Get That Bag: How to Build a Collection Process for Your Law Firm

Law firm accounts receivable can be gnarly, sometimes extending into the six figures. 

 

Now, there are a couple of responses to that.  The preferred option is to eliminate accounts receivable altogether, which can be done using epayment options, and potentially evergreen retainers combined with stop work orders.



 

Of course, you may not ever get to 100% collection rates – that’s a tall order – and, you may have some accounts receivable to deal with already.  And so, you’ll need to establish a collection process – and, that should flow from your engagement agreement. 

 

The components relating to money that you need in your engagement agreement, aside from your rate(s) and/or basis of your rates, would be: An escalating series of penalties for non-payment.  An arbitration clause, potentially including access to a state bar’s fee arbitration board.  That stop work order.  This will allow you to put pressure on non-paying clients, via an internal process.  And, if those systems don’t yield eventual payment, you’ll also want to have an ‘out’ clause, that will allow you to terminate the attorney-client relationship, as a last resort. 

 

You can make all the money you earn; but, as with most business-related items, you just need a system to get there. 

 

. . . 

 

Contact us for template fee agreement clauses! 

Through a unique partnership between the Maine Board of Overseers of the Bar and Jared Correia’s Red Cave Law Firm Consulting, Maine attorneys have access to experienced law practice management consultants at a special discounted rate. 

To get started, visit Red Cave’s landing page for Maine attorneys, and start running your law practice like a business.

Comments

Post a Comment

Popular posts from this blog

Pay It Forward: How to Incentivize Attorneys and Staff Beyond Salary

Image
Many law firm owners are comfortable just paying out a salary .  And, that can work, for sure .  But, if you want to drive revenue within your law firm, it makes sense to look at bonusing attorneys and staff in ways that will incentivize your employees to generate or close more cases for the firm, which will lead to additional revenue. Obviously, this is a bit easier for attorney staff, since lawyers can share fees with each other, which makes it easier to create a direct incentive plan .  But, for staff , you can bonus them without sharing fees, including for converting clients from leads, for example, by doing things like offering a $50 bonus for each lead closed, potentially in a certain time frame .   This is the same method that lead generation services use to get paid by law firms, without sharing fees.     But, the place that law firm owners can really make money here is by using origination fees to bonus their attorney staff .  Law firms ...
Read more

Perfect Timing: New Calendaring Tools Make It Easy to Connect with Leads and Clients

Image
Lawyers tend to be inefficient, and have difficulty engaging both leads and clients.  These hurdles are apparent when it comes to the scheduling process.  Attorneys and staff onboard leads for meetings, and schedule appointments with existing clients, via strings of emails -- and, delayed response s only extend the conversation, and the time frame.  And, while this is detrimental for client s (who demand speed and convenience), it’s even worse for leads, who may never convert, if they’re not onboarded simply, and easily.   The good news is that modern technology tools allow for scheduling without the intervention of humans, including you and your staff.  That means that you can say goodbye to all those extra emails, and wasted time.  Programs like Calendly and Acuity allow clients to book appointments directly onto a law firm or lawyer’s calendar, and include buffers and controls, so users aren’t overwhelmed.  LawTap offers a similar tool focu...
Read more

Close Sesame: Three Things You Can Do To Improve Your System Security Right Know

Image
It’s 202 4 , and everybody is still kind of bad with passwords.  Many passwords, in fact, still contain the word . . . password .  That can’t be good.     However, there are three simple moves that you can make to ensure that your passwords are more impressive, and difficult to hack .  That will, in turn, better secure the systems that you are using passwords to protect – which, at this juncture , are pretty much all your systems.   Step one, is to generate stronger passwords .  You can try passphrases .  You can use a password management tool, that will generate more secure passwords for you, so you don’t have to .  And, you can ensure that you’re not using the same password across multiple programs, which is dangerous, because if one gets hacked – they all get hacked.     Step two, is to lean into password managers .  Not only can those systems generate strong passwords for you, you can also use these tools to mana...
Read more