Monday, January 24, 2011
Students often don’t understand the business side of private law practice. You have to be prudent in spending money and alert in making sure your clients pay your bills. Otherwise, you go out of business. Here is some advice from the attorney-at-work blog: Spell out your billing practices in your letter of engagement. The posting also offer some tips on how to collect:
- Enter your time daily. If you don’t keep contemporaneous time records, you can lose as much as 40 percent of your potential billable inventory. Make every effort to capture all billable time. Otherwise, you are giving away your services for free.
- Bill as promptly as you can. Let a lot of time go by and your client will no longer remember how valuable your services were.
- Assign collection calls to one person. Delegate this task to someone who understands the billing process and has ready access to copies of unpaid bills.
- Use a computer-based calendar tool to track and document all conversations with clients. Whether you use a simple electronic calendar or a sophisticated CRM system, this practice will greatly increase effectiveness in collecting overdue receivables.
- Build on relationships with clients. Every document, letter or statement you send to a client is an opportunity to build your relationship. Avoid using canned form letters. Personalize client communications by jotting handwritten notations on any letters you send. This goes a long way toward building client relationships—and that goes a long way toward prompt payment.