Increasing Collection Rates

Good billing practices can help you get paid for the work you've done and improve your client relationships in the process

One common experience for small and mid-sized law firms is the growing amount of receivables. Usually, there are two reasons why bills don't get paid on time or at all. First, there might be something wrong with the bill itself. Perhaps it is unclear or incorrect. Maybe it was sent too late after the fact or wasn't what the client expected. Second, the client wants to pay but is experiencing financial difficulty.

For many firms, the result of this increasingly serious situation is to refocus the staff on collecting outstanding invoices or to renegotiate down or finance clients' accounts-impacting the firm's profitability. Here are some best practices that can help you avoid or resolve collection issues.

Build "payability" into your billing process

To ward off trouble at the onset, bill quickly-people will pay for a service that is fresh in their minds. And bill frequently-large bills received months or years after a matter began or at the conclusion of the engagement are more difficult to pay and often create client relationship problems. It is also a good idea to offer your clients flexible options, such as scheduled credit card payments to support more frequent billing.

Make inroads with your invoices

Choose a billing format that is easy to read. Keep your bills clear and informative, and free of legal jargon.

Be consistent and correct. While five different people may provide billing input, you want the end product to look like it comes from a single source. Create and adhere to a list of standardized terms, abbreviations, naming conventions, etc. Anyone who enters data should spell check in the moment.

Appoint a vigilant reviewer to check each bill before it goes out the door.

In addition to including the amount due, your itemized list of charges (whether based upon an hourly rate or a fixed fee) should also clearly project the value you delivered to the client. Even if you haven't personally been in touch with them during the month of service, use your invoice to connect with the client, indicate what you've been doing gratis-such as those phone calls you've made on their behalf-and express your gratitude for the business.

Ask for the check

Unfortunately, flexible payment options and timely, well-crafted invoices aren't always enough. When bills go unpaid in spite of your efforts, follow up with your clients to ask if something is wrong and how you can help. Based on numerous interviews with small and mid-sized law firms, the consensus is that, a multi-touch collection process works best, i.e., a letter, then a telephone call, and perhaps a fax or email with a note and a copy of the bill. The timing of each client touch should be structured into the process, as well as determining who the most appropriate staff member is to carry out each client touch. For more details about this multi-touch collection process, go to http://blog.krausepm.com/?=388.

Why LexisNexis

At LexisNexis we are committed to helping you spend more time practicing law and less time worrying about billings and collections. Our solutions for small law firms include award-winning software created with input from lawyers like you, and is backed up by a highly experienced and dedicated services and support team.

PCLawTM is the most widely used practice management software by small-sized law firms in North America. A fully integrated time, billing, and accounting software package that is easy to use right out of the box, it is designed specifically to help your firm expedite billing and manage trust, financial, and client accounting tasks. Because it requires less training and includes advanced accounting features like eBilling, remote entry, integrated payroll, and credit card processing, its total cost of ownership is lower than most competitive products.

If you are a mid-sized law firm or need advanced financial management and reporting, choose Juris®.\ Juris is a financial management solution built on robust legal billing software and designed to capture more billable hours and accelerate cash flow. Juris helps your firm accomplish more with specialized tools that enable you to budget more effectively, accommodate divers legal accounting requirements, streamline billable staff management, and analyze your business performance to make better business decisions that will in the end help increase per-partner income.

To learn more, visit www.lexisnexis.com/law-firms/practice-management or call us at 1-800-328-2898.