Client Connection

Client Connection
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Wednesday, October 9, 2019

The Fourth Quarter is Here. There Is No Longer Time to Wait.

Too many law firms continue to think that collecting their receivables is an easy process – all you have to do is remind clients to pay and they will.  We at Client Connection have been telling you that A/R management and collections is all a process that must be followed regularly and consistently throughout the year in order to achieve the right results.  Now we’ve reached the fourth quarter, when the rubber meets the road.  Listen to what others are saying about receivables.

Gretta Rusanow and Jeff Grossman of Citi Private Bank’s Law Firm Group recently published a report entitled “Law Firm Margins Tighten as First-Half Expenses Outgrow Revenue.”  They anticipate that “it will be a challenge for the industry to see a repeat of 2018’s strong performance in this year’s results,” but they expect 2019 to be a good year compared to earlier post-recession years. A survey of 191 firms saw revenue growth of 4.1% in the first half of 2019, but attributed that growth largely to the rise in lawyer billing rates. Soft demand, they say, has reduced revenue growth, but so has the lengthening of the collection cycle, which they report as a prolonged trend.  Changes in client bill payment behavior have been causing the collections showdown, and causal factors include e-billing systems and greater scrutiny around bill review, as well as changes in payment terms.

Citi’s report concluded that “collecting on increased inventory levels will be key.”

Separately, Thomson Reuters Peer Monitor Index reported that law firms collected 89.2% of the bills clients had agreed to pay, in the third consecutive quarter of decline. 

Said a September 19 article in Bloomberg Law, “Declining realization is a long-term trend that has a pernicious, often unspoken impact on law firm finances.”  That article concluded, “So you keep raising rates, but if you can’t bill it and you can’t collect it?  It’s ridiculous.”

At Client Connection, we want to make sure that the message comes through loud and clear:  pay attention to your accounts receivable and take action in a timely and thorough way.  Be realistic about whether your firm is underachieving in its A/R management goals and efforts.  And if your firm has developed bad habits, now is the time to overcome them. Learn more on our web-site at: https://clientci.com

Tuesday, September 17, 2019

Keep Looking Underneath Those Ageing Receiveable Numbers for Reasons Why Your Firm Has Not Been Paid. You May Be Surprised What You Learn!

While clear, fundamental accounts receivable management is common in most businesses, law firms are often challenged to be paid timely because there are certain clients, transactions and payment arrangements that do not or cannot follow prompt payment guidelines.  However, recognize that these are the exceptions and not the rule.  Moreover, law firms need to understand that these exceptions have the potential to gain traction and become problem paying accounts as they age.  On top of that, firms sometimes have a false sense of security that they have a heaping pot of revenue that needs to be paid, when what they really have is an empty pot of promises that continue not to be paid (if they ever will be).

Do not fool yourself into thinking that your A/R management and collection efforts can succeed until you understand which moving parts need closer attention and adjustment.   Change can be difficult, especially with so many other priorities to attend to when managing a busy law firm, but the bottom line is the bottom line.  It requires all hands on deck to ensure that bills are in line for payment --or can determine what has to be done to get them in line).  Determine:


  • Whether accounts are actively being pursued at critical ageing points or follow-up efforts are stagnating
  • What the payment status is, what can be done to speed up the process and what the chances are of not being paid
  • The time commitment, skill level and level of motivation of those pursuing unpaid bills, and what success they are having, especially with older accounts
  • Why clients are not paying, and what steps are being taken to get them to pay.


There can be a false sense of security that collection efforts are working when revenue is rising and budgets are met.  Therefore, it’s critical to take a harder look at receivables that are not being collected and how you are dealing with issues that are preventing payment -- particularly for those receivables over 90 days – that can tell a whole different story. Would you like to learn more? Please visit our web-site at https://clientci.com/

Thursday, August 22, 2019

Stop Making Assumptions and Start Asking Questions About Your Firm's A/R Management Efforts

Client Connection has been helping law firms with accounts receivable management for over 23 years. So now seems to be as good a time as any to take stock on how well law firms are progressing with their accounts receivable issues and the challenges they face in making improvements.
Let’s start by going beyond false assumptions. Let’s ask questions we need to answer – because you know what happens when you assume...

