Don’t Send Your Clients the Wrong Message by Not Having an Effective A/R Management Program in Place

 Put a little more harshly, the reason why law firms need a strong accounts receivable management program early in the ageing process is to prevent a domino effect of self-inflicted pain, which firms so often put themselves through by letting receivables age without having effective, results oriented procedures in place to collect receivables promptly.

Here’s why:

• When law firms send out their regular monthly bills, and do not follow up promptly when clients don’t pay after 30 days, the message they are sending to their clients is: “Pay when you can. Our bill is not a priority. We don’t need the money right away.” 
• Next, with poor one-on-one follow-up with clients early on, firms lose the opportunity to determine, as soon as possible, whether or not a client can or will pay – giving the client confidence that they are the ones who control when and if they will pay.
• Lastly, firms give their attorneys too much autonomy in collecting their bills. This leads to the question of whether your firm has a collection and accounts receivable management problem – or a lawyer problem – where your professionals are not taking responsibility for collecting their accounts. Yes, there are certain clients and types of transactions that do not or cannot follow prompt payment guidelines. However, these are the exception and not the rule. Law firms need to understand that these exceptions gain traction and soon become problem paying accounts as they age. On top of that, firms gain a false sense of security that they have a pot of revenue that just needs to be paid, when what they really have is an empty trove of promises that continue not to be paid (if they ever will be). 

Visit us at www.clientci.com to learn more.

In One Ear and Out the Other: When Managing Receivables, Sometimes You Hear Only What You Want to Hear

Many law firms are missing the message as it relates to managing and collecting their receivables timely. Such firms still rely – very much to their detriment – on a culture of collegiality and camaraderie among the attorneys to set the tone for meeting collection goals. 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 may experience different difficulties. For example, family law clients may be prone to cash flow problems, corporate start-ups may not have cash reserves and e-billing clients are selective about what they pay. 

So here are three things to keep in mind to help improve communication on collections:

• Firms that talk the talk but don’t walk the walk will have weaker collection results. Because many firms believe that open dialogue between management and the attorneys will ultimately result in effective collection efforts, they do not enforce guidelines to help achieve results. Individual attorney autonomy will win in the end – and collections will lose – if all the firm does is talk about, rather than act on, the message.
• Firms need to understand that it will take time to successfully implement policies and procedures before they actually spend time creating and revising collection rules. Save yourself some time by putting the cart before the horse. 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 new rules.
• Don’t think that an increase in revenue or meeting budget is 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 of more than 90 days. Such receivables are more of a challenge to collect and take more time and are often left to the side. 

Want to learn more? Visit us at www.clientci.com.

Prepare for a Challenging End to a Year Unlike Any Other

 

Jake Krocheski President jakek@clientci.com October 19, 2020   Prepare for a Challenging End to a Year Unlike Any Other     Roll up your sleeves and get started 2020 has been a rough year, unlike anything we have ever experienced.  We would venture to say that no firm has planned adequately for such hard times.  Even more challenging, if your firm has not done a good job managing its A/R in good times, how can you expect to manage them when times are tough? But no matter how difficult times are, year end is coming, just like all other years.  So take the time to get your priorities straight and determine how your firm will make changes that are needed.  Effective receivables management starts from the top.  Firm leaders should lead by example.  They need to tell the attorneys to address their collections.  Just as important, they need to understand what resources and strategies are required to help achieve results -- sooner rather than later.  Look at everything, including how your firm historically has managed its receivables at year end, to determine where changes need to be made, based on today’s down economy and different client payment patterns.  More than ever, be aware that certain problems surrounding clients’ failure to pay your firm has dealt with in the past are becoming more prevalent.  For example, clients with cash flow problems will delay payments or not pay at all, and clients can have “sticker shock” when they expect to receive a bill of a certain size and are surprised when a much larger one arrives.  Focus on areas that make a difference and don’t make assumptions Change can be difficult, especially with so many priorities to attend to during such uncertainty.  But the bottom line is the bottom line.  This year, unlike others, it requires all hands on deck to ensure that bills are in line for payment.  Therefore, start determining:

 

Whether accounts are actively being pursued at certain ageing points or if follow-up efforts are stagnating What the payment status is on accounts, what can be done to speed up the process and what the chances are of not being paid The time commitment that is necessary, skill level of those pursuing unpaid bills, how much of a priority they are devoting to the efforts, and what success they are having, especially with older accounts Why clients are not paying and what steps are being taken to get them to pay

 

Be careful that assumptions are not being made at all levels:

 

Firms assume attorneys are vigilant in getting clients to pay; Leadership assumes receivables are being actively managed; Attorneys assume clients understand payment obligations; and Everyone assumes staff assigned to accounts receivable efforts understand their duties and are actively pursuing accounts.

