How can our law firm fix our cash flow?
Clear communication goes a long way, from first meeting your client through the billing and payment process. If your client has a good understanding of how they will be billed, it can help you avoid some bumps when it comes time to collect. Be sure to have them sign a written fee agreement so that everyone is (literally) on the same page.[1]
However, even with these strong first steps, collecting on bills can quickly become a time-consuming process. The tips below can help streamline collections and keep you on top of your invoices.
Evergreen retainer
An evergreen retainer gets replenished and isn’t allowed to run out. But knowing a matter’s burn rate, or how quickly a retainer can be depleted, and keeping an eye on multiple accounts is time-consuming. One solution is automation. Use a program that notes when a retainer gets low and prompts replenishment.[2]
Timely billing
Don’t wait to surprise your client with a bill months down the line. Instead, use momentum to your advantage – present your client with an invoice when the memory of your services is still fresh and immediate. Your timeliness may encourage them to be prompt in paying as well.
Automated payment reminder
When you do have to follow up with an overdue invoice, an automated reminder speeds up the process. This is a great way to save yourself time and mental effort that could be better spent on other things. Automation also ensures the reminder goes out quickly, giving the client more time to pay.
Specific and understandable billing
It’s so much easier for clients to pay a bill if they understand it. This means the invoices should be both easy to read and descriptive. Some attorneys get tired of churning out itemized bills, but if you use a tool that tracks your time on various tasks and links them to your legal billing program, you can expedite and improve the generation of your invoices.
While all of these processes seem to require more effort on your end, they can easily be accomplished with the right tool. Ultimately, these tips make billing and payment easier and more straightforward for you and your clients.
References
1. Attorney Fees: How to Avoid a Conflict with Your Client
2. The Basics of Client Retainer Management for Lawyers