Start Taking a Strong Position NOW in Managing Accounts Receivable in 2018

All law firms should take a strong position on accounts receivables management and be able to communicate their expectations on collections to the attorneys, knowing that complicated transactions and relationships do not lend themselves to black-and-white procedures. A/R management procedures need to be practical and workable, but there needs to be room for exceptions. Yet these exceptions should be monitored closely and not seen as a way to avoid firm collection policies and rules. Giving too much individual autonomy to the attorneys is often the root of a firm’s A/R problems.

Remember, managing accounts receivable for a law firm is a step-by-step process, which must be monitored closely, whether the economy is up or down.  Beware of certain attitudes that can prevent procedures and rules from working, such as:

1. Thinking that having an infrastructure in place alone will result in relieving the firm from ensuring that it works.  A strong A/R management infrastructure must be supported by a strong commitment to action and a change in mind-set necessary to address all the issues preventing clients from paying. Whatever the issues are -- attorneys or collection staff not doing their jobs, not working closely with clients to monitor when and if they will pay, or not using the right collection strategy – changes must be made if you want to see results.
2. Giving the attorneys too much leeway in managing their receivables. Firms have long been inclined to give their attorneys “professional courtesy” to manage their receivables as they see fit.  The traditional culture of forgiveness needs to be replaced with high expectations. We use the term “manage” very loosely because, in far too many instances, the attorneys are not being managed at all.
3. Not focusing on collection efforts on receivables starting at 60 days past due. Thinking that older receivables dictate when collection problems begin is not true. The reality is that collection problems begin early in the ageing process, but firms often do little to address issues sooner rather than later. Due to the nature of the transaction or the client arrangement, there may be a need for alternative payment arrangements. But do not let these payment exceptions become the rule.

Having a plan is one thing. Putting it into action, monitoring it, and making sure it works is quite another. Learn more on our web-site at http://www.clientci.com.