Law Firm Cash Flow is a Four Stage Relay

Law Firm Cash Flow is a Four Stage Relay

Where we started

Automating the cash process started in the middle of the relay, in the third stage. Your time & billing system is the core, and it’s hard to remember what it was like getting bills out before the process was automated. It’s like trying to talk to my teenagers about life before the Internet.

Attention then turned to the first stage: doing a better job of tracking time. The equation is simple: being better at capturing time results in more billing going out and more cash flow coming back in.

Then, it was time for some refinement, reducing the time lapses between the work being done and getting the bills out. Many firms have used paperless proformas to let attorneys craft their edits directly, speeding up the second stage.

Time to Focus on Stage Four – Collections

All of this investment in technology and automation had made the billing process vastly more efficient. Ironically, the last step – the one that actually brings the cash in the door – is still primarily a manual process in most firms.

I don’t mean that firms aren’t utilizing A/R Reports and tracking follow-up calls (sometimes in the docketing or CRM system, or a spreadsheet). But that isn’t real automation. Most of the firms I’ve worked with the process looks like this:

  1. Bills, even when emailed, are still sent manually one by one.
  2. A/R reports are generated to identify overdue statements. Crafting the emails for follow-up is often a one-off process, including pulling up PDFs of the past due statements, summarizing the totals, and attaching them to the email.
  3. Attorneys care deeply about the communication with their clients, with the approval process adding extra delay to follow-up.
  4. Electronic payments aren’t available, or place the burden on the client, or use staff time to do over the phone (which introduces a different set of issues around security).

The whole billing process used to be full of manual steps like this. Now that we have the first three stages well automated, it’s time to tackle the last stage. It not only saves staff and attorney time, but a consistent, timely, and courteous collections process directly improves cash flow. 

Read more in Calculating Law Firm Collections ROI or learn about applying workflow and automation to the final stage of your billing process with CollectionQ

Author

Bill Bice

CEO | nQ Zebraworks
Recognized as a legal tech industry visionary, receiving Thomson’s innovator of the year award. Founder of ProLaw Software (acquired by Thomson Reuters), West km (used by 70% of the top 1000 law firms worldwide) and Exemplify (acquired by Bloomberg Law).

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