publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/231030
TOP 10 YEAR-END COLLECTION TIPS FOR FIRMS BIG AND SMALL 3. REALIZE THE REAL GOAL OF THE YEAR-END. 4. CREATE A SENSE OF URGENCY. What is the actual goal of the year-end collection push? If you answered, "to bill and collect as much as possible by the last day," you are only partially correct. The actual goal is to manage the inventory and the business relationships in a manner that results in the best possible revenue position by the end of the fiscal year. Sometimes a payment for payment's sake, just because it happens in this certain time frame, might not be in the best interest of the firm and the client relationship. In the legal industry, clients pay close attention to what law firms do and what they don't do. For example, not following up regarding payment as soon as it is past due could lead to unwanted behavior by clients. Waiting sends the message that the firm is not concerned about getting paid in a timely manner, despite the firm's official payment terms. Even more disheartening is offering a discount to a client who has a larger outstanding balance to encourage payment by year-end. If done too frequently, it establishes a precedence which can lead to unhealthy behaviors. Tread carefully here — your actions could negatively affect future client behavior. During the push, things should not be business as usual, and no one in the firm should be under the illusion that it is. At this time of year, the firm should ask everyone to step up to the plate and bring their "A game" to the table. Communicating the message in many different venues — in one-on-one meetings as well as meetings for partners, departments and practice groups, in telephone calls and via email — helps create a sense of urgency. A flurry of activity by billing and collection staff, using working days instead of calendar days remaining before year-end, encouraging expedited payment options, and persistent follow up with billing attorneys and clients are all effective tools to further a sense of urgency. Complacency and failure to abide by firm policies that affect time entry, billing and collections should not be tolerated. Those policies should be enforced, and individuals who fail to comply with those policies need to be addressed. 5. PROVIDE YOUR ATTORNEYS WITH ALL THE TOOLS AND RESOURCES THEY NEED TO SUCCEED. Throughout the push, reporting is critical. Early on, billing attorneys should receive reports of their progress weekly, preferably Monday mornings during working hours. As the push progresses, and certainly within the last two weeks of the fiscal year-end, reports of their progress should be distributed daily. At minimum, the reports should include current A/R with an aging table, unapplied credits, amount in trust, commitment amount, committed amount collected, remaining amount to collect, and last payment amount and date. Reports should be available at the client, matter and invoice levels. Some firms use graphs to enhance progress reports while others use images that show levels. The more flexible and creative the reports, the more interest they receive. Interest spurs action — and action spurs results. Copies of invoices and reminder statements should be provided quickly upon request and in the form desired (hard copy or PDF). A turnaround time of two hours or less should be the objective.