 

Don’t get caught in a vicious cycle.  Get to the root of the problems and find solutions. Clients are expecting to hear from you this year Remind everyone involved with year-end collection efforts that many other business partners are contacting their clients to get paid, so it is entirely reasonable for you to do the same.  Institute regular, steady, professional communication concerning unpaid bills to secure dates for when payment can be expected, or to determine appropriate follow-up. Educate your attorneys about various payment scenarios, plans and options before they contact clients.  Because clients may not be able to pay as they have in the past, be prepared to recommend a few payment solutions that can be tailored to their cash flow issues. Learn more on our web-site at https://clientci.com/

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/.

Managing Receivables: Pursue Them or Accrue Them

Moving the Ball Forward During Unpredictable Economic Times

Law firm clients may take longer to pay their legal bills because of the recent economic slide  Although you may be already seeing  changes in payment patterns, these new delays can trigger and magnify a growth trend in your firm’s ageing accounts receivable -- unless you take precautions to manage these payment situations. Act promptly and don’t lose sight of reasons clients are not paying.

Most firms are accustomed to looking at an abundance of financial information and ageing reports to evaluate their progress in managing receivables. Although some of this information may have been useful in the past, those reports may not have dug deep enough beneath the numbers to provide a complete and up-to-date progress status on payments. At minimum, you need to know:

• if an account is actively being pursued
• what the payment status is and when can you expect payment
• who is pursuing the collection efforts and whether they are getting results 
• why clients are not paying, and 
• if not, what needs to be done to get them to pay.

Also, as these difficult financial times continue, your firm needs to learn as soon as possible whether accounts have become payment problems, what the chances are that you will get paid and whether particular receivables are simply not collectible.

Do not wait for a build-up of accounts receivable over 60 or 90 days before you decide that you have a collections problem. More often than not -- and especially now -- the truth is that you had a problem much sooner - but you did not address it quickly. You can learn more on our web-site at: https://clientci.com/.

It's a Rough Road Ahead -- Are You Prepared for the Ride?

Managing Accounts Receivable in an Ever-Changing, Spiraling Economy

No one has to tell you that 2020 is going to be a tough year for every law firm. There will be numerous challenges, and collecting your accounts receivable will certainly be a priority.  With the Coronavirus pandemic now squarely affecting law firms being paid for their services, accounts receivable management will require a very hands-on approach. 

The reality is that there are a number of unsettling circumstances in today’s economy, and firms must change their approach to receivables management if they want to be successful in pursuing all accounts. If your firm has an accounts receivable management strategy, now is the time to re-evaluate that strategy – top to bottom.  If you do not have an A/R management plan – creating one needs to be a priority.

The business environment is evolving every day, mindsets are changing rapidly and so are business practices of all types. Law firms must start routinely communicating with their clients about unpaid bills to determine payment dates, resolve problems that are preventing payments and discuss payment options. 

Start instituting regular, steady, professional follow-up of unpaid bills to secure dates of when payment can be expected. By showing your clients that the firm is regularly contacting them and monitoring their payment status, they will know you are well-aware of their bills and that you expect payment – or, helping them develop a payment plan based on their cash flow needs. Also, understanding when payments are expected will help determine your follow-up dates if payment is not made.

These times are stressful for everyone, so be understanding of your clients’ own challenges. But managing accounts receivable with clients that are faced with an unexpected, on-going cash flow dilemma is a step-by-step process that must be closely monitored. 

Past collections experience should not be ignored, but firms will need to address best practices for these economic times. It is a new beginning for all of us. For more information, please visit us at https://clientci.com/.

4 Questions to Ask to Help Your Firm Get Its Arms Around Its Accounts Receivable at Year-End

Collection strategy for law firms is often a hectic experience at year-end:  from not knowing if collection efforts are being properly performed to being unsure if and when clients will pay.  Many firms find it’s easy to fall back on the approach they have used year after year at year-end -- accelerate collections during the last couple of months  – because that’s the way they have always done it.  But did this approach get the results that the firm really wanted?  Are the obstacles of collecting A/R at the end of the year becoming tougher to overcome?  Are your attorneys becoming less open to new approaches -- or turning a blind eye altogether to more productive A/R management techniques?

