Businesses that are experiencing temporary
cash flow squeeze as a result of increasing sales, growing pains, expansion, seasonal fluctuations, acquisitions,
high leverages, insufficient or used up credit lines.
Profit
squeeze: Mid-size law firms will continue to be affected by a «profit
squeeze» resulting from (a) increased overhead due to
higher associate and staff salaries and benefits; (b)
higher automation costs, professional liability insurance and marketing expenses; (c) partners» unwillingness / inability to increase hourly fee rates for «commodity» type work to off - set
higher overhead; (d) enhanced client scrutiny of hourly rates, hours to produce work and lawyer and paralegal staffing of work assignments; (e) pressure by corporate counsel for law firms to absorb more of the «soft costs;» (f) slower paying clients, that affect
cash flow and hence the availability of distributable dollars for partners; and (g) a great many mid-size law firms are burdened with
higher debt.