How can I make sure my law firm gets paid?
For a law firm to be profitable, it needs to be able to collect payments for work completed.
Timely billing and accounting
Law firms should ensure invoices are sent to clients on a regular basis, setting expectations and ensuring bills are received near when the work is completed.
Descriptive line items should also be used to convey value and make it clear to the client exactly what work was completed.
If using retainers, consider setting up evergreen retainers, where clients automatically receive replenishment notifications when the balance hits a particular minimum2. With evergreen retainers funds are always readily available to cover billable amounts, without requiring significant maintenance or time from the firm.
Accept credit card payments
Make it easy for clients to make payments and increase cash flow by offering credit card payments.
Automated collections process
While often unavoidable, time spent on the collections process can be minimized with automated reminders to clients for past due invoices. When scheduled to send once an invoice hits a certain number of days past due, consistent reminders ensure all overdue invoices receive the attention necessary to prompt payment.
1. How Law Firms Can Prevent Client Non-Payment
2. Fee Tale: This Is Not Your Father’s Engagement Agreement