This big question is – will those ageing receivables that are on your A/R reports now continue to be there in 2020?

As Client Connection has noted before, the business environment has evolved: mindsets have changed, and so have business practices. Because law firms are doing business in a different world, they also need to ensure timely payment and/or address payment issues. Past collections experiences may be worth considering, but in these changing times, they may not be wholly useful as a guide.

Ask these four questions about what you did in the past -- and what you may need to change this year:

1. What role should firm leadership play at year-end? Firm leaders need to not only tell the attorneys to address collections, they must be diligent in ensuring attorneys are actually making progress. They need to establish clear expectations about what has to be accomplished with collection efforts now and through year-end. Leadership must also provide the right resources to help the attorneys and assess whether the firm has in place the right people, with the right skills, to do the right job.
2. What information should we be paying particular attention to during the last two months of the year? Detailed reports should answer key questions: whether accounts are actively being pursued, what the payment status is, who is pursuing collections and what success they are having, why clients are not paying, and what steps are being taken to get them to pay.
3. How do we proactively pursue receivables at year-end while respecting the attorneys' concerns about hurting client relationships? Educate your attorneys that many other businesses are contacting their clients for this reason, so it's entirely reasonable for your firm to do the same. Law firms lose clients by doing poor work or failing to deliver client service, not by asking clients to pay their bills.
4. How can firms overcome the backlog of older, difficult A/R to be collected by the end of December? Because older receivables require more time and skill, you had better start now. No firm should delude itself into thinking that it is going to be paid unless it proactively pursues older accounts.

Would you like to learn more? Visit us at: https://clientci.com/

The Fourth Quarter is Here. There Is No Longer Time to Wait.

Too many law firms continue to think that collecting their receivables is an easy process – all you have to do is remind clients to pay and they will.  We at Client Connection have been telling you that A/R management and collections is all a process that must be followed regularly and consistently throughout the year in order to achieve the right results.  Now we’ve reached the fourth quarter, when the rubber meets the road.  Listen to what others are saying about receivables.

Gretta Rusanow and Jeff Grossman of Citi Private Bank’s Law Firm Group recently published a report entitled “Law Firm Margins Tighten as First-Half Expenses Outgrow Revenue.”  They anticipate that “it will be a challenge for the industry to see a repeat of 2018’s strong performance in this year’s results,” but they expect 2019 to be a good year compared to earlier post-recession years. A survey of 191 firms saw revenue growth of 4.1% in the first half of 2019, but attributed that growth largely to the rise in lawyer billing rates. Soft demand, they say, has reduced revenue growth, but so has the lengthening of the collection cycle, which they report as a prolonged trend.  Changes in client bill payment behavior have been causing the collections showdown, and causal factors include e-billing systems and greater scrutiny around bill review, as well as changes in payment terms.

Citi’s report concluded that “collecting on increased inventory levels will be key.”

Separately, Thomson Reuters Peer Monitor Index reported that law firms collected 89.2% of the bills clients had agreed to pay, in the third consecutive quarter of decline. 

Said a September 19 article in Bloomberg Law, “Declining realization is a long-term trend that has a pernicious, often unspoken impact on law firm finances.”  That article concluded, “So you keep raising rates, but if you can’t bill it and you can’t collect it?  It’s ridiculous.”

At Client Connection, we want to make sure that the message comes through loud and clear:  pay attention to your accounts receivable and take action in a timely and thorough way.  Be realistic about whether your firm is underachieving in its A/R management goals and efforts.  And if your firm has developed bad habits, now is the time to overcome them. Learn more on our web-site at: https://clientci.com

Keep Looking Underneath Those Ageing Receiveable Numbers for Reasons Why Your Firm Has Not Been Paid. You May Be Surprised What You Learn!

While clear, fundamental accounts receivable management is common in most businesses, law firms are often challenged to be paid timely because there are certain clients, transactions and payment arrangements that do not or cannot follow prompt payment guidelines.  However, recognize that these are the exceptions and not the rule.  Moreover, law firms need to understand that these exceptions have the potential to gain traction and become problem paying accounts as they age.  On top of that, firms sometimes have a false sense of security that they have a heaping pot of revenue that needs to be paid, when what they really have is an empty pot of promises that continue not to be paid (if they ever will be).

