better billing for lawyers
Post on 03-Aug-2015
126 Views
Preview:
TRANSCRIPT
#ClioWeb
Better Billing for Law FirmsJoshua Lenon – Clio
Janelle Benefield - Lawpay
#ClioWeb
Instructors
Joshua Lenon
• Attorney, admitted in New York• Lawyer in Residence at Clio
Janelle Benefield
• Product Development at LawPay
#ClioWeb
1. Billing Woes (5 minutes)2. Tap into Billing Data (10 minutes)3. Bill Processes (10 minutes)4. Payment Methods (15 minutes)5. Best Billing Practices (10 minutes)6. Conclusions (5 minutes)7. Questions (5 minutes)
Agenda
#ClioWeb
BILLING WOES
#ClioWeb
Billing Woes
• Firms with past due bills affect 10- 39% of client accounts.
• 45.6% say collecting on invoices 90 days past due “unlikely” or “very unlikely.”
• 71.2% offer discounts prior to invoicing
Source:.“Law.Firm.Billing.Survey,”.Business.of.Law.Blog,.08/28/2014.
#ClioWeb
43%
43%
14%
Yes,.undocumented
Yes,.undocumented
No
Source:.“Law.Firm.Billing.Survey,”.Business.of.Law.Blog,.08/28/2014.
Does Your Firm Have a Billing Process
#ClioWeb
Source:.“Law.Firm.Billing.Survey,”.Business.of.Law.Blog,.08/28/2014.
Does Your Firm Analyze Client Billing Trends?
72%
18%
10%
No
Yes
Unsure
#ClioWeb
TAPPING INTO BILLING DATA
#ClioWeb
Lock-Up
Unbilled work in progress plus debtor days
#ClioWeb
Lock-Up Data
- 1/3 UK law firms had lock-up in excess of 150 days
- Average number of lock-up days of 109 on average days
Source:.“Unlocking.lockNup.days,”.The.Law.Society.Gazette,.02/09/2012,.andNatWest.2015.Financial.Benchmarking.Report.–Law.Firms
#ClioWeb
What Data Do Lawyers Track?
• Hours• Rates• Types of Cases• Lengths of Cases• Case Resolution Outcomes• Clients’ Legal Histories• Amounts Billed• Payments Received
#ClioWeb
Ways to Generate Data
• Bills Sent
• Bills Paid
• Payment Methods
• Tracking Time
• Custom Fields
• Expenses
• Consistency
#ClioWeb
What Can Lawyers Determine?
• Financial Health of Firm• Profitability of Clients Over Time• Average Earnings Per Case by Practice Area• Profitability of Practice Areas Per Effort• Productivity of Associates• Projected Workload by Case Type
#ClioWeb
0
2
4
6
8
10
01/01/2015
Time
Time
#ClioWeb
0
200
400
600
800
1000
1200
01/01/2015 01/08/2015 02/01/2015 06/30/2015
Time
#ClioWeb
0
200
400
600
800
1000
1200
01/01/2015 01/08/2015 02/01/2015 06/30/2015
TimeCriminalCivilAdmin
#ClioWeb
#ClioWeb
#ClioWeb
Clio.com
4,500,000 matters
#ClioWeb
Monthly Billing Data
• ~115,000 bills generated in the first 3 months of 2015
• 36.5% of those bills were marked as paid on the SAME DAY– Trust Accounts Advanced Fee
Deposits– Flat Fees Upfront– Credit Card Payments
Unpaid63%
Same.Day.Paid37%
Q1'2015'Bills
#ClioWeb
Bills not paid on the same day took 22 days to close
on average.
#ClioWeb
Billing Data Conclusions
• Billing problems start months BEFORE issuing a bill.• Law firms generate lots a data around billing.–Work in Progress Reports– Accounts Receivable
• Lawyers CAN get paid quickly, but need a process.• Lack of process leads to further delays
#ClioWeb
BILLING PROCESSES
#ClioWeb
Traditional Billing Process
1. Hourly Billing2. Generate Invoice at Matter’s End3. Mail the Bill4. Sticker Shock5. Wait
#ClioWeb
Modern Billing Options
Source:.Patrick.Johansen,.CLM,.CPP,.“Patrick.on.Pricing,”.http://www.patrickonpricing.com/continuum
#ClioWeb
Alternative Fee Arrangements
• Flat Fees for entire matters– 20% of GCs require flat fees in ACC CLO 2015 Survey
• Unbundled Legal Service– 47% of solo practitioners and 43% of those in firms of 2 to 9
lawyers report providing unbundled services. 2014 ABA Legal Technology Survey Report, at IV-xii.
