Gregory Nunn once said: “Never underestimate the value of cold cash.”

While our first cash flow management tip looked at comparing your actual billings as measured against your projected monthly billings, this week we are taking things one step further in terms of looking at how well you are doing in terms of collecting your billings as measured against your projected cash needs.

Accordingly, our second cash flow report that you should be generating from your accounting system is:

#2 – Projected billings versus cash flow needs:

Here you are comparing your collected billings to your budgeted cash flow needs for the month. This tells you if you will be in a projected positive or negative cash balance for the month.  In a perfect world you would be bringing in at least enough cash to meet your projected expenditures for the month, but we all know that we don’t live in a perfect world.

While you can survive a short-term shortage in cash (often by borrowing or holding off on certain expenses), over the long haul you have to bring in sufficient cash to meet all your expenses and then some to stay afloat.

What is often surprising to lawyers is that you can actually ‘grow’ yourself into a cash shortage.  How does that work you ask? Studies have indicated that you will have approximately a 105 day ‘lag’ between the date you incur an expense and the day you recoup that expense from your client.  If you are busy opening new files for clients and incurring expenses on their behalf, you may find that the funds you are investing in these new files are not available to meet your overhead expenses.  You are actually growing yourself into a cash shortage!

It is vitally important to keep a handle on your potential cash deficit by always looking at your collections as compared to your budgeted or projected cash needs.  In this way you can start to take action – early – to avoid a ‘cash crunch’ rather than facing it at the end of the month – when salaries and rent are due.  When it comes time to paying the bills, never underestimate the value of cold hard cash.

Since I last looked, the United Nations Documents site has a new look and feel. For what the site is trying to deliver, it feels very browsable.
One new (to me) feature is the ability to have an e-Subscription.

At the UN’s e-Subscription page you are now able to select what documents you want to receive by email or RSS feed. Available documents include the UN Journal, as well as documents from the General Assembly, Security Council, Human Rights Council, Economic and Social Council and others.

Watch for those little RSS symbols.

Mark Ruffalo once said: Certainly, it’s very easy to fall in love with cash. If you’re going to make all your decisions based on cash, you’re going to have a pretty naffy career.

In my MBA days, I took a series of accounting courses. One of the courses was entitled ‘managerial accounting’ but it really was about how to manage cash. I still recall the professor walking in and saying: “Forget everything you learned in those other accounting courses. Here you learn to manage cash – and that is what you will need to know to keep your businesses alive.”

So how do you learn to manage the cash in your practice? How do you assess how you are really doing? How do you get a solid grip on your financial future?

One key is cash flow management – you must understand over time what funds are coming into your practice, and where the money is flowing out. In this series of posts, we are going to look at the top 10 monthly cash flow managerial reports you should be getting from your accounting system, what they mean, and why you should be producing (and reading!) them at least monthly.

The first cash flow report that you should be generating from your accounting system is:

#1 – Overall and projected monthly billings:

What are your overall monthly billings, measured against your projected (i.e. budgeted) billing target? This report will tell you if your gross income is meeting projections. Needless to say, if you are not billing according to budget, you are not going to be receiving cash according to budget.

A related question is what percentage of collected monthly billings should a lawyer’s income be? According to James D. Cotterman, a consultant with Altman Weil, the figure should be 55-60%. (Cotterman, James D., Fiscal Management of a Law Firm, Altman Weil, Report to Legal Management, September 2001.)

Why do we mention these two ideas together? If your gross income is falling below projections, then there will be a direct and negative impact on cash which you can withdraw as personal income, since you will still be required to pay the bills in order to stay in practice.

We have long advocated that you take the mental approach of ‘paying yourself first’ rather than paying yourself last. Why? Because if you envision paying your projected draw first and then meeting all other expenses, you will work towards that goal. If, however, you take the position that you will pay yourself whatever is left after the bills are paid, then you will only get what is left… whatever that amount might be.

In our view, it is much better to know your financial budgeted goal, work towards it and measure your progress – particularly when that goal is having sufficient cash to meet all your needs, including your draw!

When research is assigned to juniors (and librarians for that matter) it is important to share facts that are critical to the research. It can also be difficult to remember to share everything that might be pertinent.

This tip is a reminder to researchers to ask for facts. The ask might be looking in the file – whether electronic or paper, or it might be talking to the assistant who works on the file. It might be going back to the responsible lawyer to ask for more information. It may prove necessary to get more information from the client.

Regardless of how you get the facts, it is better to have the right information than to base your answer to the research problem on only part of the story.

