15 Legal Billing Practices to Help Your Firm Get Paid Faster
Bad legal billing practices have plagued law firm operations and, in turn, law firm growth for decades. Entering time, collecting timesheets, and assembling bills can steal inordinate amounts of otherwise productive time, even from the most ambitious lawyers. Clients routinely wait months to be billed after the relevant work was performed, and that results in client complaints and cash flow problems for the firm. Each of those factors does its part in handcuffing the firm’s opportunity for growth.
Below are 15 legal practices-both good and bad- that can help your firm get paid faster.
1. The Longer You Wait, the Less You’ll Get Paid. The longer you wait to send out the bill, the more likely you’re in for a haircut and the bigger that haircut is likely to be.
2. Clients Won’t Pay a Bill Unless They Receive One. Whatever “slow pay” instinct a client has doesn’t even start until they get the bill to begin with.
3. Not Billing in a Timely Fashion Sends a Message. When you don’t send bills in a timely fashion, you send your client a message that receiving prompt payment really isn’t all that important to you.
4. Don’t Poison Relationships and Scare Away Business. Sending late, large, and surprising bills will ruin your relationship with your clients and hurt your chances of earning more business from them.
5. Don’t Cause Problems For Your Client & Screw Up Their Budget. When your bills come in on time and on budget, your client is more likely to automatically pay them without thinking twice.
6. Delaying Billing is Like Giving Away Free Money. By not sending your bills out on time you are essentially offering interest-free financing and performing your services at a discount.
7. Avoid Communication Breakdown. A regular, descriptive bill is a nice backstop to ensure that you are keeping the client well-informed and that you are on top of the matters at issue.
8. Predict Your Future Income. Getting your bills out regularly and on time is the most important tool you have in predicting your future income.
9. Capture Time With Easy, Modern Tools. Get in the habit of capturing time as close as possible to when it’s being expended, which is easy to accomplish with 21st Century tools.
10: Beat The Procrastination Monster. Realize that procrastination costs you money. The Pomodoro Technique, checklists, and time blocking can help you get the bills out on time.
11. Use the Pomodoro Technique. Set a timer for 15-25 minutes and work uninterrupted for that block of time. Then take a break. You’ll be amazed at how productive you can be.
12: Get a Billing Buddy. Working with someone else will keep you accountable and help get your invoicing done on time and regularly.
13. Standardize Your Tools. Employ easy-to-use and reliable tools to make billing easier, eliminate errors, and keep the firm staff on the same page.
14. Make Small Improvements Each Quarter. Don’t try to introduce new changes to your office practices all at once. Instead, incorporate a couple every quarter, starting with the most important fixes.
15. Rolling Out Changes and Letting Your Clients Know. Let your clients know when you are making a change to your billing practices.
When your billing is under control and when cash is arriving in at a more regular and predictable pace, it can not only result in a more enjoyable and lucrative practice, but a practice that has the time and resources to grow.