Digital White Papers

ILTA WHITE PAPER: NOVEMBER 2015 WWW.ILTANET.ORG 28 IS YOUR FIRM FAILING AT COLLECTIONS? EVERGREEN RETAINERS ENABLE SUCCESSFUL CLIENT MANAGEMENT Evergreen retainers are one of the best ways to bring down your receivables, and they prompt frequent and healthy communication with clients. An evergreen retainer is simple: You receive the money upfront and require regular replenishments as all invoices get paid from the evergreen retainer. This is convenient for the client, as they do not have to send a payment for every bill. However, you will want to ensure that you have the client's authorization to take money from the evergreen retainer to pay your bills. This will leave less room for disputes of your billing. YOU ARE IN THE LEGAL-ADVICE-FOR-PAY BUSINESS; YOU ARE NOT A BANK Unless it is discussed at the inception of the relationship, or at some early point during the matter, it is unreasonable to carry a nonpaying client for a lengthy period. You are not a bank to float the debt of the client. Lawyers are often surprised to find that, except in a few select circumstances, the bar does not expect you to give away your services to a nonpaying client. CLIENT RELATIONSHIPS AND COMMUNICATION ARE KEY Some firms assume client relationships exist only at the lawyer level, whereas the most successful firms with the happiest clients emphasize that those relationships also exist at other levels, including accounting. Frequent and open communication with the client through the right people in accounting leaves discussion channels open for billing and payment issues. Not only should the lawyer be in continual communication with the key client contact, but the accounting person helping the lawyer should also frequently communicate with the client's accounting office. Even if the key client contact forgets to mention problems with the bills to the lawyer, there will be information communicated from the accounting office to address any issues without delay. Adding a personal touch at several levels can make a significant difference. Seemingly small details such as remembering birthdays, family events, favorite shows or sports teams can create a favorable shift in the client's perception of the firm and its employees. This level of connection can make the difference between late and timely payments. UNDERSTAND THE DIFFERENCE BETWEEN WORK YOU BILL FOR AND CLIENT RELATIONS Clients love when a lawyer is not trying to fill their billable hours requirement at every interaction and cares enough to check in from time to time without billing for that effort. DON'T WAIT TO COLLECT While collecting sooner rather than later might not sound like the most earth-shattering advice, you would think it is a national security secret by the way most lawyers address the issue. As soon as a bill ages between 30 to 45 days, it is a good idea for you, or someone in your accounting department, to check in with the client. With most clients, the longer you wait, the more the value of your work dwindles, so get paid while the memory of your work is fresh on your client's mind. ASK, AND YE SHALL RECEIVE Don't be shy to follow up on your accounts receivable and bring it to the attention of the client. Many lawyers have a difficult time asking for payments owed to them. If you did the work and did a good job, you need to be paid for your services. Successful firms quickly determine each lawyer's skill set and comfort level with collections; if a lawyer is collection-shy, appoint someone else to do it. MAKE SURE SOMEONE MINDS THE STORE Is someone watching your book of business? The partners should be given the tools to do their jobs, and that means having someone they absolutely trust to manage payments made through their book of business. This could be a billing coordinator who knows the partner's book well or a unique individual entrusted to make decisions related to his/her book (not legal advice). Law firms can experience success if one individual for a lawyer's book of business interacts with the client, from welcoming them to the firm to checking in with them from time to time (from an administrative aspect).

• Cover