If the calendar is on the web then everyone in the family can see it. Mobile family? Ensure that it can be viewed (and manipulated via smartphones and other mobile devices).

Platforms? You can use Google Calendar (where you can create individual calendars and link them) or a dedicated family calendar site such as Cozi (http://www.cozi.com/). Cozi also incorporates shopping lists, to do lists and is configured for mobile devices. Never forget a birthday or family event again!

Sarah Glassmeyer of CALI shared a tip from her session at the Canadian Association of Law Libraries Conference yesterday. You can test a website to see how it will act on a mobile device. visit http://www.howtogomo.com to check your research websites before you try and use them with your phone.

If you spend any time on the web, you should be aware of the fact that you can be tracked by websites that you do not visit.  This can include analytic services, advertising networks and social platforms.  Few of these offer any reliable way of opting-out.  Accordingly, we are left with working with a voluntary op-out procedure that is honoured by third-party web tracking sites.

One of the ways to prevent this tracking *at least by third parties who agree to honour a user’s Do Not Track preference* is by installing a plug-in for Firefox, Internet Explorer, Chrome, and Safari.  One such plug-in is available from www.DoNotTrackPlus.com.

DNT+ is a browser tool that blocks the tracking capabilities of advertisers, social-networks and data-collection companies.  In addition to helping restore your on-line privacy, regain control over who sees your activities on-line, stopping pop-up ads and other advertising, it also allows you to load some websites up to 4x faster (since you are not dealing with all that tracking overhead!).

DNT+ prevents your browser from communicating with these third-party data-collectors.

Can you depend on DNT+?  In their words:

We’re also completely dedicated to your privacy, so don’t collect or track anything when you get DNT+ (unlike *cough cough* those other companies with shady ties to marketing people). The only thing we can see is that a download took place by a certain IP address so we can figure out how many users we have. There are no forms to fill out and no tracking of any kind. In fact, the only connection we ever have to the software is when it asks our servers for updates on new trackers to block. That’s it!

Who are these people you may ask?

The DoNotTrack.Us website is maintained by Stanford researchers Jonathan Mayer and Arvind Narayanan. We are affiliated with the Security Lab at the Computer Science Department and the Center for Internet and Society at the Law School.The broader Do Not Track project is a collaboration of numerous researchers, advocacy groups, and technology companies. We have worked closely with Alex Fowler, Sid Stamm, and other Mozillans; Peter Eckersley, Lee Tien, Rainey Reitman, and otherEFFers; Alissa Cooper; Chris Soghoian; Ashkan Soltani; Harlan Yu; and many more.
All text on donottrack.us is licensed under a Creative Commons Attribution 3.0 Unported License.

DNT+ is not the only way to block third-party tracking of your activities.  Ghostery is another.

To give you an idea of the controversy that this is brewing, here is The Atlantic (Alexis Madrigal on March 30, 2012) on “The Advertising Industry’s Definition of ‘Do Not Track’ Doesn’t Make Sense:

There is a battle brewing between the Federal Trade Commission and digital advertisers over a system designed to help people control their data called “Do Not Track.” On the one hand, you have the FTC saying this:

An effective Do Not Track system should go beyond simply opting consumers out of receiving targeted advertisements; it should opt them out of collection of behavioral data for all purposes other than those that would be consistent with the context of the interaction.

That seems like a pretty airtight definition. Do Not Track means, “Do not collect information about me unless it’s needed to show me content that I want to see.” That makes sense, no?

Well, it doesn’t make sense to the online ad industry as represented by the members of the Digital Advertising Alliance. They define ‘Do Not Track’ as something closer to “Do Not Target.” That is to say, the industry’s companies want to continue to collect data even after you’ve said, “Do not track me.” Their only concession is that they won’t show you ads that have been constructed with your data in mind. Here’s the summary of their position in the New York Times:

The advertising group, however, defines it as forbidding the serving of targeted ads to individuals but not prohibiting the collection of data.

I have installed DoNotTrack and I am (uncomfortably) aware of the number of sites that DNT+ has stopped.  What worries me is the number of social buttons, advertising networks and tracking companies that have not agreed to honour the voluntary opting-out of users from being tracked.  Ultimately I believe that legislation (both in the USA and in Canada) would be welcome  (and necessary) to stop such third-party tracking.  Until then, those of us that wish to take back our privacy need to download such services as DoNotTrack plug-in offered by Stanford’s Center for Internet and Society or Ghostery to take back our privacy.