Client Connection

Client Connection

Tuesday, January 6, 2015

Starting the New Year on the Right Foot

• All firms should take the time and effort to evaluate if they have A/R management best practices in place. Ask whether you are doing the right job, or do processes, policies and procedures exist only on paper or in theory? The key questions to ask are:
  • Do you have the appropriate governance and leadership structure in place?
  • Do you have meaningful reports and information?
  • Do you have a good understanding of how the attorneys are managing their A/R and if they are spending enough time on their collection efforts?
  • Do you have the right administrative staff in place, and are they doing the right work the right way?
  • Are you measuring their performance by results they are achieving?
  • Is the firm regularly collecting its older, difficult A/R?

• The financial management sector of a law firm wants to have strong black-and-white procedures that are common in most businesses, but they are often challenged because there are so many complicated transactions and relationships that do not lend themselves to black-and white procedures. All law firms should have written procedures in place concerning accounts receivable management, and communicate their expectations on collections to the attorneys. However, the procedures need to be workable, and for those receivables that must have exceptions, these exceptions should be monitored closely and not be seen as a way to avoid firm collection policies and rules.
Also, firm leadership must step in to help attorneys understand what specific actions they must take to ensure payment, give them a time frame for getting accounts collected, and provide the right professional support to help them.

• The business environment has evolved. Mindsets have changed, as have business practices. Because law firms are doing business in a different world and making adjustments accordingly, it also requires that they routinely communicate with their clients about unpaid bills to ensure timely payment or resolve problem issues. While past collections experiences should not be ignored, in these changing times it may not be entirely useful as a guide. Although some clients have set roles of when payments will be made, firms must institute regular, steady, professional follow-up of unpaid bills to secure dates of when payment can be expected to help guide future follow-up. By showing clients that the firm is regularly contacting them and monitoring their payment status, they will learn that you are well-aware of their bills and that you expect payment. However, sometimes it becomes the attorney's problem because he or she is uncomfortable about asking for payment and grants too much leeway about timely payment.

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