Client Connection

Client Connection

Saturday, May 17, 2014

How Do You Respond When Someone Pops the Big Question?

Five months into 2014, you may be getting asked -- "How are we doing with collections?" When faced with this question, you may feel compelled to provide a detailed, numbers-driven answer, with benchmarks, percentages, etc. This kind of financial response may be useful, but there may be more important indicators that require you to look behind the numbers to give you and your leadership a clearer picture of how well the firm's A/R management processes and procedures are working.

Most firms have gotten used to looking at an abundance of financial information and ageing reports to evaluate their progress in managing receivables. Although some of this information is valuable, many reports do not show when payment can be expected. Law firms tends to lose sight of the numerous reasons clients have not paid. This is often coupled with a failure to create the right reports, ones that measure the progress and evaluate the efforts of the lawyers and staff. At minimum, you need to know if an account is actively being pursued, what the payment status is, who is pursuing the collection efforts and whether they are getting results, why clients are not paying, and what needs to be done to get them to pay. Categorize the receivables to determine who is handling the collection efforts, when you can expect payment, whether they are problematic and how good the chances are that you will get paid (and whether particular receivables are simply not collectible).

The person asking the question about collections is most likely the managing partner or another senior attorney who oversees the firm's progress. It is important you direct their attention to situations where efforts are falling short, so they can help get collections back on track. We invite you to learn more on our web-site

If you are going to the ALA conference in Toronto, May 17-May 21, stop by to see us at Booth #713. I would enjoy saying hello.

Best Regards,