A recent LexisNexis survey of small law firms reported a sad fact, in that past-due accounts are a fact of life for many lawyers, with more than 73% of respondents reporting that they frequently must encounter them.
There are ample reasons for this: client financial hardship, clients disputing the value of services, and, most notably, lawyers failing to follow up and demand money from past-due clients. This is particularly true of solo and small firm lawyers: despite the obvious impact of unpaid client balances on your bottom line, you’re too busy marketing your firm, developing your business, and, yes, even practicing law, to chase down clients who have yet to pay for services rendered. So why not utilize available legal tech, to take some of that cash off the table? Your firm’s financial health depends on it.
Mistakes when billing can erode client trust and lead to billing disputes—and can you really afford to be going back, double-checking your time entries, searching for mistakes, and re-issuing bills? Failing to track time contemporaneously can result in lost or inaccurate billable hours, and while a client may not complain that you neglected to bill them for a phone call or meeting, it can call your other billings into question. Use a mobile practice management app to track every billable second, accurately and you’ll find clients are more likely to pay.
Your failing to collect on past-due bills may have to do with not having visibility into which bills actually require collection. If you’re still using Microsoft Office to track time and issue bills, odds are you don’t have this insight. By using practice management or billing software, you can easily see which bills require follow-up and which require write-off. Your practice management solution can also provide reports that will help you identify the kinds of clients that pay their bills on time, and how those clients were acquired, allowing you to attract the clients you want.
A number of services exist to help streamline and automate your receivables process, and many of them integrate with your existing practice management or billing solution. If you’re a Clio user, you’ll want to check out both ZenCash and Invoice Sherpa, both of which seamlessly integrate with your Clio bills, identify those past-due, and automatically send follow-up reminders to your clients via email, SMS, or phone, increasing the likelihood of payment and freeing you up to focus your efforts on legal work. Solo and small firm lawyers can’t afford to neglect past-due clients and the associated cash flow; by leveraging the technology you’re already using, you can greatly reduce the pain and effort associated with non-paying clients.
Editors Update: Clio was happy to announce in November 2015 that we, and now your firm, are fully enabled to accept credit card payments from clients from directly within your Clio platform. No fuss, no wait – just streamlined, secure and instantaneous payment.
Law firm technology is changing
With the right tools, your firm can run efficiently so you can focus on what matters most. Learn more in our free guide, Why Law Firms Are Moving to the CloudGet the Guide