Guest Post: By Jordan Turk, LawPay
No lawyer enjoys chasing after unpaid invoices. Unfortunately, although unpleasant, collections are part and parcel of running your own business. But you can mitigate the more unpalatable aspects of bill collecting by making a few adjustments to your client intake procedures, billing processes, payments processes, and your approach to client communication. If you adapt and are open to utilizing new ideas, you can greatly increase your firm’s receivables.
Below are seven law firm billing best practices you can adopt to hopefully get paid on time, every time.
Interview Clients Carefully and Thoroughly
Conducting a potential new client consultation is an art, but there are some easy concepts you can implement to help you avoid pitfalls down the road. The goal of the consultation (other than your retainment) should be to assess the client’s situation and give them reasonable legal advice.
To avoid future headaches down the line, you should utilize the following suggestions:
- Determine whether the client’s needs and expectations can even be realistically satisfied.
- If so, give the client a road map of what the most important next steps will be, and the issues that may arise.This sounds like a no-brainer but a huge complaint from clients post-consultation is that they do not have a real grasp as to what happens next. Consider making a flow-chart of the lifespan of a typical case (if applicable) and give it to the client during the consultation.
- Ensure the client understands the cost of the case and the law firm’s expectation of payment, discussing frankly the client’s ability to pay. This should be explicitly addressed in your fee agreement. Be sure to explain to the client that a retainer is not the cost of their case.
- Exercise your own judgment as to whether this client is credible and not a potential liability to the firm. This is easier said than done, and will mostly come with experience, but if the client’s story doesn’t make sense, or if you would be the client’s fifth attorney, alarm bells should be ringing. Trust your gut.
Bottom line: when the consultation ends and the client decides to retain you, both attorney and client should be comfortable and confident in the integrity of the other party.
Communicate During the Case
One of the single biggest complaints against lawyers in the United States is “my lawyer won’t return my call.” A good way to protect yourself from possible liability is to be in constant contact with your clients. This gives you touch points throughout your client’s case and lets you control the narrative as events progress. Plus, it is harder to defend yourself against your client if you haven’t properly papered the file. Even a simple “Hi client, just wanted to touch base with you and tell you we are still waiting on the opposing party’s responses to discovery, and they have another week before they are due. We will keep you posted and let you know as soon as they are received.” This is short, simple, and the client will be appreciative. Remember, many clients are going through the most stressful time in their life, and they start to get nervous if they do not hear from their attorney for a prolonged period of time.
Failure to communicate can not only get you in trouble with your state bar, but it also affects your client’s willingness to pay their bill. You can easily instill confidence in your client while also protecting yourself by sending frequent – even if brief – messages and updates to the client. Remember, you are, after all, a team.
Be Timely in Your Billing
Clients routinely complain that all too often, they receive bills months after the legal work is actually performed. The client at that point does not remember what you did three months ago and will thus be less likely or willing to pay you. If the work is fresh on their mind, you will find a client more willing to pay their invoice.
Endeavor to bill clients around the same day every month for internal consistency and external predictability. Even better, you should aim to have your clients receive their monthly statement around the beginning of the month, typically about 3-4 days after the first of the month.
Sending invoices around this time increases the chances that (1) the bill is likely hitting around the client’s payday, and (2) the client’s paycheck should have cleared their account by then. Further, having a set schedule helps minimize the time between when you complete the work and when you bill for it.
Additionally, be modern! Offer to email bills (more and more clients only want bills via email), and give your clients a seamless, contactless way to pay online. You should want to reduce any friction between your client and their invoice payment. Allowing them to pay online via a provider like LawPay means that your clients can pay you any time, and from anywhere.
Follow Up on Unpaid Invoices ASAP
It is exceedingly rare for 100 percent of a firm’s clientele to pay their invoices in full and on time, every single time. You need to have a plan to follow up with clients who have not paid their monthly invoice, lest you risk non-payment of the bill. Remember, the longer a bill sits unpaid, the less likely it will ever get paid.
About a week after invoices are sent out, schedule time on your calendar for a follow-up contact. Generate a list of the clients who have not paid their invoice and how much each one owes. You should then reach out to the clients directly to inquire about payment, and be sure to give them a convenient way to pay you by credit card, debit card, or eCheck to increase your chances of being paid timely.
The Takeaway
Keep in mind: it’s unlikely you’ll be able to avoid having to deal with non-paying clients. There will be instances where you make the payment process as easy and straightforward as possible, and clients still won’t pay. However, if you implement the changes above, you’ll be in a position where dealing with non-payment can be a little less painful and far less frequent.
About Jordan Turk & LawPay
Jordan Turk is a practicing attorney in Texas, and is also the Legal Content & Compliance Manager at LawPay—the leading online payments solution for the legal industry. LawPay gives firms a simple, secure way to accept client credit, debit, and eCheck payments online and through their favorite legal technology solutions, like LawBillity.
Jordan earned a B.A. in Classics, History, and Religious Studies from the University of Texas, and went on to earn her law degree from the University of Arkansas School of Law. Prior to LawPay, Jordan worked with a high-asset family law firm in Houston, Texas.
