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P E E R T O P E E R M A G A Z I N E · S U M M E R 2 0 2 5 85 strategic decisions regarding the financial health, efficiency, competitiveness, and long-term sustainability of their firm. They have the data, but it does not tell the whole story. Don Gibson, a leading consultant with Source Consulting Group, has a deep understanding of law firm profitability. He has built custom reports and has trained dozens since the 1990s, when most firms were focused on hours and realization but did not fully understand profitability. Profitability reporting has been, and continues to be, a contentious and challenging topic for partners. All they thought about was the revenue side. Gibson recognized that most law firms know their annual revenue and overall profit, but they do not understand why the firm generated the specific profitability results. In short, they need to see the whole picture. They probably already have the data, but it is not aggregated with additional data from other systems that will help them understand their actual cost of doing business. Without factoring in the costs of running the company (i.e., leases, staffing costs, etc.), how can they determine if their practices are profitable or not? This is where Gibson and Source Consulting Group come into the picture. The consultants at Source Consulting Group have decades of experience implementing, training, customizing, and updating large financial and operational systems at law firms. They are one of the few firms that can work with any economic system the firm has in place and bring in data loaders to extract data from existing HR and timekeeping systems, thereby avoiding the need to implement yet another system. "In an age when law firms are trying to control their direct costs and become more efficient, leveraging an existing system over buying another is always welcome news to the partners I speak to," added Gibson. Partners want to be educated. They have conversations about their "levers," i.e., their rates, billability, staffing, WIP, expenditures, realization, and other valid metrics and methods to gauge profitability – but not as many of them have informed dashboards to help them understand and advance their conversations around profitability among their colleagues. Profitability reporting has been, and continues to be, a contentious and challenging topic for partners.

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