s systems to provide the information that enables you to improve profitability and cashflow

How to avoid professional negligence claims, with examples of common problems and suggested solutions. Plus FAQs on PII

This is a new section and only covers SRA Accounts Rules and GDPR at the moment. More articles will follow

How to protect your law firm from cyber attacks. What steps to take if your systems are hacked

How to recruit and retain a team that is both happy and highly effective, dealing with the HR issues along the way

In marketing, like anything, you need to get the basics right. Otherwise the time and money you invest in marketing will be wasted

How to win new clients, make the most of existing relationships, encourage referrals and generate new leads

How to approach creating a law firm website that works, from agreeing your objectives to making sure you get the results you want

Why lawyers need to know about social media, how to make the most of the opportunities and how to avoid potential pitfalls

How to use PR to build your firm’s reputation; and how to create cost-effective advertising – traditional and online – that delivers results

Law firm financing options

Andy Poole

Andy Poole, partner in accountants Armstrong Watson, lists the types of finance available to law firms. (Updated 20 October 2020)


Overdraft/flexible line of credit. Flexible way to manage day-to-day cashflow shortfalls, though not the best way to finance longer-term borrowing requirements.

Fixed term loan. Secured or unsecured borrowing over an agreed term, often up to ten years. Typically used as core financing for growing the firm or a specific purpose (eg buying out a partner’s equity, investing in new technologies or funding premises refurbishment).

Factoring/invoice discounting. Allows the firm to borrow against outstanding invoices – typically where payment is due within one or two months. A good tool for funding a growing case load, but law firms can find this kind of financing difficult to arrange.

Asset finance. Hire purchase and leasing arrangements to spread the cost of vehicles and equipment (such as computer systems). Typically covers up to 80% of asset cost.

Commercial mortgage. Long-term financing secured against the firm’s premises – either for premises acquisition or to release capital tied up in an existing property.

Soft loans/grants. Provided on favourable terms by funders interested in supporting your business. Limited availability, but some funding may be available – for example, local authority or Local Enterprise Partnership loans that encourage local employment growth.

Specialist loans. A variety of types of financing for particular purposes, such as short-term tax and VAT loans (to finance tax bills) and litigation or disbursement financing (often on a non-recourse basis). Typically provided by specialist lenders with legal sector expertise.

Partner funding. Partners can use existing savings (or personal borrowing) to finance the firm. Often the most realistic way of financing a small start-up practice.

Equity investment. Capital from third party investors such as business angels or strategic partners, who take a stake in the firm as either passive or active investors.

Bounce Back Loan Scheme. Self-certified business loans for businesses affected by the Coronavirus pandemic. Available through the mainstream banks, with amounts of up to £50,000. The government provide the lender with a 100% guarantee for the loan amount, should the business not be able to repay. Closing date for applications is 30 November 2020.

Coronavirus Business Interruption Loan Scheme. Similar to the Bounce Back Loan Scheme, albeit up to a £5m cap and available from a wider variety of lenders, including mainstream banks as well as alternative lenders. Available for businesses that have been directly affected by the Coronavirus pandemic, with the funding being available for working capital (eg PII funding, wages), asset purchases, acquisitions and bridging. Closing date for applications is 30 November 2020. (Further details: CBILS note, Armstrong Watson)

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