Billing and Collections Lessons from the Pandemic-Era Recession
Quick Take
- In 2020, firms staffed up in billing and collections to protect cash flow, even as they cut in other areas.
- Today, they’re layering in automation to scale those gains—without further headcount.
- Firms that treat billing and collections as a core business function outperform in any market.
Lessons From 2020
As we face a turbulent economic market once again, looking back at how law firms successfully navigated the pandemic and 2020 recession hold important lessons. From the 2021 Citi Hildebrandt Client Advisory:
“The focus on billing and collections has probably been the most common trend we have seen across the industry, and the direct impact it has had on firm revenue has been demonstrated in the positive revenue results seen this year.”
To implement these efforts, the majority of firms added staff in billing and collections—an investment that stood out against broader cost-cutting measures in areas like office space, travel, and business support. In fact, the report notes that while firms “made permanent reductions in business support staff and secretarial support,” they strengthened billing teams to ensure liquidity and profitability amid the crisis.
“We saw more rigor around billing and collections—a primary driver of revenue growth in this challenging environment,” according to Citi Hildebrandt at the time.
Tightening the Cash Conversion Cycle
The Advisory notes that in a year marked by economic contraction and market uncertainty, firms didn’t just survive—they saw revenue gains. This was not primarily due to increased demand or rate hikes. Instead, firms achieved growth by tightening the reins on the financial fundamentals. They improved realization rates, shortened the collection cycle, and implemented more disciplined billing practices.
Key tactics included:
- Daily time entry to reduce leakage.
- More frequent billing with smaller invoice amounts.
- Early intervention on past-due accounts.
- Closer communication between finance teams, attorneys, and clients.
“The heavy emphasis on collection efforts—one of the silver linings of the pandemic—has continued at pace… resulting in a 2.1% shortening of the collection cycle,” the report highlighted.
Firms who bolstered their billing departments emerged from the pandemic with stronger financials compared to those who did not place the same emphasis on this area.
A Lasting Shift in Law Firm Priorities
Three years later, the lessons remain relevant. In fact, according to more recent Client Advisories, the demand for billing and collections staff has remained high. By 2024, 81% of firms had added staff in this area over the past five years, and a majority expected to continue doing.
This shift is more than a pandemic response—it reflects a durable rebalancing of law firm priorities toward revenue operations. Rather than relying solely on origination growth or rate increases, firms are learning that cash flow discipline, paired with automation and process improvement, can unlock significant gains.
Workflow Solutions Over Manual Fixes
According to the 2023 and 2024 Citi Hildebrandt Client Advisories, firms are now focusing on operational efficiencies that improve revenue realization and reduce cost. Billing and collections workflows are a prime target, with many firms investing in:
- Reconstructive time entry
- Outside counsel guidelines compliance solutions
- Invoices-to-cash workflow automation
- Client portals for improved payment experience
Automation enables existing staff to become more strategic in the billing and collections process.
Looking Ahead
As law firms prepare for the next wave of economic volatility, the blueprint is already clear. Yes, reduce unnecessary overhead. Yes, optimize office footprints. But most critically: treat billing and collections as a core business function.
Firms are now augmenting their billing teams with workflow automation to unlock scale—delivering bills faster, accelerating A/R follow-up, and improving cash flow.
Those who do will not only weather the storm—they’ll build a more resilient, scalable firm for whatever comes next.