Do not fool yourself into thinking that your A/R management and collection efforts can succeed until you understand which moving parts need closer attention and adjustment.   Change can be difficult, especially with so many other priorities to attend to when managing a busy law firm, but the bottom line is the bottom line.  It requires all hands on deck to ensure that bills are in line for payment --or can determine what has to be done to get them in line).  Determine:

• Whether accounts are actively being pursued at critical ageing points or follow-up efforts are stagnating
• What the payment status is, what can be done to speed up the process and what the chances are of not being paid
• The time commitment, skill level and level of motivation of those pursuing unpaid bills, and what success they are having, especially with older accounts
• Why clients are not paying, and what steps are being taken to get them to pay.

There can be a false sense of security that collection efforts are working when revenue is rising and budgets are met.  Therefore, it’s critical to take a harder look at receivables that are not being collected and how you are dealing with issues that are preventing payment -- particularly for those receivables over 90 days – that can tell a whole different story. Would you like to learn more? Please visit our web-site at https://clientci.com/

Stop Making Assumptions and Start Asking Questions About Your Firm's A/R Management Efforts

Client Connection has been helping law firms with accounts receivable management for over 23 years. So now seems to be as good a time as any to take stock on how well law firms are progressing with their accounts receivable issues and the challenges they face in making improvements.
Let’s start by going beyond false assumptions. Let’s ask questions we need to answer – because you know what happens when you assume...

Learn more.  Click here to read our recent newsletter.

Timing is Everything When It Comes to Improving Your Firm's A/R Management Efforts

The first part of the year is critical for evaluating how your firm can do better to manage and collect its receivables.  But if you wait for changes to happen to how your firm manages its A/R, you will lose time and the opportunity to start improving how your firm can add to its bottom line. 
Time is not on your side when you have unpaid receivables ageing and you don’t have a strategy for how to begin.  However, you know it needs to be done.  Henry Ford once said, “Don’t find a fault, find a remedy.”  While the year is still relatively young, we recommend you take these three steps to get started:

1. Take the lead to determine how well your firm is doing with its A/R management – At most law firms, everyone shares the responsibility for accounts receivable management – which of course, means that no one really takes full responsibility.  Take the time to assess how things have been done at your firm and ask these questions.

• How are we doing with managing our A/R?
• What do we need to be doing differently?
• Do we have the right resources to make improvements?

2. Next, understand what is going on in your firm – Have you allowed your clients too much leeway to pay at their own discretion?  Does the culture of your firm permit attorneys to go it alone in deciding how they manage their receivables (or, in too many cases, NOT manage their receivables)?  Do you have processes and administrative A/R management functions, but neglect to measure if they are succeeding in accomplishing payment?

3. As a result of your observations, educate the leadership of the firm where improvements can be made – Leadership can sometimes be at a disadvantage when trying to determine how to improve A/R management and collections since they are flying at 40,000 feet, overseeing the direction and vision of the firm and don’t have their ear to the ground assessing why the firm is under-achieving in this area.  Provide them with insight on receivables the firm is not collecting and best practice solutions to improve collection results, especially with ageing, difficult-to-collect A/R.


Law firms that address and actively work at getting results from their collection efforts early in the year will see a real payoff at the end.  For those that do not – it will be a long year.

If you are attending the ALA 2019 Annual Conference & Expo in Grapevine, Texas this month, please stop by Booth #910 to say hello.  We would be happy to answer any questions you may have about your firm’s accounts receivable management. And please feel free to visit our web-site at https://clientci.com.

Thaw Out Your Accounts Receivable Management Strategy for 2019

The great American poet, Robert Frost, once said, “You can’t get too much winter in the winter.”  That may be up for debate this winter, considering the record-setting cold temperatures in many areas of the country.  However, the cold conditions we are experiencing should not freeze our thinking about where changes need to be made to your firm’s accounts receivable management.  While your past collection efforts should not be ignored, in these changing times, it will serve your firm well to see what changes are necessary to manage your A/R in 2019.

Your collection efforts can’t succeed unless you understand which moving parts need closer attention and adjustment. Change can be difficult, especially with so many other priorities to attend to, but ageing A/R can often be difficult to deal with. The firm must take a position and have clear thinking on its A/R management efforts to ensure bills to clients are in line for payment (or what needs to be done to get them in line). To begin, start evaluating:

• Meaningful information to determine the status of payment. Financial numbers are beneficial, but the stories behind those numbers will give you a clearer picture of the progress on your collection efforts.
• Whether invoices are actively being pursued at critical ageing points. And if not, why?
• What the payment status is and what can be done to speed up the process. Promises to pay often lead to more promises -- and no results.
• The skill level of those pursuing collection efforts and what success they are having -- especially with ageing A/R.
• Why clients are not paying timely, or not at all -- and what steps are being taken to get them to pay.

