Facing cash flow issues due to your client not coughing up the money on time? Well, you are not alone. A large number of small and medium-sized law firms report delays in payments. Often, these firms have no idea what they are doing wrong or what they can do to rectify the situation. In this post, we explore the most common reasons why law are experiencing payment delays and what could done to effectively prevent this issue which is a major cause for decreased profit margins for firms.
1. Billing Inefficiency
Your lack of billing efficiency is costing you more than just money. Eventually, you might end up losing the trust of your clients and the client themselves if you do not rectify your methods and step up your billing game. Your billing accuracy is reflective of the quality of your services and speaks volumes about your firm’s overall value for money. It is not news that billing vendors are on the prowl to detect the smallest errors present on your invoices to save their clients as much money as they can. By following inefficient billing practices and not being watchful when invoicing, your firm portrays an image of ineptitude, which is very bad for your business.
2. Improper Timekeeping
If you are not efficiently entering your time with abidance to the billing guidelines, you cannot expect your client to keep their end of the deal either. Improper timekeeping results in wrong hours being captured and vital hours being missed out (which your client might conveniently overlook), ultimately resulting in your firm losing out on money. Your lawyers might be doing a top-notch job when it comes to serving your client but if they fail to track their time with accuracy, then their efforts might as well be pointless because we all know it comes down to the $$$ at the end of the day. When you enter too much time for an activity with no regard for the guidelines, you not only present your firm as untrustworthy but also inefficient. Some of the main reasons for improper time keeping is that lawyers do not capture their time on a daily basis and they do not use a system that ensures compliance with billing guidelines.
3. Violations of the Prescribed Billing Frequency
Stick to the billing frequency mentioned in the guidelines and do not bend the deadlines at your convenience. If you show a lack of interest in getting your money, you cannot expect your client to have any urgency to pay you either. If you send them an invoice a month later, you can expect the same level of efficiency and respect for your time from them. This displays callousness towards rules on the firm’s part and we all know what that looks like. Moreover, delayed invoicing can pose further troubles for you. Neither your timekeepers nor your billing department is going to remember details about what they entered into their invoices months ago. If you cannot justify what you added to your invoice, the bill review vendors are going to have a field day making all the cuts that they want without you having any means to defend yourself.
4. Your Firm is Just Another Firm
If your client views your law firm as easily interchangeable, they might as well be on the market looking to replace you at any given opportunity. It is time to ask yourself the most important question: what exactly are you offering to your client that the other firms are not? You need to start looking at your law firm from a business perspective and work towards offering your client a unique selling point that they simply cannot trade-off for others. This way, you will be able to build value and a strong clientele who look forward to working with you. The idea is to stand out by offering something your client needs and values that other firms have not thought of before- so put on those thinking caps!
5. General Lack of Communication and Clarity
Keeping a constant line of communication open with the claim adjuster or client has many benefits including the portrayal of your law firm as a trustworthy and transparent establishment. Many times, you notice reductions on your invoices due to a lack of prior approval for billing for or performing certain activities. You know very well that this could have been avoided if your timekeepers had simply made a two-minute call to the adjuster. By forging open communication between your firm and your clients, you improve your business relationship tremendously and succeed in building a good working relationship. Also, by ensuring that your time entries are clear and not vague in any aspect, you can ensure that you avoid unnecessary reductions and subsequent back and forth disputes occurring as a result.
Ultimately, as explained in the points above, you can see that it all comes down to the small things that your firm can do to make a difference from within. The first step that any firm can take is to improve its billing efficiency by upgrading its practices. Through better time keeping and strictly abiding to the billing guidelines, you will be leaving nothing to chance and you can be sure to get paid on time. The more non-compliant entries your invoice has, the more time bill review vendors need to spend on reviewing and revising your invoices. This inevitably leads to more time spent on your attorneys’ and billing teams’ behalf as they have to dispute these reductions,
A simple way by which you can achieve maximum compliance with your billing guidelines and produce accurate invoices that suffer zero to minimal reductions is to digitalize your timekeeping and billing processes. By associating with an AI-powered platform like ALB, you can ensure that your line entries are clear, elaborate and in compliance with every aspect of the client guidelines. Moreover, the multiple features offered by the application ensures that your firm’s overall productivity increases, as a result of which you enjoy better cash flow and improved client relationships. To know more, visit www.accuratelegalbilling.com/about. You can also schedule a demo by clicking here.