Law firms or rather a law firm is a business entity that is often formed by a lawyer or a group of lawyers to practice or see law being practiced. The law firms offer an array of functions, the primary function is to advise their clients that is the either individual or corporation about their legal rights or responsibility. nonetheless the law firms offer their clients with lawyers that provide representation to them in an array of cases which may include the civil or criminal cases, business transaction cases and other matters that ought to or rather would seek legal advice and assistance.
In many countries or rather in many jurisdictions there are an array of laws that are put in place about the ownership of a law firm or law firms, it is only lawyers that are allowed to own a law firm or rather those that are not lawyers are generally not allowed to own or manage a law firm. Therefore the law firms cannot be a quick source of capital through the initial public offering on the stock market like it is the case in many corporations. The law firms must, therefore, raise capital from the existing or the additional equity partners or either taking debts normally in the form of the line of credit. In some states this complete bar to non-lawyers ownership has been codified by their bar association. In order to keep track and classify the law firms in accordance with their performance there are three categorical pillars that may prove to be of great or significant help, the pillars may include the or rather may comprise of the.
The pillars may include the law firms profit per partner, this is the net profit that is divided among the equity partners. High profit per partner is often related to the of a firm and its attractiveness to other potential equity partners. Revenue per lawyer is also another standard measure of the performance of a law firm, it uses the revenue divided by the number of lawyers to keep track of the law firm’s performance, this approach generally shows the revenue generating ability and capabilities of the firms’ lawyers’ in general, but it does not venture in the firms’ expense such as the office overhead. The average compensation is the third statistic that is used to rate the firms performance.
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