Mo Money - avvosites.com

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Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Problems, Meet Solutions: What to do if You are Not Getting Paid . . . . . . .
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Get Paid Now: Four Convenient Law Firm Payment Options . . . . . . . . . .
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Don’t Do This: 5 Billing Mistakes Solos and Small Firms Make . . . . . . . . . .
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7 Steps to Fixing Your Legal Billing Problem . . . . . . . . . . . . . . . . . . . . . . .
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Get Paid Faster with Custom Invoices . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Make More Money by Offering Alternative Fee Arrangements . . . . . . . . . .
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Use Reporting and Analytics For Better Law Firm Collections . . . . . . . . . .
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Rocket Matter Payments: Better Billing and Bountiful Collections . . . . . . .
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About Rocket Matter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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www.rocketmatter.com www.rocketmatter.com
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Introduction
How much am I collecting each month? Is it consistently less than I invoice? Am I
billing accurately for the time I put in?
These are questions law firms struggle with every month as they review cash
flow and profitability and overall financial health of the firm.
Poor billing, invoicing, and accounts receivable practices contribute to bottlenecks
in getting paid.
In this guide, we look at common billing mistakes, solutions, and best practices;
quick and easy payment options; and how to use a practice management system
to automate the process and increase collections.
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Problems, Meet Solutions:
What to Do if You are Not Getting Paid
Nothing is worse than performing work
and not getting paid. Its frustrating and
stressful. You want to avoid litigation
which can be a lengthy process with
skyrocketing legal fees. Litigation is
also emotionally draining, causing
sleepless nights.
With that in mind, New York attorney
Fred Abramson, shares some suggestions
to avoid hassles with collecting for your work:
1. Get paid in advance. Unless my office is retained on a contingency fee basis, I
require payment up front. Moreover, I only handle contingency cases when there
is a deep pocket, such as an insurance company. You should demand payment up
front too. If you collect up front, there is nothing to collect later.
2. Put everything in writing. Even though you may be able to enforce an oral
agreement in court, a written purchase order or services agreement is much
stronger and will go a long way towards enforcing payment terms. Usually the
terms need to be crafted specifically and individually for each client.
3. Perform basic due diligence. If the matter is large enough, I would check
online courts in your state. In New York eCourts, you can simply plug in the
company’s name to see if there is any pending or outstanding litigation in New
York. Even if you are able to sue, you may not be able to collect because there
are other judgments ahead of yours.
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4. Don’t wait to bill. Recently a client called my office and wanted to sue on an
invoice that was 90 days past due. He only sent out a bill two weeks ago. His
customer’s cash flow may have changed or other bills may seem more urgent.
For this customer, your invoice is only a couple of weeks past due. I advised him
to wait 30 days. Bill your customers immediately when the work is complete or
the goods are delivered. You will find that your invoices get paid more quickly.
5. Accept payment plans. If you have tried sending past due invoices and you
are not getting a response, consider calling your customer and offering to break
their balance into two to four monthly payments. Insist that they pay the first one
right now, over the phone, as a sign of good faith. Then invoice them for the
remaining monthly installments.
6. Don’t Wait. Get on them. Once an invoice has reached 30 days past due, send
the customer a letter asking for payment. Follow that up with a phone call a week
or so later. Then send a second, more stern letter at 60 days reminding them that
you may refer the matter to collections and/or report their delinquency to a credit
bureau if they fail to respond. Follow that up with a phone call too. At 90 days,
refer the matter to collections and make sure that you or your collections agent
report the delinquency to a credit bureau (if you do a significant amount of work
on credit, it is worth joining a credit bureau reporting service such as Equifax,
Experian or TransUnion). If nothing happens within 30 days, discuss collections
litigation with your lawyer. New York limits the time in which you may sue, so
know the limitations in your state.
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Get Paid Now:
Four Convenient Law Firm Payment Options
Part of providing a superior customer
service experience is offering convenient
payment options to your clients. You
also get paid faster. Win-win. Here
are four convenient payment plans
besides paying by check that law
firms can offer clients.
LawPay – LawPay is a complete endto-end credit card processing program
built for law firms to handle the unique
requirements of an attorney-client transaction.
Whether it’s for earned fees, retainers, or advanced payments, LawPay accepts
payments from all major credit cards delivered to your bank account or trust
account. Unearned fees are separated into your IOLTA account, while earned fees
deposit to your operating account. Firms can collect payments in the office,
through their website, and on mobile devices.
