When you don’t send bills in a timely fashion, you send your client a message that receiving prompt payment really isn’t all that important to you.
When dealing with bills with outside counsel, one of my all-time favorite fact patterns is below. It’s the classic – Palsgraf v. Long Island Railroad – of lawyer billing:
Receive snail mail bill from law firm. This bill features time entries from work occurring three to four months ago.
One day later, receive phone call from billing partner. “Mike, I’m hoping by now you’ve received our bill in the mail and …” Insert one or both of the following: “It’s approaching our fiscal year end” or “My other partners are pressuring me to collect our outstanding fees.”
When you sit on a bill, you send your client an implicit message that receiving prompt payment really isn’t all that important to you.
Said another way, if you’re sending bills out several months after you’ve done the work, how important can getting paid in a timely fashion really be?
I know this much: My other vendors are pretty concerned about being paid on time, to the extent that some of them will actually cut off my service if I’m more than 30 days behind. We’re professionals and don’t just do things like that, but you get the general idea. When a firm waits for several months to send out a bill, it’s inadvertently creating a justification for the client to take that bill and stick it on the bottom of the “pay” pile.
I remember seeing a sign posted at one of the windows at the County Clerk’s office back when I was practicing. It said something like this: “Your Poor Planning Does Not Result in My Emergency.” Same idea with your bill.
Legal Billing Rule #1: The Longer You Wait, The Less You’ll Get Paid
Legal Billing Rule #2: Clients Won’t Pay a Bill Unless They Receive One
Legal Billing Rule #3: Not Billing In A Timely Fashion Sends A Message
Legal Billing Rule #4: You’ll Poison Relationships And Scare Away Business
Legal Billing Rule #5: Don’t Cause Problems For Your Client & Screw Up Her Budget
Legal Billing Rule #6: Delaying Billing is Like Giving Away Free Money
Legal Billing Rule #7: Avoid Communication Breakdown
Legal Billing Rule #8: Predicting Your Future Income
Legal Billing Rule #9: Capture Time With Easy, Modern Tools
Legal Billing Rule #10: Beat The Procrastination Monster
Legal Billing Rule #11: Get a Bill Buddy
Legal Billing Rule #12: Standardise the Tools
Legal Billing Rule #13: Make Small Improvements Each Quarter
Legal Billing Rule #14: Rolling Out Changes and Letting Your Clients Know