Billing Pointers That Can Improve Your Cash Flow

Lawyers enjoy practicing law. They rarely enjoying billing. Busy solos especially can find themselves struggling to get their bills out consistently month after month. One lawyer I met with recently discussed that there were a number of clients who weren’t paying their bill, month after month.

Here are some of the tips the lawyer implemented that improved cash flow.

1. Put a date on your billing statement and indicate when payment is due.

If you don’t have a due date on your bill, your client will be motivated to put your bill at the bottom of the stack of bills to be paid. Then next month, the client, repeats organizing bills to be paid by their due date. Again, your bill is moved to the bottom of the stack.

2. If your billing statement is due in 30 days of the billing statement date, consider offering a discount to your client if the bill is paid within 5 days.

People are motived by discounts! Put this to work for you. Be clever and memorable: “10 by the 10th!” Take a 10% discount if amount due is paid by the 10th.

   Age your receivables.

Do you know how old some of your accounts have been on your book? Age your receivables into these age categories:

0 – 30 days (Current)

31-45 days (Late. Call client to see if bill received and why not paid. Payment plan.)

46 days to 60 days (Collect. Contact client about terminating engagement.)

61 days to 90 days (Suspend work. Collection Agency)

91 days to 120 days (Negotiate Settlement such as 50 cents on the dollar.)

over 120 days (Write-off Debt)

Remember to apply client payments first to costs then to legal services, applying to oldest balance first. If you intend to turn your delinquent client accounts over to a collection agency, be sure to indicate this in your fee agreement signed by your client otherwise you are breaching the duty of confidentiality by disclosing this information to a third party. You should let your client know that you will terminate representation if they fall behind on paying their balance as agreed. If you come up to this point, send the client a letter with a copy of a Motion to Withdraw and indicate that you will file it payment of $xxx is not received by a set time on a set date. “Your account is 60 days past due. If 80% of the balance due is not paid by 4:00 p.m. on Aug. 29, 2014, the Motion to Withdraw will be filed with the court.”

4. Consider tracking the client balance  on the billing statement so that client realizes exactly how long you have not been paid.

Some clients are consumed with worrying about their legal problem and lose track of how far behind they have gotten with paying you. Imagine asking your clients if they would show up to work if they weren’t paid?

5. Consider dividing your client list in half and billing one half at mid-month and the other half at month-end.

Many if not all of your clients are paid on a bi-weekly basis. They likely pay their mortgage and rent payment at the first of the month. Some clients may even prefer to be billed bi-weekly. This can be especially helpful for family law clients who are struggling.

6. The easiest way to ensure cash flow is to get cash up front!

Ask for enough of a client retainer to cover the first part of the representation, but more than two months. To avoid running out of the retainer, use provision to have a set balance held in the retainer. This is called an Evergreen Retainer.

My favorite success story reported that by negotiating old client debt, money came into the firm sufficient to cover one month’s expenses! I hope that more of you will find your cash flow improving!

 

 

Posted in Billing, Client relations, Ethics | 1 Comment

A Warning About Browser Hijackers

This past week, I purchased software for my  laptop.  I elected to download the software instead of waiting for the program CD to be sent. But that wasn’t the problem. The problem was electing the option: Install Normal instead of Custom Install. Normally, you wouldn’t need to do a custom install. I never did and you, too, likely may not have customarily used Custom Install.

This is what happened and why I recommend you do Custom Install in the future.

My program installed nicely. WinZip Pro. It is a ‘reputable’ file compression program recommended by CNET. Should be fine, right? Well, the company decided to add some other things in the Normal Install.  I got a browser highjacker: My SearchDial Toolbar and start.mysearchdial.com.

“Hey! Where’s my homepage???”

I kept getting start.mysearchdial.com instead of the homepages I had set. I put start.mysearchdial.com into Google, and found out what it was and how to remove it. Thank you  blogger, Stelian Pilici for your June 1, 2013 blog post Remove Start.MySearchDial.com hijack (Removal Guide) on the blog Malware Tips Your Security Advisor. Mr. Pilici says:  “Start.MySearchDial.com is a browser hijacker, which is promoted via other downloads, and once installed it will add MySearchDial Toolbar, and change your browser homepage and search engine to Start.MySearchDial.com”

His instructions are straightforward and I quickly had it removed from both Internet Explorer and Chrome – it was attached into both browsers. The instructions are hyperlinked above for you.  Hopefully, companies like WinZip won’t continue this practice. And hopefully, CNET will post warnings about what is contained in the formerly innocuous, Normal Install. Do your friends, families, and colleagues a favor – pass the word.

 

Posted in Law Practice Management, Technology | Leave a comment

Rumpelstiltskin! What is the darn password again!

Believe it or not, the most common password is the word password. Before feeling smug about that unique password you created, think about how many sites where you have used it. Fess up; you are not alone. The aggravation of forgetting a password has led many people to use one password everywhere. The danger is that if a hacker comes upon your password and a list of your accounts, the hacker can try to enter these other accounts with the password already known. How could this happen? I will share my own experience about when my personal gmail account was hacked.

I must fess up: I used one password on all non-financial related sites. The Gmail Hacker got into my gmail account, looked around in my in box and pulled up my Facebook account email. How did I find out? The Gmail Hacker began getting emails sent to my gmail address. Discovering what had happened, I changed my gmail password to a unique strong password then tried to deal with Facebook. I contacted Facebook to report I had been hacked and wanted to insure that the Gmail Hacker would be shut down out of my Facebook account. I also changed my Facebook password to be another unique strong password. To my aggravation, I periodically get emails from Facebook addressed to the Gmail Hacker asking to return to Facebook. I delete these emails, uttering a curse upon Facebook for ignoring my report of being hacked by this person(s). My hacker did not go by the name Gmail Hacker but I do not want to add to his/her hacking ego by repeating it.

So lesson learned. Use a strong password, strong because it’s length and complexity render it difficult to breech. Many sites now have a password strength meter to check how strong this password choice is compared to safety guidelines. Current security standards show that a safe password should be a minimum 16 characters long made up of upper and lower case letters, numbers and symbols. Your safest course of action is to use a password generator otherwise human nature resorts to a pattern that a hacker could figure out. Randomness and unpredictability are qualities that will keep your password safe(r).

Jotting your list of passwords on a post it and and sticking it on your computer monitor is not a good practice at the office or even at home. There are a number of good password keeper programs or apps that are very helpful. Be sure to create a long, complex, random and unique password to access your password keeper. Google password keeper and you’ll see there are password keeper apps for iPhones, iPads, android devices, web-based, or downloadable to your laptop or desktop. Some you might want to check out include Password Keeper (www.password-keeper.net), KeePass Password Safe (www.keepass.info.com), RoboForm (www.roboform.com), LastPass (www.lastpass.com) and eWallet (www.illiumsoftware.com/eWallet/). Whichever password keeper you use, keep it safe with its own unique password.  Now get busy changing all those unsafe passwords!

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