QuickBooks Payments – If your firm already uses QuickBooks legal accounting
software, you can add Quickbooks Payments to your subscription. You can email
invoices right from QuickBooks account letting customers pay you instantly online
or from their mobile device. QuickBooks Payments accepts all major credit cards
and bank transfers and updates your firm account automatically when your
invoice is paid.
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Rocket Matter Payments – Secured by a deep relationship with payment
processor TouchSuite™ which offers the most competitive rates and a very simple
onboarding process, Rocket Matter Payments is a fully integrated payment
processing system with Rocket Matter legal practice management software that
helps simplify and automate the process of invoicing your clients and getting
paid. With the click of a mouse, Rocket Matter Payments will generate an invoice,
send it to your client via email, and include a link to a private payment page. Your
clients can pay their invoices quickly, easily, and securely, by credit card and
directly through their bank.
Payments are automatically recorded in Rocket Matter ledger and can be applied
to either trust or operating accounts and you’ll be able to confirm that your client
has received and opened their invoice. If you use Quickbooks Online with your
Rocket Matter account, payments are seamlessly integrated.
PayPal – If your clients have made payments online they’ve probably used the
popular PayPal which allows clients to pay right on your website using their debit
or credit card or PayPal account. In addition to accepting payments you can send
customizable online invoices to clients.
Each of these payment plans charge a fee per transaction and/or monthly fees,
so shop around. If you’re already collecting credit cards, Rocket Matter
Payments will match or beat your current fees.
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Don’t Do This:
5 Billing Mistakes Solos and Small Firms Make
Lori Gonzalez, President of the The RayNa
Corporation, a legal billing and consulting
company which assists law firms and solo
attorneys with billing and efficiency, shares her
experience and imparts some wisdom:
When asked if billing is important, most
attorneys would readily agree, but it is one of
the least prioritized tasks in many small firms
and solo practices. The processes and procedures
that are put in place regarding billing, however, are proof of the old cliché
“actions speak louder than words.” You might not be doing all five of these things
wrong – but I bet you are doing at least two!
1. Delegating billing to staff – On the surface this seems like a great use of your
time. Take a non-billable task and delegate it to staff. The reality of this practice is
that the staff member who “inherits” billing is often the newest, least trained or
only staff member. Staff might understand the premise, but lack the knowledge,
education and training to do it properly. While they can enter data in whatever
system you tell them to – understanding how to bill effectively, efficiently and
consistently is not a skill you are born with. Attorneys must maintain both
awareness and control over monthly billing to ensure clients are receiving
accurate billings.
2. Billing inconsistently – Attorney’s fees are not a regular occurrence for most
of your clients. They are a large, burdensome expense that requires budgeting
for most clients. Holding billing until you have time to handle it means your
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clients are receiving large bills that they then must somehow find a way to pay.
Billing monthly – every month – allows all of your clients to properly budget your
fees so that they can pay your bills on time. It also allows you to maintain control
over whether you have the right client base (or whether you are just a pro bono
attorney in disguise).
3. Not showing evidence of discounts and unbilled time – All attorneys provide
items at no cost, discount time or write off substantial portions of their time. Most
fail to show all of these bill reductions to their clients. Clients cannot appreciate
how much time you’ve spent, or how much value you’ve provided if you fail to
show them. Clients will also be less likely to ask for large bill reductions if they
see you have already provided a reduction.
4. Not utilizing current technology for billing – My favorite saying when it
comes to the legal field and technology? – A penny saved that costs you an hour
of time is a net loss of $149.99. Many small firms and solo attorneys don’t think
they can or should pay for billing programs. The reality of creating bills from
word processing programs is that it takes much, much longer. There is a better
tool for all your billing needs now. Additionally, your struggles with billing are real
– and have been solved in many ways, with many currently available options.
Don’t recreate the wheel to save a penny – unless you drive a horse and buggy to
save on fuel!
5. Recreating time instead of keeping time – Recreating time is simply one of
the most time-consuming, horrific memories I have of working in small firms.
Going through mountains of emails, documents, files, calendar entries and to-do
lists all to try to find that “lost” time sucked hours and hours of my work life
away. Learning a new system and finding a way to keep your time every day
takes both dedication and time. But that time is well spent and is much less than
recreating time which is too often a regular part of the “billing” process.
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7 Steps to Fixing Your Legal Billing Problem
Attorney Mike Moore identifies common legal billing
problems and how to fix them.
