is a Medium Rare UI Kit exclusive to Webflow Templates. Browse more here
Weekly cash forecasting feels like one of those unglamorous habits that can transform a law firm’s confidence almost overnight. The numbers tell you whether you are moving toward growth or quietly drifting into a cash crunch that catches partners off guard.
Legal work creates a strange rhythm for money. Revenue can surge after a settlement or slow to a crawl while billings sit untouched in someone’s inbox. Meanwhile, payroll hits every two weeks, case costs pile up, and compliance rules around trust accounts complicate decisions. A forecast creates a clear view of what is coming. It gives partners a calm understanding of what the next 30 to 90 days will look like for liquidity, spending priorities, hiring decisions, and growth.
This simple ritual can be the difference between hesitating on opportunities and confidently investing in the firm’s future. In this article, we’ll break down the essentials of cash forecasting for law firms, why it matters, and how we approach it.
A weekly cash forecast is a short-term projection of the money a firm expects to receive and spend over the next several weeks. It looks at timing rather than just totals, which is what makes it a more useful tool than a standard P&L. The goal is a clear view of cash entering and leaving the operating account so partners can make decisions without guessing or waiting for surprises.
This exercise looks different in a law firm because the flow of money does not move in a steady subscription-like pattern. Revenue is tied to the progress and outcomes of cases, with unpredictable billing cycles and slow responses from insurers and corporate clients. Trust rules also mean firms cannot treat retainers or settlement funds as available cash until they are properly earned and transferred.
Case-related expenses routinely go out the door well before reimbursement arrives, and major growth investments like hiring or marketing require careful timing. A weekly forecast helps firms navigate these realities with sharper visibility and fewer disruptions.
It focuses on the movement of money in the near future so leaders can see financial reality as it unfolds. It looks at what the firm expects to collect, what it plans to spend, and when those shifts in cash position are likely to happen.
This simple structure creates clarity without unnecessary complexity. By tracking 3 core components, the firm gains a reliable picture of short-term stability and opportunity.
Cash coming in focuses on revenue with a high likelihood of collection in the near future. That includes settlements that are already in motion, aging accounts receivable that are being actively followed up, and payment plans with consistent history.
Evergreen retainers that are expected to convert into earned fees also fall into this category. Forecasting filters out wishful thinking and ignores amounts tied up in early-stage WIP. The goal is to track real liquidity, not theoretical revenue.
Cash going out includes all expenses that will realistically hit within the forecast period. Payroll tends to be the biggest responsibility, along with expert fees, court costs, and other case-related spends that require cash upfront.
Marketing campaigns, software subscriptions, rent, insurance, and partner distributions round out the typical list. These expenses usually carry fixed schedules, which makes them easier to predict. Having them laid out in advance gives the firm better control over runway and upcoming obligations.
Timing is what makes weekly forecasting valuable. It aligns inflows and outflows across specific weeks to show when cash might tighten and when breathing room returns. This view drives decisions such as when to speed up collections, delay discretionary spending, or move forward confidently with hiring.
Because trust funds cannot be used freely until they are earned and transferred, timing protects both compliance and operations. The result is a reliable snapshot of the firm’s short-term financial health that keeps everyone ahead of surprises.
Law firms constantly wrestle with cash flow volatility. Revenue depends on how cases progress, how quickly clients or insurers pay, and when fees can legally move from trust to operating.
It creates a situation where a firm can appear profitable on paper while struggling to cover payroll or fund new matters. It also protects against that gap by giving partners a near-term view of liquidity before decisions lock in.
This way, firms gain the confidence to handle slow periods without panic, move faster on hiring or marketing opportunities, and reduce the stress that comes from living too close to uncertainty.
Here is how we build a weekly cash forecast that supports smarter planning and predictable growth. In this video, we’ll do a quick rundown of our report structure, including how we track incoming revenue, upcoming expenses, and timing differences.
This way, firms gain the confidence to handle slow periods without panic, move faster on hiring or marketing opportunities, and reduce the stress that comes from living too close to uncertainty.
A cash forecast becomes far more valuable when it is built correctly and reviewed consistently. The right structure can turn it into the heartbeat of the business, shaping every meaningful financial move the firm makes.
If you want experienced guidance in designing and maintaining a financial model that delivers clarity every week, our team is here to help. Law Firm Velocity supports firms that are serious about operational finance and ready to grow with confidence.