There is often the misperception that a backlog of ageing receivables will turn into timely payments -- and money will roll in simply when the firm needs it to.  This faulty logic hinders your ability to maintain a healthy revenue stream.  Unless habits change, firms should not expect to increase the likelihood of getting paid as receivables age. 

Now is an excellent time to take action.  Help your firm make changes in your processes and practices to help enhance revenue by converting your backlog of A/R inventory.  Don’t freeze-up! Learn more on our web-site... https://clientci.com/

Less Talk, More Action in the Fourth Quarter

The co-founder and former CEO of Southwest Airlines, Herb Kelleher, once said, "We have a 'strategic' plan. It's called doing things." This, of course, refers to the concept of too much talk, not enough action. It's a simple statement, and does hold true: we spend too much time thinking about how we are going to do something, rather than just getting it done.

In the world of accounts receivable management, it's easy to fall back on the strategy you need at year-end to accelerate collections during the last quarter to meet your revenue goals. But don't just remember what you did. Consider how effective it was for you. Did it accomplish what the firm really wanted? Are the obstacles of collecting A/R at the end of the year becoming tougher to overcome? Are your attorneys becoming less open to new approaches to year-end collections? This leads to the question -- will those ageing receivables that are on your A/R reports now -- continue to sit there in 2019?

As Client Connection has noted before, the business environment has evolved: mindsets have changed, and so have business practices. Because law firms are doing business in a different world, they also need to ensure timely payment and/or address payment issues. Past collections experiences may be worth considering, but in these changing times, they may not be wholly useful as a guide.

Ask these four questions about what you did in the past -- and what you may need to change this year:

1. What role should firm leadership play at year-end? Firm leaders need to not only tell the attorneys to address collections, they must be diligent in ensuring attorneys are making progress. They need to establish clear expectations about what has to be accomplished with collection efforts now and through year-end. Leadership must also provide the right resources to help the attorneys and assess whether the firm has in place the right people, with the right skills, to do the right job.
2. What information should we be paying particular attention to during the last three months of the year? Detailed reports should answer key questions: whether accounts are actively being pursued, what the payment status is, who is pursuing collections and what success they are having, why clients are not paying, and what steps are being taken to get them to pay.
3. How do we proactively pursue receivables at year-end while respecting the attorneys' concerns about hurting client relationships? Educate your attorneys that many other businesses are contacting their clients for this reason, so it's entirely reasonable for your firm to do the same. Law firms lose clients by doing poor work or failing to deliver client service, not by asking clients to pay their bills.
4. How can firms overcome the backlog of older, difficult A/R to be collected by December? Because the older receivables require more time and skill, you had better start now. No firm should delude itself into thinking that it is going to be paid unless it proactively pursues older accounts.

Connect with us to discover how we can assist your law firm. Please visit our web-site at https://clientci.com.

In the Fourth Quarter, Try Less Talk and More Action

The co-founder and former CEO of Southwest Airlines, Herb Kelleher, once said, "We have a 'strategic' plan. It's called doing things." This, of course, alludes to the problem that many firms have: too much talk, not enough action. It's a simple statement, and does hold true: we often spend too much effort thinking about what we are going to do, and not enough on just getting it done.

In the world of accounts receivable management, it's easy to fall back on the strategy you need at year-end to accelerate collections during the last quarter to meet your revenue goals. But don't just remember what you did. Consider how effective it was for you in the past. Did it accomplish what the firm really wanted? Are the obstacles of collecting A/R at the end of the year becoming tougher to overcome? Are your attorneys becoming less open to new approaches to year-end collections? This leads to a question: will those ageing receivables that are on your A/R reports now continue to sit there in 2019?

The business environment has evolved: mindsets have changed, and so have business practices. Because law firms are doing business in a different world, they also need to ensure timely payment and/or address payment issues. Past collections experiences may be worth considering, but in these changing times, they may not be wholly useful as a guide.

