What's That Elephant in the Room??... It's Your Firm's Ageing A/R, Sitting There Doing Nothing

The elephant typically starts to be more noticeable at the end of the second quarter of the year when ageing receivables remain uncollected -- and the firm starts to closely monitor where it is in revenue as compared to where it wants to be by the end of the year. Time starts to creep up on every firm, but the fact remains: that elephant needs to be turned into cash. And there is no better time than halfway through the year to start. Yes -- everyone is busy, but so are your clients, who are not making it a priority to get your bills paid.

Take a step back and determine what changes need to be made considering your firm's size, culture, practice areas and management objectives. It's June. Here are three areas to work on to light a fire under your firm to improve collection efforts and A/R management:

• Analyze what is going on in your firm. Have we relied too much on clients paying at their own discretion? Does the make-up and culture of our firm permit attorneys to go it alone in how they manage their receivables? Have we built an administrative A/R management infrastructure without measuring how well it is accomplishing payments?
• Have an honest conversation with the leadership of the firm, explaining why the firm needs to do a better job managing its A/R. Recognize that you cannot entirely revamp your collection practices overnight -- but you can start making the changes that are needed now and over the next six months.
• Start having meaningful conversations about what needs to be done. Let your attorneys know what the firm is trying to accomplish and show them best practices and strategies that will help to move collections forward. Tell them the firm wants to take decisive action early in the ageing process to help combat the ageing A/R that does not get paid. Help them understand that they need to collect the A/R themselves, but also to ask for assistance sooner rather than later from the firm's A/R management team.

It is not too late to kick the elephant out of the room -- but it is waiting on you to make the first move. Want to learn more? Visit our web-site at http://www.clientci.com

It Takes a Village: Attorneys Aren't Alone in Collecting Receivables

When it comes to accounts receivable, one of the "elephants in the room" is the awkward situation that arises when attorneys believe they are the only ones who can contact their clients about their receivables. We understand that inclination, and that makes sense in the best of all worlds. But there is a problem with the idea. Many lawyers really do not like to deal with collections, nor do they want to have to deal with them. And, truth be told, many just aren't very good at it.

Attorneys have a professional relationship with their clients and are the logical people to talk to the clients. They also may have little confidence in letting others at the firm contact those clients.

Attorneys have the knowledge to talk the talk and walk the walk regarding the matter for which they have been retained by the client. However, it is important for the partners to recognize that they are not in this by themselves. They should have a team to support them, comprised of people with the appropriate communication skills and the professionalism to allow them to build strong relationships while getting bills paid. If your firm does not have such people on staff, it should retain those with experience who can provide the collection strategy that will preserve the attorney-client relationships, analyze payment problems and understand solutions that apply to different practice areas and client situations.

Inspire your attorneys to have confidence in the people on their team who will help them with collection efforts. That message can, and should, come from the top. Firm management can lead by example, demonstrating to the attorneys that it has confidence in such professionals. Learn more at http://www.clientci.com.

Keeping the Focus on A/R in the Second Quarter

Based on over 20 years of experience of accounts receivable management for the legal profession, we know that it is critical that law firms institute regular, steady, professional follow-up of unpaid bills to secure dates of when payment can be expected.  This will help guide future follow-up to increase timely payments and decrease ageing, uncollectable receivables.

As you keep your focus on A/R, consider these two questions:

We have policies and procedures for our attorneys to follow.  Why aren’t they working as well as we’d hoped?

This is a difficult dilemma for many law firms.  While your firm’s financial managers want to have strong black-and-white procedures that are common in most businesses, they are often challenged because 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 A/R 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 individual autonomy to the attorneys is often the root of a firm’s A/R problems. 

How can we best overcome the backlog of our older, difficult A/R?

These receivables must be actively pursued until they are paid or determined to be uncollectable.  But lawyers should not delude themselves into thinking that they are going to be paid without effort on the part of the firm.  There must be dedicated, consistent efforts, with status reports going to the leadership of the firm to ensure progress is being made.  Typically, firms focused their efforts on those clients that pay timely and avoid working with older accounts because they take time and are often not pleasant to deal with.  Consistent follow-up efforts are the key to making progress with these types of accounts.  Law firm are making a big mistake if they think these types of receivables will be paid without working closely with clients and letting clients know their account is being monitored.

Want to learn more? Please visit us online at: http://www.clientci.com

Start 2017 Strong!

A message from our president as we begin planning to manage A/R in 2017

Based on over 20 years of experience of accounts receivable management for the legal profession, we know that it is critical that law firms institute regular, steady, professional follow-up of unpaid bills to secure dates of when payment can be expected. This will help guide future follow-up to increase timely payments and decrease ageing, uncollectable receivables.

By showing clients that your firm is regularly contacting them and monitoring their payment status, they will learn that you are well-aware of their bills and that you expect payment.

At the beginning of the year, frequent questions we hear include:

How do we make our collection efforts a priority throughout the year (instead of waiting until the last couple of months)?

Stop tolerating "good clients" who don't pay their bills. Although waiting until year-end may work for some institutional clients, many clients require effort throughout the year. Be realistic about whether the firm is underachieving in its collections goals and has developed bad collection habits.

How should we evaluate our firm's accounts receivable management needs and strategy to ensure we are making progress?

