Can Your Law Firm Survive a Slow Month? How to Calculate Your Financial Runway

TLTurner Group
Jun 3
3 min read

If your Law Firm experienced a sudden dip in revenue tomorrow, how long could you keep paying your staff, covering your tools, and paying yourself—without panicking?

That’s the question your financial runway helps answer.

Understanding your runway isn’t just a finance trick—it’s your strategic advantage. In this post, we’ll explain how to calculate it, why it matters, and how to build a longer one so your firm stays resilient no matter what comes your way.

What Is Financial Runway?

Financial runway refers to how many weeks your Law Firm can continue operating with the cash you have on hand, even if no new revenue comes in. It’s one of the most important cash flow metrics for Law Firms—especially those navigating seasonal dips, inconsistent collections, or growth phases.

Think of it like this:

Strength = Revenue + Profit.
Flexibility = Cash + Access to Capital.

If you’re not tracking your runway, you're likely stuck in reactive mode—making decisions out of fear or urgency.

But when you know your runway, you move from survival to strategy.

How to Calculate Your Law Firm’s Runway in 2 Steps

You don’t need a finance degree or special software—just a calculator and some basic numbers.

Step 1: Determine Your Weekly Burn Rate

This is your firm’s average weekly operating cost. Include:

Payroll.
Office rent.
Practice management software (e.g., Clio, MyCase).
Malpractice insurance.
Subscriptions.
Your own salary.

Example: $20,000/week

Step 2: Divide Cash by Weekly Burn

Take your current cash balance and divide by your weekly burn.

Example: $80,000 ÷ $20,000 = 4 weeks of financial runway

That means if revenue stopped tomorrow, you’d have four weeks before your cash ran out.

Why Aim for 8 Weeks of Runway?

Two weeks of cash means panic mode. Four weeks gives you a buffer. Eight+ weeks? That’s strategic power.

With 8+ weeks of runway, your law firm can:

Take time to hire the right person.
Survive collection delays or seasonal slowdowns.
Invest in growth without borrowing out of fear.
Say no to bad-fit clients and make values-based decisions.

Cash gives you choices. It protects your peace of mind and keeps your firm flexible.

How to Build a Longer Runway

If you're not at 8 weeks yet, here are a few smart ways to get there:

Automate savings

Set aside a percentage of every client payment into a reserve account.

Audit your subscriptions

Cut unused tools or overlapping services.

Speed up collections

Use payment links, offer retainers, or invoice faster.

Forecast for slow seasons

Know your revenue trends and plan ahead for dips in cash flow. Even adding one week at a time is progress—and it adds up fast.

Law Firm Financial Runway = Peace of Mind

If you're serious about improving your Law Firm’s cash flow, budgeting smarter, and becoming a more confident leader, your runway is where to start.

Your action step this week: Calculate your financial runway.