For partners in many law firms, the world has never appeared to be as hostile, bewildering or financially unstable as it does today. The complexities and uncertainties of the changing economic and professional environment have created special financial problems, especially for undercapitalized law firms. The cash flow problems experienced by many law firms, of all sizes, is frequently due to the inadequate capital to support the firm’s operations.
Although there may be many definitions of firm capital, it is usually viewed as being two separate, yet related, elements: (1) working capital and (2) long-term capital.
