Jurisdiction(s):
United Kingdom

Key definition

Options definition

What does Options mean? In legal practice, an option is a contractual right, not an obligation, to buy (a call) or sell (a put) an identified underlying (for example shares, commodities or currency) at an agreed strike price either on the expiry date (European-style) or at any time up to expiry (American-style). The holder pays an option premium for this right; key terms include the underlying and quantity, strike, expiry and the settlement method (physical delivery or cash settlement). Options are used to hedge risk, obtain price protection or leverage exposure, and are fundamental in derivatives, corporate finance and remuneration structures. The term is...

Law Firm Finance: Funding Options, Partner Capital Policies, Bank Facilities, Debt Ratios, Cashflow and Lock‑Up Management

Published by a LexisNexis Practice Management expert

Practice notes

This Practice Note sets out guidance on why a law firm may require finance and the ways in which such funding might sensibly be obtained. It also looks at what level of debt is sound and when it becomes too high.

Why do law firms need finance?

All businesses need finance, and law firms are no exception. Funding enables the practice to secure the assets it relies on to conduct its trade. A review of law firm balance sheets shows the principal assets that must be financed are:

fixed assets
current assets

Fixed assets

The main fixed assets are:

property—many smaller practices purchase their premises, whereas this is less typical for larger firms, which are more likely to rent their office space
IT equipment—almost all law firms recognise the need to improve and refresh their IT systems; although such equipment is sometimes leased, it is also frequently bought

Other fixed assets may likewise be acquired, including cars, vans and further equipment...

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Jon Whittle

Jon Whittle Consulting Ltd

Jon is a specialist in developing legal businesses using market intelligence and customer insight to implement successful programmes for change. He works with law firms to create sustainable growth alongside successful project management, implementing new technologies and evolving business operations. Jon has been working on the future of law firms for more than fifteen years, focusing on the strategies and tactics that help firms build real and defendable competitive advantage. Whilst working in a senior leadership role at LexisNexis he was also the architect and author of the widely read LexisNexis Bellwether Reports and is a recognised authority on how law firms can build and grow. Previously, Jon worked, for two decades, at board level, in some of the UK’s largest media companies, transforming traditional businesses into growth in the digital age. He now applies the fruits of this experience,...

Web page updated on 21/05/2026

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