Attorneys spend a lot of time practicing law. Your clients deserve your time, attention and experience helping them reach their goals. So, what’s the problem? While you’re focusing on offering the best service possible, it’s easy to:
- Push business management to the wayside
- Allow outstanding bills to pile up
- Spend excess time on client matters outside of billing hours
It’s easy for firms to worry about handling client emergencies and push off best practices that make your firm profitable. One survey found that 30.5% of firms send invoices within 1 – 2 weeks and 28% of firms don’t send out invoices for 2 – 3 weeks.
Firms get caught up in the “hustle and bustle,” and invoices aren’t sent out promptly, leading to potential cash flow issues.
If you refocus in 2024 and follow some of the strategies that we recommend below, you’ll be well on your way to making this year more profitable than the last.
1. Reevaluate the Way You Start Client Relationships
Attorneys have ideal clients, and those who are less than ideal. Some clients simply take up too much time, balk at your prices and aren’t a good personality fit. You need to have strong client intake processes in place, and one element of this is pre-screening.
Your pre-screening process relies heavily on self-reflection and asking tough questions:
- Can your firm meet the client’s expectations?
- Did the client balk at your fees and potential expenses?
- Do you notice a potential personality mismatch?
Clients have goals that they expect you to meet, and if you fail to meet them, it can do more harm than good for your firm. It’s better to turn a client away if you know that your firm isn’t a good fit.
If you think the client may be a good fit, you’ll want to be 100% transparent on your fees and expenses. Judge if the person was taken aback by the price. If a client pushes back on cost, it may be a sign that they’re a problem client who:
- Doesn’t pay invoices
- Pays invoices late
Attorney-client relationships are all about communication. You need to break good and bad news to the person, and if you can’t do this, the relationship can quickly sour. If you don’t feel that a prospective client will appreciate your approach or that you’ll have a personality mismatch, you need to go with your gut and say “no.”
Your gut feelings about a client should never be ignored. If you have even an inkling that the person will be a problem, it’s better to focus on other clients that you really enjoy working with.
2. Level Up Your Communication
Clients who work with you have a problem in their personal or professional lives that they need you to correct. High stress and anxiety are common, and if their attorney hasn’t checked in with them or told them the results of a recent filing, you can expect random calls or emails at all hours of the day.
Your firm needs to take a proactive approach to keeping lines of communication open.
You should:
- Allow time for each client every week to reach out to them using some form of communication.
- Put systems in place to send automatic reminders to the client.
- Reach out to the client before a meeting to confirm.
Attorneys can lean on their staff to help with communication. Start the year off by clearly outlining how and when you’ll communicate with clients. If you have clear policies in place that everyone knows and agrees upon, it will save a lot of time and resources.
You can now move into money-specific strategies.
3. Money Matters – Bill Regularly
How do you bill your clients? Are you consistent, or do you find yourself constantly playing catch-up with invoices?
Adopting consistent billing practices will make 2024 a more profitable year.
Here’s why:
- If you bill clients on the first Monday of every month, they can plan their funds.
- When clients know when to expect their bill, they will be more likely to pay it in a timely manner.
Many of your clients will receive their funds at the end of the month, either from their employer or retirement. If you bill at the start of the month, funds are more likely to be available.
Cash flow is the lifeblood of your business, but it’s just as important to your clients. Consistent billing will help ensure that you get paid on time.
Consider offering auto-drafting options and using automated billing options to save time.
Consistent billing is just one piece of the puzzle if you want to make this year more profitable. Make sure that you’re also following these best practices:
- Simplify your invoices. Be clear and concise. Clients should easily understand their payment options, what they’re being billed for and how much they owe.
- Be prompt. Send all bills within 30 days of services rendered. The longer you wait, the less likely your invoice will be paid.
- Stay on top of outstanding bills. Don’t let outstanding invoices sit on the back burner. Stay in contact with clients who are late on their payments. Staying in touch will reduce the risk of non-payment.
- Know when it’s time to let go. If a client isn’t valuing your time and paying invoices in a timely manner, it may be time to part ways. Although difficult, letting go of these clients will free up time to serve clients who are happy to pay for your time and attention.
In addition to these points, make sure that your team is well-trained in handling trust accounts and IOLTA. Mishandling of trust accounts is one of the leading causes of disbarment in the U.S.
4. Make Cyber Security a Priority
Many firms overlook the importance of cyber security, but failing to follow the best practices could prove to be a costly mistake.
Make sure that:
- Trust accounts are being handled correctly. All funds (digital and physical) must be allocated to their appropriate accounts. Remember – these funds belong to the client until after the work is done. Mismanagement can lead to disbarment.
- Credit card information is not stored digitally. Any third-party billing systems that you use should maintain strict PCI compliance protocols.
- Remote teams use secure connections when handling any firm business.
- Your firm has a data breach response plan. If your system is compromised, having a plan will allow you to act quickly.
Consider investing in cyber security training, which will help your staff learn how to recognize phishing attempts and breaches before they spiral out of control.
5. Leverage Client Relationships After You Stop Working With Them
You’ve helped a client with estate planning, and you had an amazing time working with them. Service is complete. The client was very happy, but this doesn’t mean that the relationship is over.
You can ask the client to:
- Leave reviews
- Provide a testimonial
- Refer friends
Word of mouth remains a leading way for firms to drum up business.
Happy clients pay faster – often on time – and will send new clients to you. If you take the time to focus on existing clients and their pain points, you’ll end 2024 with it being your most profitable year yet.
For more information on staying profitable in 2024, contact the CPN team today.