Ask these four questions about what you did in the past -- and what may need to change this year to ensure a brighter future:

1. What role should firm leadership play at year-end? Firm leaders need to not only tell the attorneys to address collections, they must be diligent in ensuring attorneys are making progress. They need to establish clear expectations about what has to be accomplished with collection efforts now and through year-end. Leadership must also provide the right resources to help the attorneys and assess whether the firm has in place the right people, with the right skills, to do the right job.
2. To what information should we be paying particular attention during the last three months of the year? Detailed reports should answer key questions: whether accounts are actively being pursued, what the payment status is, who is pursuing collections and what success they are having, why clients are not paying, and what steps are being taken to get them to pay.
3. How do we proactively pursue receivables at year-end while respecting the attorneys' concerns about hurting client relationships? Educate your attorneys that many other businesses are contacting their clients for this reason, so it's entirely reasonable for your firm to do the same. Law firms lose clients by doing poor work or failing to deliver client service, not by asking clients to pay their bills.
4. How can firms overcome the backlog of older, difficult A/R to be collected by December? Because the older receivables require more time and skill, you had better start now. No firm should delude itself into thinking that it is going to be paid unless it proactively pursues older accounts.

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Tips for Being Productive During the Dog Days of Summer

We recently published our summer newsletter -- Dog Days of Summer? Not for Long.  It was filled with tips and ideas on how you and your firm can start improving your A/R management now to get a head start going into the last quarter of the year.

Here are a few excerpts from our newsletter:

First, take the lead to determine how well your firm is doing with its A/R management - At most law firms, everyone shares the responsibility for accounts receivable management which, of course, means that no one really takes full responsibility.  Ask these important questions:

• How are we doing with managing our ageing A/R?
• What do we need to be doing differently?
• Do we have the resources to make improvements?

Educate the leadership of the firm where improvements can be made - Leadership can be at a disadvantage when trying to determine how to Improve A/R management and collections since they are flying at 40,000 feet overseeing the direction and vision of the firm and don’t have their ear to the ground assessing why the firm is under-achieving with its A/R management. Provide them with insight on how well the attorneys and staff are performing in getting accounts paid, and discuss best practice solutions to improve collection results, especially with ageing, difficult-to-collect A/R.

Identify bills that will get paid and those that may not - Past due ageing buckets (61 to 90 days, 91 to 120 days, etc.) often don’t give you a clear understanding of the status of unpaid bills.  The numbers may be encouraging, but you need to get the story behind each receivable to determine the probability of getting paid, either within a viable time frame or, at least, by year-end.  At the very minimum, classify receivables for accounts being handled by attorneys and staff to determine:

• Is it collectible?
• If so, when can we expect payment?
• Is it problematic?
• If so, how good are the chances we will get paid?
• Is it simply uncollectible?

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Overcoming the Hurdle of Attorney Complacency

Complacency. When it comes to accounts receivable management, this is often one of the biggest challenges for law firms. While those responsible for financial management want to take a diligent approach to ensuring steady collection efforts, which are common in most businesses, they are often stymied because there are so many client payment variables, complicated transactions and relationship issues that do not lend themselves to strict procedures.

By and large, attorneys tend to make the easy collections during the course of the year. However, when there are problems, they let the receivables sit...and sit...and sit. Which is why law firms have more receivables going well over 90 days then they would want or expect.

Yes, it would be helpful to educate your attorneys on various techniques and strategies for how to best contact clients. It is still up to the attorneys to do so.  But remember: attorneys typically do not have the time or inclination to contact their clients about unpaid bills.

So where do you start?  Start small, gain momentum and report your progress.

• Prioritize your attorneys. Begin with those having the most difficulty collecting their A/R. Take the time to meet with these attorneys on a regular basis and ask them to tell you specifically when bills can be expected to be paid or what needs to be done with older receivables that are just getting older.
• Project realistic timeframes for when receivables are expected to be paid and when the attorney plans to contact clients to learn why payment has not been made. Communicate to the attorney that A/R management is a process that must be followed diligently if progress is to be made. Remind them that many clients will not pay unless they hear the firm is expecting payment.
• Report progress to the leadership of the firm and give them information to help them do their jobs. Effective receivable management starts from the top, but they must have details if they are going to hold attorneys accountable. It is often a judgment call as to how leadership chooses to deal with attorneys not managing their A/R.

For many clients, paying their legal bills does not carry the same urgency as payment to others. Payment becomes even slower when attorneys are not making A/R management a part of their daily practice management. Learn more on our web-site at https://clientci.com/