The Future Value of Today's Inventory
Most law firm managers understand intuitively that the value of inventory (both WIP and A/R) degrades over time, but by how much and how quickly? The ability to understand and answer these two questions is the first step in preparing a realistic, forward-looking valuation model ' one that can identify opportunities and drive action.
A Discussion on Partner Capital
In a July issue of The National Law Journal, there was a lead article titled, "Firms Ask Partners to Pony Up." That article sparked questions from clients of our firm, Altman Weil, Inc., regarding law firm capital structures. This article pulls together a number of the issues we have been dealing with recently.
Value Behind the Business Process Patent Controversy
A decision in the controversial patent case <i>In re Bernard L. Bilski and Rand A. Warsaw v. U.S. Patent and Trademark Office</i> is currently pending in the U.S. Court of Appeals for the Federal Circuit. Nominally, at stake is the future patentability of business methods. In fact, the patent question is but the most visible element. The scope of the underlying topic is far greater. The case highlights the importance of the business processes that link global business networks and create value in the intangible assets that comprise approximately 70% of the average company's market capitalization.
Profits Per Me (PPM)
Lateral partner candidates need to look beyond PPP and focus on what the authors call PPM ' "profits per me." Averages are great, but how much of the law firm's profits can one fairly expect to get?
ERRATUM
In an article that appeared in the September 2008 issue, <i>Measuring Realization to Improve Firm Profits</i> by K. Jennie Kinnevy, the author's biography was inadvertently omitted.
Unreasonable Compensation to PC Shareholders: The IRS Gains a Victory
The general view has been that unreasonable compensation claims against shareholder employees of professional corporations was not an issue. In <i>Pediatric Surgical Associates P.C. v. Commissioner</i>, the Tax Court determined that compensation paid to the shareholder physicians was unreasonably high because it exceeded the value of the services performed. Many law firm professional corporations could face this same issue.
