materials prepared by cheryl betten presented by carol l. schlein newark nj february 22, 2013
TRANSCRIPT
VI. Billing, Collections, Financial Planning and Reporting
Materials Prepared by Cheryl Betten
Presented by Carol L. SchleinNewark NJ February 22, 2013
Managing Legal CostsAttorney CompensationDirect Expenses (Staff Compensation)Indirect Expenses such as
Rent and UtilitiesOffice SuppliesInformation SystemsProfessional FeesResearch and Subscriptions
Carol L. Schlein, Esq.President, Law Office Systems, [email protected] www.losinc.com
Montclair NJFounding Member Lawtopia LLC
www.lawtopia.netNational partnership of legal technology
consultantsFormer chair Computer Division,
ABA Law Practice Management SectionFormer columnist, New Jersey Law Journal
Identify Costs‘’’
Budget Your Revenue & Expenses
Calculate estimated revenue Estimated Revenue = Billable Hours *
Rate * # of TimekeepersMake sure all lawyers are meeting baseline
expectations
Track Your ExpensesNegotiate better ratesStreamline processesUse Firm Admin to manage finances
instead of practicing attorneys
Identify Money MakersBenchmarking- compare your firm to other
firms with goal of improving your own business practices
Negotiate with your vendors for the best deals
Shop around for servicesPut systems in place to track costs and bill
them out where appropriateAutomate where possible
Eliminate Money Wasters
Don’t waste money on bad advertising or a bad marketing plan
Make sure your marketing plan is focusedTurnover – “there are plenty more where that
one came from” is a bad HR strategy and will cost your firm
Don’t sign long term leases. Technology changes too fast.
Maximize 80/20 Rule20% of your clients are responsible for
majority of your revenue – make sure they are happy
20% of your employees are billing 80% of the hours – make sure they are rewarded
Learn from bothFind more lucrative clientsFind ways to motivate employees
Case BudgetingConferring with your Client
Budgets for cases often happen when lawyer least familiar with facts and players
Communicate with client when budget changes
Be Audit-MindedWork with a CPA or Accounting Firm to
ensure compliance with payroll taxes, income taxes, trust funds
Audit-minded professionals will create audit trail and ensure reliable financial reporting
Avoid problems with random auditsHave system of checks and balances
Billing and CollectionsFee/ Engagement Agreements
Outlines services your firm will performDetails Fee arrangement
Hourly/ Flat/ Contingent Retainer required? Frequency of billing Interest or late fees? Detail of billing (itemize) Types and costs for services charged Rates for each timekeeper level
No “air-tight” fee agreement but can prevent disputes
Tracking Work and Time SpentFactors to Consider in Selecting
How many timekeepers in the firm?Will they enter their own time?Do you want the system to also track
accounting?Standalone or network?What’s your budget?What other programs share similar data?
Popular Timekeeping/ Billing Programs
TimeslipsPCLawTime Matters/ Billing MattersTabs3ClioRocketMatter
Strategies for Pursuing Fees OwedBe Proactive
Start with Written fee agreementAdhere to the agreed termsFollow up within 30 days
Determine if firm will or can sever relationship
Use systematic process to demand paymentFollow collection lawsFee Arbitration process
Considerations to Sue a ClientCan your firm handle claim through the
courts?Will number of suits impact your malpractice
coverage?How much is owed? What is the risk of a retaliation law suit?Will judgment be collectable if obtained?
Outsource Your CollectionsConsider using third-party vendorDo your homework about vendor before
proceedingNegotiate the fee with collection vendor Ask for trial periodCompare pricingUnderstand difference between agency and
collection law firmAsk for detailed list of process flowChoose a company or firm that understands your
business