#ClioWeb
Client Preferred Pricing Strategies
• Transparent pricing - 37%• Guaranteed pricing - 27%• Value-based pricing - 26%• Lowest price - 10%
Source:.Altman.Weil.2014.Chief.Legal.Officer.Survey
#ClioWeb
Big Law Approach to Billing
• Regular time input• Digital bills and payment options• Frequent billing• Staff for accounting and collections• Discouraging write-offs
Source:.“Firms.Turn.to.Specialists.to.Boost.Collections,”.New.York.Law.Journal,.12/08/2014
#ClioWeb
Discounting
Discounts & write-offs rewards good and bad clients alike. <10%
10N19%
20N20%
30N39%
Late'Bills&'Discounts
Often NeverSource:.“Law.Firm.Billing.Survey,”.Business.of.Law.Blog,.08/28/2014.
#ClioWeb
Discounting
#ClioWeb
PAYMENT METHODS
Janelle BenefieldProduct Development
• 170 million cardholders• 413 million credit card accounts• More than $2.28 trillion was spent on
credit cards in 2014
CURRENT TRENDS
ProQuest; US Census Bureau; Nilson Report; ID 245385, ProQuest; US Census Bureau; Nilson Report; ID 245385, New York Fed; ID 245434
Predicted Growth of Credit Card Payments
CURRENT TRENDS
What is the catalyst to the growth
in electronic payments?
CURRENT TRENDS
ATM CARDS AND CHECKS
DEBIT CARDS
WHAT DOES THIS MEAN FOR YOUR FIRM?
PAPER OR ELECTRONIC
How are Bills Paid in Your Firm?
vs.
ONLINE PAYMENTS
1. Ensure client funds are handled correctly 2. Update client agreements 3. Verify compliance and security
THREE THINGS TO CONSIDER
Separate Earned & Unearned Fees
ENSURE CLIENT FUNDS
UPDATE CLIENT AGREEMENTS
Sample Language
• PCI stands for Payment Card Industry compliance
• Created in 2006 by card brands to reduce fraud
• Good business exercise to assess security
VERIFY COMPLIANCE AND SECURITY
PAYMENTS ASSESSMENT
• Card brands do the work for you• Quick payment turnaround with card payments
Are your clients credit-worthy?
PAYMENTS ASSESSMENT
Does your firm ever encounter past due clients?
#ClioWeb
BILLING BEST PRACTICES
#ClioWeb
Billing Best Practice #1
Walk clients through their first bill
#ClioWeb
Billing Best Practice #2
Don’t wait to send a bill.
#ClioWeb
Billing Best Practice #2
Source:.How.to.Start.and.Build.a.Law.Practice,.Jay.Foonberg
#ClioWeb
Billing Best Practice #3
Send Detailed Bills
#ClioWeb
Billing Best Practice #3
Re: F/UJohn.Doe the clientJ..Doe john doe
Source:.Aluvion Law.Firm
#ClioWeb
Billing Best Practice #3
#ClioWeb
Billing Best Practice #4
Make it easy to get paid
#ClioWeb
Billing Best Practice #5
Get paid first
#ClioWeb
Billing Best Practice #6
Don’t skip trust accounting & regulatory duties
#ClioWeb
CONCLUSIONS
#ClioWeb
Conclusions
1. Billing currently troubles many firms.2. Better billing starts before you send the bill.3. Client are seeking transparent bills; not lower bills.4. Timing matters with billing. Bill consistently &
frequently.5. Use alternative fee arrangements to avoid
collections.
#ClioWeb
QUESTIONS
#ClioWeb
Social Media: What Lawyers Need to KnowJuly 21, 2015 11:00 AM PT
http://gocl.io/socialmedia
#ClioWeb
Thank You
Joshua Lenon
joshua@clio.com
@JoshuaLenon
Linkedin.com/in/joshualenon
top related