But now a recent article in The American Lawyer predicts that 2015 may prove to be a tougher year for collections than 2014 was. The article cites a report by Citi Private Bank's Law Firm Group, showing that firms took longer to convert entries on their timesheets into cash in the first three quarters of 2015, compared with 2014. The report says that revenue growth for law firms has also slowed this year, suggesting that there could be an especially large collections push at the end of this year. Gretta Rusanow, who heads advisory services at Citi's Law Firm Group, says that realization rates at law firms dropped during the years after the 2008 Great Recession, and they have not yet fully rebounded. Pre-2008, realization rates were around 94%; now the industry average is closer to 86%.
So what can you do to see that the firm is taking every possible step to ensure December ends on a high note?
- Start the month off by meeting with attorneys to determine what help they need getting their accounts collected. Don't just drop in -- schedule a meeting in advance to go over their A/R and find out how you can give them some hands-on help.
- Get payment commitments from clients who are expected to pay by year-end and the exact date when payments can be expected. This information should drive your follow-up collection effort. This is very important!
- Provide the attorneys a checklist of items that will help ensure payments are made, such as: verifying clients have copies of all outstanding invoices, determining if clients' offices will be closed the last week of December (to make sure payments have been processed before they close), providing the attorneys with routing instructions if payment is to be sent by wire, or an overnight express mail account number for quick delivery, etc.
- Get out of your comfort zone and regularly walk the halls and check in with the attorneys during December. If your firm is large or has outer offices, get others to walk the halls, too.
I know you are busy, but take ownership of what needs to get done. Get more familiar with us on our web-site at: http://www.clientci.com/
Happy Holidays! I look forward to talking to you next year!