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Solo In Chicago

...empowering the Second City's entrepreneurial legal community

Monday, October 09, 2006

Accounts (not?) receivable

Four quick tips from a recent CLE I attended regarding, 4 Reasons Clients Don't Pay Bills!

1. They don't have the money. What is your intake process and is it diligent enough? Are you saying NO to potential clients when appropriate?

2. Clients don't realize they owe you. This is really about your billing system, proper review and follow-up. I have buddy in suburban Chicago at a small firm who says they don't send out monthly bills...just astonishing. Depending on your staffing levels, I think a person in-house or contacted out has to be reminding clients about unpaid bills regularly. Just make this simple change in our collection procedures has greatly helped payment receipts. My person is contracted out and she just makes regular biweekly or so follow-up calls...it's been a great help. Contact me if you need a referral.

3. Clients' slow cash flow. See #2, often times the squeky wheel gets the most oil (or cash).

4. They don't want to pay. This is often due to a bad result. There are many facets to consider on this point...should you sue, ect. Issue one might be managing expectations up front. You can usually tell the unrealistic clients at an initial meeting. Also, get an appropriate retainer.


At 6:00 PM, Blogger RJon@HowToMakeItRain.com said...

I agree with all of the points you made above. I'd like to elaborate on one of them however...

With a proper client intake procedure, monthly case reviews, some very basic budgeting skills and by using your trust account as the management tool it was designed to be, you don't have to deal with a/r issues AT ALL in a law firm.

If there's interest in further elaboration I'll be happy to do so.

In the meantime, you can learn more about how to use your trust account by checking out a beta test version of a program entitled "A Simple System For Managing Your Trust Account That Won't Make You Feel Like A Schmuck" It's about an hour long and you can see it for FREE on my website at www.HowToMakeItRain.com

If you see it, please let me know what you think so we can finish the beta test & make improvements. And be sure to let me know you came from Peter's blog.




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