A perplexing, yet pervasive, trend in the legal industry is the end-of-year push for collections. Law firms are willing to wait until year end to even start thinking about collections. It’s like they wake up every October and realize they need the money. It’s no secret how dangerous this is, even in good economic times. It can be hard for clients to remember the value of work done months prior and that can make them reluctant to pay. Waiting also gives leverage to clients, who know that law firms account on a cash basis and are likely to take a discount to get the account cleared.
A rare silver lining of COVID-19 is that it seems to be changing firms’ priorities and incentivizing them to collect earlier. Firms are pushing lawyers to get their time in, moving to paperless processes to reduce the time it takes to send invoices, and being more aggressive about collections. Many firms have implemented new tools such as Iridium’s Daily Insights Tracker to better track financial performance on a more frequent basis.
Many financial experts are predicting a wave of bankruptcies later this year and monies owed to law firms will get paid at cents on the dollar, if at all. Firms are wise to collect early and often, not only in these economically challenging times, but also long after the pandemic ends and the economy recovers.
If you’re interested in implementing software in your firm that can help you to better manage finances, time entry, and invoicing, we can help. With 16 products across three product families, we’re positive we have a customizable solution for your law firm. Request a demo here or call us at (610) 981-2199, we’d love to speak with you.