Learn more.  Click here to read our recent newsletter.

Wednesday, April 10, 2019

Timing is Everything When It Comes to Improving Your Firm's A/R Management Efforts

The first part of the year is critical for evaluating how your firm can do better to manage and collect its receivables.  But if you wait for changes to happen to how your firm manages its A/R, you will lose time and the opportunity to start improving how your firm can add to its bottom line. 
Time is not on your side when you have unpaid receivables ageing and you don’t have a strategy for how to begin.  However, you know it needs to be done.  Henry Ford once said, “Don’t find a fault, find a remedy.”  While the year is still relatively young, we recommend you take these three steps to get started:

1. Take the lead to determine how well your firm is doing with its A/R management – At most law firms, everyone shares the responsibility for accounts receivable management – which of course, means that no one really takes full responsibility.  Take the time to assess how things have been done at your firm and ask these questions.

  • How are we doing with managing our A/R?
  • What do we need to be doing differently?
  • Do we have the right resources to make improvements?

2. Next, understand what is going on in your firm – Have you allowed your clients too much leeway to pay at their own discretion?  Does the culture of your firm permit attorneys to go it alone in deciding how they manage their receivables (or, in too many cases, NOT manage their receivables)?  Do you have processes and administrative A/R management functions, but neglect to measure if they are succeeding in accomplishing payment?

3. As a result of your observations, educate the leadership of the firm where improvements can be made – Leadership can sometimes be at a disadvantage when trying to determine how to improve A/R management and collections since they are flying at 40,000 feet, overseeing the direction and vision of the firm and don’t have their ear to the ground assessing why the firm is under-achieving in this area.  Provide them with insight on receivables the firm is not collecting and best practice solutions to improve collection results, especially with ageing, difficult-to-collect A/R.


Law firms that address and actively work at getting results from their collection efforts early in the year will see a real payoff at the end.  For those that do not – it will be a long year.

If you are attending the ALA 2019 Annual Conference & Expo in Grapevine, Texas this month, please stop by Booth #910 to say hello.  We would be happy to answer any questions you may have about your firm’s accounts receivable management. And please feel free to visit our web-site at https://clientci.com.

Tuesday, February 5, 2019

Thaw Out Your Accounts Receivable Management Strategy for 2019

The great American poet, Robert Frost, once said, “You can’t get too much winter in the winter.”  That may be up for debate this winter, considering the record-setting cold temperatures in many areas of the country.  However, the cold conditions we are experiencing should not freeze our thinking about where changes need to be made to your firm’s accounts receivable management.  While your past collection efforts should not be ignored, in these changing times, it will serve your firm well to see what changes are necessary to manage your A/R in 2019.

Your collection efforts can’t succeed unless you understand which moving parts need closer attention and adjustment. Change can be difficult, especially with so many other priorities to attend to, but ageing A/R can often be difficult to deal with. The firm must take a position and have clear thinking on its A/R management efforts to ensure bills to clients are in line for payment (or what needs to be done to get them in line). To begin, start evaluating:

  • Meaningful information to determine the status of payment. Financial numbers are beneficial, but the stories behind those numbers will give you a clearer picture of the progress on your collection efforts.
  • Whether invoices are actively being pursued at critical ageing points. And if not, why?
  • What the payment status is and what can be done to speed up the process. Promises to pay often lead to more promises -- and no results.
  • The skill level of those pursuing collection efforts and what success they are having -- especially with ageing A/R.
  • Why clients are not paying timely, or not at all -- and what steps are being taken to get them to pay.

There is often the misperception that a backlog of ageing receivables will turn into timely payments -- and money will roll in simply when the firm needs it to.  This faulty logic hinders your ability to maintain a healthy revenue stream.  Unless habits change, firms should not expect to increase the likelihood of getting paid as receivables age. 

Now is an excellent time to take action.  Help your firm make changes in your processes and practices to help enhance revenue by converting your backlog of A/R inventory.  Don’t freeze-up! Learn more on our web-site... https://clientci.com/