Instead of immediately trying to get your
firm to top-level billing proficiency,
concentrate on advancing one level at a
time. Establishing good practices takes
time, and the following steps will propel
you up the ladder as you continue to
improve. The important thing is not to be
intimidated or discouraged: keep at it.
Step One: Passively Collect Your Time
Let’s face it. Tracking time and billing is a royal pain. The only way we’ve found to
embrace this habit is to use a system that allows you to passively bill as you do
your work. Time capture needs to be presented to you as you upload documents,
work with emails, complete to-do’s, attend events on your calendar, or go about
your other daily activities.
The idea of filling out a time sheet at the end of the day, electronically or not,
doesn’t cut it: you and your staff will simply miss oodles of time. The work needs
to be tracked while you do it. Systems like Rocket Matter can help you collect
billable time as you work without having to revisit your day. Other systems like
Chrometa are busy in the background and track the computer time you spend
working on everything.
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If you are primarily a flat fee or contingency firm, not tracking time means not
running your business efficiently. Only through proper time capture can you
determine the true value of your cases and if you’re getting a decent return on
your investment.
Step Two: Find a Tool to Make Billing Easy
It’s one thing to collect for your time, it’s an entirely different task altogether to
get bills out the door. You need to find a frictionless way to generate invoices for
your customers that is accurate, clean, informative, attractive, and timely.
Delaying your invoicing creates a significant negative impact on your firm.
Here’s a quick self-evaluation: if you’re employing a system where generating a
single invoice takes more than a few seconds, or you cannot generate bills firmwide within minutes, you are using an inefficient system. Software exists,
including Rocket Matter that provides this kind of streamlined functionality.
Step Three: Create a Billing Checklist
They seem trivially simple, but checklists keep you from making mistakes the
same way they help pilots and mechanics prevent planes from falling out of the
sky. Pioneered as a system in aviation, the humble checklist is one of your most
powerful allies in taking command of your work processes, including billing.
Once you nail down your invoice generation process, write down the steps. This
list becomes your checklist. Run through your new checklist with someone who
hasn’t used the system before and see if he or she can follow along. If you
missed a critical step you can remove it, or if you added an obvious step you can
trim the list down. This process is especially important for recording payments,
since most firms need to pay careful attention to how they manage their trust and
escrow accounts.
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When you create a checklist, you create a repeatable process that’s learnable and
efficient, and prevents error. You can easily train new staff as you bring in
additional people, increasing efficiency and minimizing painful learning processes.
You also defang workplace administrative bullies, who use their obfuscated
knowledge of processes for control and politics.
Step Four: Pick the Same Day Every Month to do Your Invoicing
Billing on a regular monthly basis ensures that you bill your clients in close
proximity to the work performed.
Blocking off dedicated calendar space on the first or fifteenth of every month to
go through your invoicing is an efficient time-management technique. The team
knows it’s coming and can prepare for it, making sure nothing interferes, and the
bills are over and done with. Establishing a rhythm for your clients is critical as
well: business clients who receive regular invoices are conditioned to pay them
automatically. Folks in the business world like regularity and certainty. They hate
surprises.
Step Five: Create a Billing Dashboard
Now you’re at the point where you can spot fundamentals for your firm billing. If
the staff in your firm is passively collecting billable time, regularly generating
invoices, and recording payments, you have almost everything you need to
surface critical billing information in an easily visible, central location. For
example, with the right system, you can now easily see:
✓ How much work you’ve done that hasn’t been invoiced.
✓ How much money you’ve billed that hasn’t been collected.
✓ How much money is available for withdrawal from your trust account.
✓ Dashboards are key. They’re easy to understand – there is no interpretation
needed, the data they present are simple and straightforward so you know
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exactly what you’re dealing with. They also tell you whether the data is
suggesting good or bad law firm performance.
Step Six: Run Billing Reports to Formulate Your Strategy
Once you see that billing dashboard, you’re going to want to dive deeper into
your numbers. An ongoing study of your numbers is going to tell you what you’re
doing well and what you need to improve. A billing system with proper reports
help you discover who your top performers are, who your core performers are,
and frankly, who needs to go elsewhere, all with data-backed certainty. You can
also learn which matters are more profitable than others, which clients pay more
quickly than others, and other critical items related to your billing.
Data allows you to make decisions based on evidence. It can drive strategy: for
example, you might hypothesize that adding an associate to focus on bankruptcy
might augment your consumer-facing family law practice. Whether or not this
move pays off, can be determined with your time and billing records.
