Tips On Getting Paid
We have seen more law firms and other business firms destroyed by poor cash flow than any other calamity. Cash flow is what keeps owners, partners and administrators awake at night. Many of our law firm clients have asked us for tips on getting paid. Here are some of our thoughts and suggestions:
- Build a solid foundation with new clients and establish a sound relationship based upon trust, integrity, and open communications.
- Develop a sound client intake system. Screen both new clients and matters and insure that they meet your firm’s profile, requirements, competencies, and capabilities.
- Check client’s credit history within your firm on prior matters and within the general business community at large.
- Establish credit limits for your clients.
- Charge interest on delinquent accounts.
- Accept credit cards if you work with individual clients.
- Discuss fees and expenses up front with the client.
- Require retainers in advance when appropriate. Collect additional retainer as needed.
- Execute fee agreements/engagements with clients on all matters.
- Bill clients promptly upon completion of work or billing cycle. Consider billing more frequently than once a month. Bill completed matters immediately rather than waiting for the month-end billing cycle.
- Cut-off your monthly billing cycle early and date bills and mail so your client receives them in the current month.
- Send out statements (reminder bills) on the 15th of each month.
- Assign someone to be in charge of monitoring collection of delinquent accounts receivable and hold them accountable for results.
- Implement an accounts receivable collections system consisting of a series of follow-up letters after 30, 60, 90 days outstanding; phone follow-ups; and payment plans and other arrangements agreed to with the client.
- Refer non collectable accounts for further action. (Internal billing committee, partnership, collection agency, suit, etc.)