I hope you enjoy your job as a lawyer, and I hope your firm enjoys helping clients, but everyone goes to work every day for one reason, and that’s to make money. All too often law firms do not generate as much revenue as they should, and it’s only because they’re losing it!
This is called leakage. It means that your firm’s lawyers are performing tasks and incurring expenses that simply aren’t being billed to the client. If the work your firm does, or the expenses put forth aren’t billed your firm is losing money. The worst part about it, is there is nobody else to blame but yourselves.
Because nobody likes to have to blame themselves for anything we’ve put together a few tips that can help you avoid leakage for your firm.
Tips To Avoid Leakage & Make More Money For Your Firm:
- Allocate direct costs to matter files as they are spent– When direct costs are incurred, it is important to attach them to the matter they are associated with at the time of spend. This ensures that this income doesn’t fall by the wayside and in your client’s pocket rather than yours.
- Understand everything must be billed at time of expense– It isn’t just simply direct costs that need to be billed when they are incurred. The time your firm spends on a matter needs to be recorded and applied to that matter as it happens. Procrastinating and waiting to do this will only result in leakage.
- Account for overhead costs– Many lawyers are concerned with over-itemizing a bill. It can create the impression that you are padding the bill, and trying to squeeze more out of your clients. At the same time, you can’t ignore all of your firm’s overhead costs and need to account for them. Sometimes the best way to do this is to charge a percentage of your time cards and expense cards. CosmoLex allows you to automate overhead fees.
Many law firms have turned to the CosmoLex practice management system to help reduce leakage and make more money for their firm. If you’d like to do that same for your firm, you can try CosmoLex for free..