It’s worth mentioning that if you are a flat fee or contingency billing firm, it’s
worth the discipline to passively capture time so that you can determine the value
of your cases. With time data, you can see your ROI (return on investment) for
matters of different types. More importantly, the historic value of your cases can
now inform pricing decisions for alternative fee arrangements.
Without billing reports, your pricing is a dart thrown while wearing a blindfold
standing in a rocking boat.
Step Seven: Predict your Future Income with Your Billing Data
For sure, there are elements of a lawyer’s cash forecast that are very difficult to
accurately gauge. The most frequently cited example: Who knows when that new
business will come in the door?
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However, there are plenty of elements of your cash flow that can be, for the most
part, largely predictable. And all those predictions, in turn, flow from the most
important, controllable piece: getting your bill out on time.
Looking at your current client base and workflow and assigning reasonable
estimates to when you think you’ll perform pending billable work (by mining
things like your current task list, calendar, litigation scheduling orders, corporate
filing deadlines, and so forth), you can get a decent sense, without much work, of
how much you’ll be billing and at what time.
Getting those bills out on time will start the clock for payment, and when those
bills go out, is something that ought be highly predictable.
Before you start projecting your cash flow, you need to know the types of cases
you work with and what they’re worth. You’ll need to understand historically
what your caseload trend is like. You’ll have to decide if you’re going to pursue
different opportunities, more opportunities, or a different distribution of case-load
to achieve your goals.
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Get Paid Faster with Custom Invoices
As an attorney, you have your own personal brand.
Everything from your business card to your
website, to the way you dress and speak to others
says something about you. Every moment of
exposure you have with clients is an opportunity
to reinforce your brand. So why would you send
out ugly invoices?
You might think, “Why should I care what my
invoices look like? All I care about is whether or
not my clients pay them.” DON’T LET THIS BE YOU.
The invoices you send out to clients are as much a part of your personal brand
as your logo. If you think about it, the invoice is what the client takes home. It’s all
they have to remind them of the kind of attorney you are when they’re not sitting
in front of you. Why leave them with something that’s ugly and sloppy?
The last thing you want to do is come off confused and disorganized, or even
worse, cheap! Cookie cutter invoices make you look pedestrian and
inexperienced. Is that how you want to come off to clients?
Still not convinced? How about this little diddy: did you know that well thoughtout invoices are more likely to get paid than ugly and confusing ones?
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So you see the importance of an impeccable invoice, but you still might have
concerns over how to produce such documents and how long they might take to
create.
Fear not! Rocket Matter, the popular practice management software, gives its
users the ability to create custom invoices quickly and easily, complete with your
firm’s branding and style. Add your logo, change fonts and colors, and make it
your own.
Do you work in multiple practice areas and need different invoices for each case?
No problem. Rocket Matter allows you to create and save multiple invoices and
apply specific templates to certain matters. How marvelous!
You can choose from one of six beautiful pre-formatted templates as your
starting point, or you can create your own in Microsoft Word and upload it to the
Rocket Matter program. Since your templates are integrated into the software,
your invoices will always reflect your most up-to-date billing activity. It’s like
“set-it-and-forget-it” when it comes to invoicing.
It’s never too late to give your invoices a facelift. Create your templates and have
them handy whenever they’re needed. Your clients will appreciate it, and in turn
you’ll appreciate getting paid promptly.
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Make More Money by Offering
Alternative Fee Arrangements
Billing by the hour, especially for minute
and insignificant tasks, can result in
larger-than-expected client bills. This
leads to unhappy clients, and unhappy
clients are less than likely to pay on
time, and more likely to ask for
discounts.
If you’ve ever had a billing dispute with
a client, then you know that these kinds
of altercations are one of the top causes of poor clientattorney relationships (surprise!). Blame is often placed on the client for not
understanding their particular situation and any billing discrepancies.
So how can this be remedied? Offer Alternative Fee Arrangements.
While hourly billing has been the standard fee structure for performing legal
services and will no doubt continue to be a primary billing option, clients are
increasingly demanding Alternative Fee Arrangements (AFAs). In fact, AFAs have
soared to an all-time high. By offering AFAs and having clear communication, law
firms reduce the risk of possible fee and/or billing disputes. Catering more to a
client’s needs will also lead to higher client satisfaction as well as create more
opportunities for revenue growth through repeat customers or referrals.
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Also, think about this: the less time it takes for you to complete a task under an
hourly billing strategy, the less money you make. You’re being penalized for
efficiency! Try employing a Contingency Fee or Success Fee structure, which
ultimately rewards attorneys for swiftness and proficiency.
