accounting for lawyers

Ten Things: Basic Finance for In-House Lawyers

I know I took an Accounting 101 class in college.  But, I remember very little about it other than I somehow managed to pull a “B” in it and something about the “accounting equation.”  When I got to law school, there was no math (unless you count student loans).  Even when I began working at a law firm, there was some need for basic accounting and finance but certainly nothing I worried about on a day-to-day basis.  Then I went in-house and things changed.  Accounting and finance are the language of business and if you don’t speak the language then you’re just another tourist in ill-fitting shorts, t-shirt, and [insert sports team name] baseball cap.  By “tourist” I mean that you’re not likely to stay very long if you don’t speak the language and the language of business is numbers.  After a few meetings where “EBITDA” and “CAGR” flew over my head, I knew I needed to buckle down and start figuring out what all this number stuff was about.  Over time, I got to the point where I could at least follow along at meetings when the Finance folks pulled out the spreadsheets.

Over the years I kept a notebook of key financial terms, formulas, resources, and other information I think are key to being a successful (and valuable) in-house attorney.   None of this will make you an expert but, hopefully, I can give you some basics to focus on and help you navigate the most common issues. This edition of “Ten Things” focuses on ten things you need to know about basic finance: