As a lawyer, getting paid on time can prove more challenging than you anticipated. Many of your clients may struggle to make payments on time or may need extra grace while they deal with difficult legal periods in their lives. Unfortunately, those fees are vital to keeping your firm running effectively. If you’re struggling to get paid on time–or you simply want to get paid faster so you can grow your firm–there are several strategies, you can use to improve your clients’ responses and keep that income rolling in.
Make Payment Terms Clear
Start by making payment terms as clear as possible to your clients. Your payment terms and costs can depend on a lot of factors, from the type of law you practice to your status. For example, personal injury lawyers often accept payment on a contingency fee basis, which means they do not get paid until they win the case. Family lawyers may charge by case or based on how many hours they spend on a case.
Make sure your clients understand payment terms from the start and provide them with an estimate of the costs they can expect when they choose to use your firm for a specific legal issue. Keep clients updated on any potential changes to those payment terms: for example, if you find yourself spending more hours on the case than anticipated, or if there will be unexpected fees along the way.
In addition to laying out the cost of legal services, make sure clients understand when those bills will come due–including whether they can expect to pay when they’re done, whether they can make monthly or weekly payments as they deal with their legal concerns, or whether payment is expected on a regular basis.
Send Invoices Promptly
Don’t let invoices pile up or wait until your clients have racked up substantial bills to send out invoices. Instead, make sure that invoices go out in a timely manner. Clients cannot pay, or make arrangements to pay, if they do not know what their bills are going to look like.
Provide Information About Payment Plans
Many clients will struggle to make lump sum payments to your law firm. If you want to make sure that they pay in a timely manner, it can prove helpful to offer payment plan options. However, make sure that those payment plans fit your firm’s needs! You may, for example, require clients to make payments on a specific schedule, without missing any, to continue to receive your services.
Use the Right Tools
In many cases, using the right tools can make a big difference in your ability to get paid. With LawBillity, for example, you get several advantages. First and foremost, you can use it to track the time you spend on various clients’ tasks, which can make billing easier and more streamlined. Second, LawBillity can automate the billing process, which ensures that invoices will go out on time and that you won’t have to think about taking care of those tasks yourself.
Follow Up on Missing Payments
Once you’ve sent out an invoice, make sure that clients take care of their obligations quickly. Do not simply allow invoices to go unpaid, especially if the client does not get in touch with you. Instead, send out a reminder if the invoice goes unpaid. You may want to start with a politely worded follow-up within a week of sending out the invoice. If you struggle to get clients to pay on time, you may want to advance to other tactics, including phone calls or face-to-face meetings.
Keep a record of any communication related to missing payments. Some clients may not admit that they have heard from you or may not want to acknowledge that they knew about the payment and didn’t take care of it. By keeping up with those communications, you can more easily provide that record if you struggle to get clients to take care of their payment obligations. Stay persistent! Do not allow payments to fall by the wayside.
Stop Completing Work for Clients Who Do Not Pay
If you struggle to get clients to pay their invoices on time, stopping the work you’re doing for them can be a powerful tool. In many cases, clients may think that they’ll take care of legal payments “when they get there,” or that they can simply take care of payments all at once when it’s convenient for them. However, in the meantime, that means that you aren’t getting paid–and your firm may, as a result, struggle to pay the bills! If your clients aren’t paying their invoices, stop completing work for them until they get those vital payments caught up.
Set Policies That Work for Your Firm
Your ability to wait to get paid can depend on the size of your firm, the number of clients you have, and the capital you have available. However, chances are, you have a solid idea of when you need to receive payment for your business processes to keep moving smoothly. Set policies that work for your firm! That may include:
- Retainer fees, especially when working on a major case or working regularly with the same client
- When payments come due
- When you will stop work if payments are not made
In addition, consider when you will move forward with debt collections if invoices aren’t paid. Debt collections can help you recover some of the funds that clients should have paid more efficiently. However, you need a consistent policy so that you can keep up with your bill collections.
Get the Tools You Need to Streamline Payment Collection
At LawBillity, we offer several tools that can help streamline the payment collection process, from time tracking tools that can help you keep up with exactly how long you’ve devoted to client projects to billing software that will improve invoice collection. Start a free trial today and see for yourself how LawBillity can enhance your billing processes.
