bills out money in: best tips for getting paid for the work you do

Bills Out; Money InIndiana State Bar Association

Solo Small Firm Conference 2015

PresentersPeggy Gruenke

Accidentally

Successful?

Are You….

• Know the sources from where your clients originate

• Know WHY your clients hire you

• Where the time goes• Know the sources of

your income• Know what you’re

spending• Concentrate on

improving revenue

To learn how to be better lawyers

To learn how to be better business owners

Support your local bar association’s events

Law Firms are Simple Businesses

Forbes article in 2014, law firms ranked 2nd as profitable business model

Average profit margin – 17.8%

Low operating costs

Predictable expenses

Increased focus on efficiency and tech

Financial health dependent on 4 simple concepts:

1. Getting the work2. Doing the work3. Getting paid for the work4. Repeat

Steady flow

1.Your current bank balance2.Your current past due invoices

amount3.Your Trust balance

4.And the name of one client to fire!

Write down these numbers:

How much larger could that bank balance be and how much smaller could the past due balance be if you made these changes….

Some Billing Tips

Enter Your Time

Use Software MADE for LawyersPick One and Stick With It

Bill Every Month – even Twice a Month

Nothing is free that costs you your time.

Manage Your Client and Expectations

21

Get it in Writing

Clearly identify terms of engagem

ent

Ask how you are doing

Ask for feedback as matter progresse

s

Don’t annoy your

clients

Return phone

calls and emails

Send them

copies of important document

s

Document, Document, Document

Record advice or

instructions that involve significant

issues or outcomes

Memorialized

communications help confirm

what was said or done

Communication

22

Manage Expectations

Not just at start but

throughout matter:Discuss

outcomes, how long,

fees, expenses

Meet or Beat Deadlines

Set realistic deadlines;

Under promise, over

deliver; Don’t

procrastinate

Get the $ Up Front

Get a retainer and replenish it.

Stop Work if No Payments

Management

Build a Roadmap of the Case

The one “technology” your clients really wish you’d get better

at using is the telephone. Call them back!

Get Retainers and Get Them Replenished.

Make Bills Easy to Read

Value (Task) Bill

Charge Interest

If your clients stop paying you, don’t ignore them. Fire

them.

Clip a picture of your kids to the top of your stack of invoices

Write-offs are not discounts

Bonus Tip. Take Credit Cards

Flat Fees and Law Firm EconomicsDo They Benefit Your Clients?

• It’s predictable• It’s transparent• Shared risk• It builds trust• It simplifies the “getting

paid” process• Focus shifts to workflow

and execution

Are Flat Fees Right for Your Firm?

Will flat fees improve profits?

Do they expose you to a new set of desirable clients?

Do you have the marketing platform for your flat fee services?

Do you have the right metrics in place to measure the financial performance of flat fee cases?

What Do You Measure?

Exam historical data• Billing data• Collections history• Number of flat fee cases• Cost per flat fee matter• Revenue per flat fee matter• Practice areas used • Indirect impact – flat fee

clients who engage firm for additional services

Reporting

Simple Dashboard ReportSimple Dashboard Report

In the State/Provincial Bar We TRUST

Monies in trust not your asset

Follow the rules

Available is NOT Cleared

Retainer concepts

Make your CPA understand

Make your BANK understand

B

Thinking like a lawyer doesn’t pay the bills. Thinking

like a business person does.

Key Metrics You May Measure

Hours Entered vs. Billed

Discounts

Write-offs

Expenses

Realization Rates

Reports for Your Firm

Cash in the bankAmount billed each monthAccounts PayableAccounts ReceivableWork-in-ProgressHow much time was written down/off

B

ConclusionTime is inventory - don’t ignore it

Concentrate on building revenue

Know the sources of your business

Bill regularly, consider value billing

Don’t work for free

Understand your finances

Review your budget

What will you change when you get back to the office?

Thank you!Peggy Gruenke

pgruenke@legalbizsuccess.com.com

Me - @peggygruenke http://www.linkedin.com/in/peggygruenke