Client Connection

Client Connection

Tuesday, July 18, 2017

It Doesn't Pay to Keep Quiet About Your Accounts Receivable

Renowned business management consultant Peter Drucker once said, "The most important thing about communication is hearing what isn't said." So if ageing receivables are not being paid -- why not?!?!?  Law firms should be hearing this silence loud and clear.

In fact, you can expect this quiet to become louder as law firms get closer to year-end.  Compoundng this problem is clever clients who use the silence to their advantage -- by paying slowly or not at all.

Attorneys hold paramount their clients' interests, but they often don't give them the same attention by talking with them about expecting payment at a certain time. Yes, there are legitimate reasons that prevent timely payment, including complicated transactions, equally complex business relationships and disputed resolutions, but these should be the exception, not the rule. Personal, one-to-one communication efforts are essential to getting paid:

  • Clients reason that if the firm has waited months to try to collect unpaid bills, they can wait to pay the firm. The longer a firm waits to talk with their clients about unpaid bills, savvy clients realize, the more likely the bills will end up being discounted or forgotten altogether.
  • Don't underestimate the need to learn why clients have yet to pay their bills. For example: cash flow problems, "sticker shock" on the size of the bill, and uncertainty about what services were provided are prime reasons why open communication is essential to getting paid.
  • Attorneys may lose clients by doing poor work or by failing to deliver client service -- NOT by asking clients to pay their bills.
  • Most clients will not call if they have a problem with a bill.  Many are uncomfortable talking about money. It is the attorney's responsibility to initiate the call.
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