SESSION 1 ASSESSMENT: The Legal Cheek Commercial Awareness Academy 2022-23 (law firm economics, with Cooley) in partnership with BARBRI
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Your email address
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Which of the following is the most common income model for law firms?
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Conditional fee arrangements
Fixed fees
Billable hours
Damages based agreements
How is a law firm’s profit calculated?
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Billing rate multiplied by number of associates
Revenue minus costs
Value of sales multiplied by quantity
Direct costs minus administrative costs
What does WIP stand for?
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Wealth in practice
Working in partnership
Winning in principle
Work in progress
Which of the following is NOT a reason why profit is important for businesses?
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It supports investment
It means they have a large market share
It funds bonuses
It allows for strategic flexibility
What is the second stage in the lifecycle of a matter?
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Collecting payment
Winning the work
Billing the client
On-boarding
What is financial hygiene?
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A firm’s profit strategy
Financial measures put in place during the pandemic
Overall financial viability and security
A synonym for money laundering
How do law firms tend to report profitability?
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Net profit
Income over the year
Gross profit
Profit per equity partner
What happens if the working capital cycle increases?
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The payment terms of staff and suppliers change
It takes longer for lawyers to do the work for the client
It takes longer to receive money from clients after completing work
The profitability of a piece of work changes
Which of the following is a direct, rather than administrative, cost?
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Salaries
Insurance
Office rent
Contractors
What is bad debt?
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Loans taken out
Unpaid bills
Refunds owed
Expenses paid
Calculation
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