When Managing Receivables, Beware of Paying Lip Service

Sometimes You Hear Only What You Want to Hear
There is no doubt that firms need and want to collect their receivables timely and prevent receivables ageing too far – considering the economic and cash flow challenges they face. Although firms should ramp up their collection efforts as soon as possible to help improve their revenue, how they handle the collection process – which can be long, sometimes tedious and requiring daily attention — can make or break how successful they will be with their A/R management efforts.

Many law firms have missed the message as it relates to managing and collecting their receivables timely. Such firms have relied – very much to their detriment – on a culture of collegiality and camaraderie among the attorneys to set the tone for how they approach getting paid. Firms struggle with how they communicate to their attorneys what is required of them. At the same time, attorneys have a knack for hearing only what they want to hear on how they should pursue clients for payment. On top of this, there are other issues that hamper firms’ efforts to get paid – different practices with different clients can experience different difficulties – requiring different A/R management strategies and techniques.

So, in today’s new normal, here are three things to keep in mind when making your best efforts to get paid:

• Firms that ‘talk the talk but don’t walk the walk’ will have weaker collection results. So stop discussing it endlessly with your attorneys and recognize that there are times when it is most effective to make your attorneys aware of the rules and procedures, and ask that they follow them. It will not get you far to just tell your attorneys: “Go collect your accounts.”
• Firms need to understand the difference between implementing A/R management policies, processes and procedures and spending time creating and revising collection rules. Too often policies are not effective because leadership of the firm gives attorneys too much professional courtesy, allowing them to make exceptions to the rules. It’s one thing to commit procedures to paper, but it’s another to ensure attorneys are following the rules.
• Don’t think a few quick successes are an indication that collection efforts are working. Take a hard look at receivables you are not collecting and how you are dealing with issues that are preventing timely payment, particularly for those receivables over 90 days. Such receivables are more of a challenge to collect and take more time, and are consequently left to the side

You can learn more on our web-site at: https://clientci.com/.

Jump In! The Water’s Fine!

There Is No Better Time to Make a Splash in Getting Paid
Your firm needs to make it clear to attorneys and staff handling accounts receivable efforts what your A/R management expectations are; this includes details on how they are performing their work. We know everything is not black and white and there needs to be a fair amount of latitude for decisions based on individual circumstances. But to improve payment results, you should establish and communicate guidelines on how to manage day-to-day efforts when contacting clients about unpaid bills.

Timing is everything and there is no better time than now to make inroads. Why? Because law firms need to have positive cash flow. Yet firm clients are selecting how they pay to maintain their own cash flow needs. You are facing a double-edged sword. Do not think your firm can just go about trying to collect itself out of harm’s way by dealing with this as a one-time, all-hands-on-deck priority without ensuring proper techniques are being followed by those contacting clients about unpaid bills.
Start understanding how accounts are being worked daily by those handling collection efforts. Know if they are performing best practices, such as:

• Monitoring the number of calls made versus the number of e-mails sent,
• Reviewing the number of client contacts made daily compared to the number of messages left,
• Evaluating the number of days between contact attempts,
• Reviewing the quality of payment arrangements and timing of payment commitments.

The reality is there are many unsettling circumstances in today’s economy that will delay payments. But help your firm keep pace by ensuring it is performing the right follow-up efforts to increase the probability of getting paid.

You can learn more on our web-site at: https://clientci.com/.

Don’t Underestimate the Need for a Strong, Hands-on Accounts Receivable Management Approach

Just as law firms are now adjusting how they position themselves in the legal market, they also must ensure they are correctly managing receivables in today’s ever-changing economic environment.  Firms may need to embrace new strategies to ensure they get paid for their services. Therefore, start asking the questions that will help you determine if your firm is making the adjustments necessary to deal with the ever-changing economy:
What do we need to change, if anything, to ensure we are making progress? Most importantly:

• Determine if you have the right leadership and management team in place to move forward
• Understand how attorneys are managing their A/R remotely and if they are spending enough time on their collection efforts
• Evaluate your administrative staff, specifically whether they are doing the right work the right way
• Measure the results you are achieving as compared to the A/R management efforts you are performing

What role should leadership and management play? If you want to effectively manage receivables, you need to have the ability to tell the attorneys to address their collections, but also understand how to look to other resources to help them achieve results. Take stock of what you are doing — and why — and evaluate what is and what is not working. An important aspect of this is assessing whether you have the right people, with the right skills, in place to do the job. Also, understand that everyone should be held accountable to ensure progress is being made.

You can learn more on our web-site at: https://clientci.com/.

Learning to Get Paid While Living in a Time of Broken Promises

Too many law firms continue to think collections is an easy process. All you have to do is remind clients to pay and they will.

For firms that thought they had a good A/R management system in place, in a matter of weeks, so much has changed, and it has compelled them to re-think their strategy, presuming there was one.

NOW, more than ever, is the time to understand if, when and how much clients will pay. Cash is king for most clients of law firms these days, and it is difficult for them to let money go because they have so many financial obligations.

Therefore, manage your clients’ expectations so that they know that, if they have not paid, they will be contacted throughout the ageing process. Here are a few tips to help:

• Follow-up regularly and timely with your clients to determine when they will pay. Recognize that your firm is not the only one contacting them for payment status. Always thank them for taking the time to speak with you or respond to your e-mail. Having good dialogue and building a sincere communication exchange will go a long way in helping the firm get paid. Building sincere relationships with your clients, listening to their struggles and developing a path for payment are keys to success.
• Request dates or timing on when payment can be expected to help determine when your next follow-up contact should be made, if payment was not made. If clients cannot give you specific payment dates, at minimum agree when a follow-up call would be good.

Start small by educating your attorneys and staff on the day-to-day best practices for managing A/R in your firm. Then figure out how your firm can actually start getting its arms around its payment expectations – Your goal is to build consensus within your ranks on how timely payment information can be a large part of your firm’s revenue enhancement initiatives.

You can learn more on our web-site at: https://clientci.com/.

Go Ahead and Say It! This Is Really a Hard Time to Ask About Getting Paid

Now — don’t you feel better that you said it? Let’s face it: attorneys’ expertise is providing quality and timely service to their clients, not asking them to pay their bills. Many attorneys are not good at it, they do not like to do it and they don’t want to do it. So why should we expect changes overnight? Yes, we are living in a different economic world, but that does not mean attitudes and know-how about how to get paid are going to change just because we want them to. Remember: the definition of insanity — doing the same thing over and over again expecting different results.
So how can you start to think outside the box to best approach your clients about getting paid when they may be experiencing cash flow problems? Here are three tips that can help:

• Your attorneys may feel anxious or uncomfortable reaching out to their clients who may be struggling. Recruit people in your firm who can help the attorneys decide what to say, either by e-mail or by phone, when asking clients about the status of payment. Help attorneys understand it’s all about taking the right customer service attitude. If you have an A/R management team or a marketing team, enlist their help in coming up with appropriate language to use.

• Have your attorneys talk with your accounting and finance team about various payment plans and options before they contact clients — because clients may not be able to pay as they have in the past. Get attorneys to be prepared to recommend a few payment solutions that can be tailored to clients’ cash flow issues — while at the same time — making progress in getting the firm paid.

• Schedule 15- to 30-minute meetings with each attorney to go over receivables one-by-one and determine where they need guidance. Help them develop a game plan for accounts that will lead to specific dates of when payment can be expected.

You can learn more on our web-site at: https://clientci.com/.