Over the years, many law firms have taken steps to develop policies and procedures to ensure accounts receivable get collected. Firms take great pride in the fact that they have developed such a well-written document.
But many of these firms often learn the hard way that these policies exist only in writing and are not doing the job of getting A/R collected, especially older, difficult accounts. Are policies and procedures the right way to hold attorneys accountable for getting accounts collected?
This is a difficult dilemma for many law firms. While the firm's financial managers want to have strong black-and-white procedures, which are common in most businesses, the challenge is that there are so many complicated transactions and relationships that do not lend themselves to black-and-white procedures. All law firms should have written procedures in place concerning accounts receivable management, and communicate their expectations on collections to the attorneys. However, the procedures need to be workable, and for those receivables that must have exceptions, these exceptions should be monitored closely and not be seen as a way to avoid firm collection policies and rules.
Giving too much autonomy to the attorneys is often the root of a firm's A/R problems. Firm leadership must step in to help attorneys understand what specific actions they must take to ensure payment, give them a clear time frame for getting accounts collected and provide the right professional support to help them.
Law firms must continue to state their position on collecting accounts receivable and take measures to ensure they are working. Although exceptions to policies will always exist, and are needed, they should be considered just that: exceptions, and not the rule. Learn more on our web-site at: http://www.clientci.com/