Retainer fees are also a great way to guarantee payment, since clients need to
provide a down payment up front in order to secure legal services. Fixed and/or
flat fees can also reduce billing disputes since they are so simple and straightforward.
While shifting your mindset away from hourly billing may seem daunting and
unsettling, it’s been shown that clients prefer the predictability of AFAs. Offering
these payment options can help to bring in clients that would have otherwise
gone with other firms. They may not make sense for every case, but as long as
you do your homework, AFAs can lead to great financial success for both the firm
and the client.
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Use Reporting and Analytics For Better
Law Firm Collections
Knowing exactly what you should be focusing
on to start driving your firm’s payments and
collections saves time and effort. And
following a precise trail of data closely
over time can help you stay on top of your
firm’s top and bottom-line revenues.
According to the most recent Georgetown
Law Survey, collection realization rates are
continuing to fall steadily in law firms. They’re currently averaging a low of
around 83%. So, what should you stay focused on to help boost collection and
revenue performance? To start with, increase the visibility of your firm’s
collections-related data. Then, learn to identify any red flags that may be hidden
in that information.
A good practice management platform will help give you the financial reports you
need with just a few clicks. Begin by benchmarking your firm’s current status.
Knowing where you are before identifying issues and fine-tuning your focus will
help you measure improvement over time. To start on the path to better financial
awareness that will result in improved collections, here are three items you
should be tracking closely each month:
Allocation: Which Timekeepers are Bringing in the Payments
Whose clients are paying their bills promptly? How much are they bringing in
each month? Which timekeepers are lagging in collections? If you aren’t taking a
moment to survey the landscape, you are missing out on which timekeepers and
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clients are really driving your billing and collections. Focus on identifying and
rewarding your most productive employees.
Billing Realization Rate
You can’t generate payments if you’re not capturing your time and billing
properly. Your billing realization rate is the percentage of time worked that
actually got billed to a client. This is very useful for tracking discounts and writeoffs, or how good your timekeeping habits are. Knowing what you are actually
billing each week or each month versus what you should be can help identify red
flags quickly.
Collections Realization Rate
Your collections realization rate is the percentage of revenue you actually collect
versus the revenue you generate. Analyzing this rate can help point out, for
example, whether you’re utilizing deposits and retainers effectively, billing and
invoicing in a timely manner, or whether you need to start selecting better clients
in the future. If your firm is not at 90% or above on this figure, consider taking a
deeper dive into your revenue generating practices.
Starting your journey with an enhanced awareness of these three practices will
help you begin to identify additional opportunities to improve your profitability.
The key is to benchmark where you are right now and to use the information to
spot gaps and performance issues at your firm.
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Rocket Matter Payments: Better Billing and
Bountiful Collections
The solutions to the problems discussed above
can be automated with a legal practice
management system like Rocket Matter.
It gives you total confidence in the amount
of time you’re billing each month and
provides easy payment options for your
clients. It lets you take control of your
business from intake to collections.
Rocket Matter Payments is the final step in that process.
Rocket Matter Payments is a fully integrated payment processing system that
helps simplify and automate the difficult process of invoicing your clients and
getting paid. It improves your cash flow without which you simply can't serve
your clients. With Rocket Matter Payments, collecting your invoices is now as simple as
sending them out. Firms can now accept credit cards and direct payments
through e-Check, which means you get paid a lot faster. And if you’re already
collecting credit cards, Rocket Matter Payments will match or beat your current
fees. Plus, your money will hit your bank account faster than it does through
your current processor. Rather than having to send traditional invoices by mail, Rocket Matter Payments
allows you to deliver your invoices instantly and securely over email. Your clients
see the invoice, click on a link, and boom – you get paid. www.rocketmatter.com www.rocketmatter.com
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About Rocket Matter
Rocket Matter is a leading cloud-based practice management and legal billing
application for small to mid-sized law firms. Our aim is to help law firms run a
better business by being more efficient, productive, and ultimately more
profitable. The powerful, intuitive interface allows lawyers to measure their firm’s
performance, organize matters, communicate with clients, quickly capture time,
and makes billing and invoicing a breeze.
Trusted by thousands of law firms, Rocket Matter integrates with popular
applications that attorneys use like Evernote, Dropbox, Outlook, Gmail, and more.
Attorneys can manage their office on the go with a robust iPad edition, and native
iPhone and Android apps.
Please enjoy this guide and become part of our cutting-edge community on
Facebook, Twitter, and Legal Productivity blog.

Mo Money - avvosites.com

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