Ask yourselves and the leadership around you – are we doing the right job, or do our processes, policies and procedures exist only on paper? All firms should take the time and effort to evaluate if they have A/R management best practices in place. The key questions to ask are:

1. Do we know how the attorneys are managing their A/R and if they are spending enough time on their collection efforts? And, realistically, are they willing to make changes?
2. Do we have the right administrative staff in place and are they doing the work that can be measured of how many dollars they are actually collecting, including the older, difficult account, versus time spent on administrative duties?
3. Do we have meaningful reports and information to help the leadership of the firm understand how well the firm is managing its A/R and decide on what changes need to be made?
4. Is the firm regularly collecting and reducing older A/R well over120 days past due?

Help your firm get off to the right start in 2017!
Lear more on our web-site at: http://www.clientci.com

Coming Down the Home Stretch for 2016: Here Are a Few Last-Minute A/R Collection Tips

Don't look now, but year-end is rapidly creeping up on you and your firm. All those questions about accounts receivable are front and center -- and take on a greater urgency as December 31 stares you in the face. Remember, do not allow your lawyers to delude themselves into thinking that they are going to be paid unless receivables are pursued. Just as important: they also must be reminded that clients are savvy -- and smarter at year-end, too -- regarding when -- and if -- they will pay.
Here are a few tips to help:

• Schedule a meeting with each attorney who needs assistance getting his or her accounts collected. Figure out what help they need, and how you can give them that help.
• Compile a list of clients who are expected to pay by year-end -- and when payments are expected. Regularly update your attorneys when collections come in, and let them know if clients pass their commitment date, so the appropriate attorney can take the necessary action.
• Give the attorneys a checklist to help ensure payments are made. This will include verifying clients have copies of all outstanding invoices. Find out if clients are closing their offices around the holidays. Provide clients with the necessary information to get their money to you, whether it is routing instructions if payment is to be sent by wire, or an overnight express mail account number for quick delivery.
• Walk the halls. Check in with attorneys on their collections progress. The fact of your visits will remind them that collections are a priority.

The holidays are never a restful time in a law office, but if you want peace of mind when that clock strikes midnight, take the time to take these steps. And don't forget, you can always learn more on our web-site at: http://www.clientci.com/

Happy Holidays and Happy New Year!

False Assumptions Law Firms Make in Managing A/R at Year End -- And How to Avoid Them

Let's be honest. Among the tasks that take lawyers away from practicing law, is there anything they want to do less than managing accounts receivable? Then why do we think they are going to enjoy it any more at year end? Yes, it is crunch time, time for all hands on deck. But let's face it -- many attorneys don't like it, many are not good at it, and many just want to avoid it altogether. 
The following are four common assumptions law firms make at year end in managing receivables -- and how to avoid them:

Assumption #1 -- Lawyers collect their bills timely and efficiently.  Actually, lawyers are concerned about servicing their clients, and not about when they are going to get paid. They have so many hours in the day and they prefer to spend it practicing law. Although managing accounts receivable should be among their year-end priorities, similar to the rest of the year, it's not. Keep the communication to the lawyers about what they should be doing constant but simple, and don't underestimate the need to provide them with ideas, techniques and strategies that will help their efforts.

Assumption #2 -- Clients understand year-end payment obligations, and all you need to do is remind them.  Seriously, you don't think it's that simple, do you? Collecting accounts is a process that must be followed very methodically and diligently if firms expect consistent results. Although waiting until the last few weeks of the year may work for a few clients that have a regular December payment history, most clients require much more vigilant efforts. If you don't spend the time routinely following up with them -- why do you think they will just pay?

Assumption #3 -- Client will call if they have a problem with your bills.  This often proves untrue. Some clients will, in fact, be quick to call if they perceive a problem. Most, however, will not -- for many reasons: they are uncomfortable talking about money, or they are confused by the bill and don't know where to begin. The most prevalent reason is -- they are either unprepared or unable to pay. So remember, the phone works both ways -- the problem will only escalate into next year if you don't have a conversation now and put it behind you.

Assumption #4 -- The most effective way to communicate with those who have not paid is through e-mail. E-mails can be erased and ignored, especially when it involves making payment. A brief telephone conversation can communicate to clients a sense of urgency concerning your need for payment, and allow you to learn quickly if there are any problems or concerns -- and what it will take to get the bill paid by December 31.

Nine weeks left in 2016. Are you kidding me??? Visit us online at http://www.clientci.com

A/R Management Software: Using It for What It Should Do, Not What You Hope It Will Do

A/R management software is not the solution to a law firm's collection problems nor is it a substitute for the consistent personal contacts, techniques and strategies needed to get bills paid. There is no getting around the fact that collections is "roll up your sleeves" work.
The right management software can support and complement your firm's efforts to collect A/R. But make no mistake: software alone is not the answer. Many firms have believed, mistakenly, that by installing collection software, their receivables problems are over. In many situations, the use of software just hides the truth: that firms are searching for the answers to how they can better collect their receivables without first honestly evaluating what they are doing wrong.
They lose sight of the fact that the software is simply a tool, though it is potentially a powerful one when used correctly.  More important is the strategy the firm adopts in using the software and the people who are using it.
What software should do is track day-to-day collection efforts -- what tasks need to be completed each day -- and provide firm leadership with real, actionable information to show that collection activity is moving forward and progress is being made on each account. The detailed reports from the software should provide information on 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. And, for firms that have a large number of client matters, it helps track the higher balances that require action.
No matter what tools or infrastructure you have in place, collections will not succeed unless your firm understands the stories behind the numbers -- the reasons that clients are not paying. Information can be a powerful tool -- but it's the people and their know-how that will get accounts paid.

Learn more on our web-site at: http://www.clientci.com/