Over the past six years we’ve worked with thousands of law firms. These firms vary widely in terms of size, practice area, and geographic location. And while firms, just like lawyers, often have their own unique personalities, goals, and challenges, there is still one single thread that ties all of these firms together.
We’ve found one single element to be the biggest difference between a successful firm and an unsuccessful firm, regardless of which particular metrics you choose to define each of those terms. Whether you evaluate success by financial success, client satisfaction, or lawyer happiness, the firms we see at the top of those categories are virtually always firms who deploy efficient time and billing practices.
By efficient, we don’t just mean having a system that results in regularly getting accurate bills out the door and collected. We mean time and billing practices that: (a) do not take an inordinate amount of time to successfully deploy; and (b) generate information that can help the firm project revenues, understand margins, and identify opportunities for growth.
How Bad is Your Billing Problem?
Ask yourself a few questions:
- About what time is it right now?
- About what temperature is it in your office?
- About how many miles are on your car?
Most folks can rattle off immediate, substantially accurate answers to those questions. Better yet, they can do so with very little, if any, effort.
Now, instead, see how easily you can answer these questions:
- About how much work have you done that’s waiting to be invoiced right now?
- About how much are you projected to bill next month?
- About how much of your total accounts receivable is >30 days past due?, >60 days past due?, >90 days past due?
For most, answering those questions isn’t nearly as easy. But the answers to these questions are fundamentally, extraordinarily important things for a law firm to know and understand. Each answer can have a direct, and often immediate, impact on how the firm operates.
Wouldn’t it be great if you could answer the second set of questions as easily as the first? It’s possible, and it can make a monumental difference in your practice and your life.
The following post is the first in a six-part series on legal billing excerpted from our white paper, Houston, We Have a Billing Problem.