Law Firm Cash Flow: You Should Aim for “90 in 90”


Advice on how to achieve a collection rate of 90% in 90 days.

By: Claude Ducloux
Board Certified, Civil Trial Law and Civil Appellate Law
Texas Board of Legal Specialization
Director of Education, LawPay

As a veteran of nearly 39 years of real law practice (by “real” I mean a broad general practice serving the general public, small businesses, families, and individuals in a myriad of contract, trial, and appellate matters), I know the importance of cash flow.

In my quest for financial security and success, I have perused every bar journal article, attended numerous practice management CLE’s, and varied my approach to billing and collections to see what worked.

Doing good work, of course, has been the overwhelming focus of my practice, and thankfully, I have had very few complaints in that department. But what I have learned about getting the money in the door promptly and securely has proven to be an art. I am happy to tell you that, last year, I had a billing collection rate of approximately 97%, which is far above the national average for solo-small firms. But with a broad practice, there is no single magic secret to this achievement. It is a combination of excellent communication, billing discipline, and intentional follow up.

First: Learn to interview in a way that will result in client confidence, reasonable expectations, and realistic time frames for completion of your work, as well as a realistic range of fees to get the matter completed.

Second: Always execute a fee agreement. Clients take writings more seriously than handshakes. Also, you should rarely start work until a promised retainer check clears.

Third: Have billing systems in place that allow you to record time daily and produce comprehensible bills with necessary details.

Fourth: Diligently record your time each day. You will forget tomorrow what you did yesterday. A reminder hint I use, when I can’t remember, is to check your outgoing email each day. Your email is a terrific source of clues as to what you worked on during your busy day.

Fifth: Know how to bill accurately and amicably. Use the client’s name: “Tel. call to Robert (rather than “to client”) concerning hearing.” Then review every bill for errors or double billing before putting bills in final form.

Sixth: Send out your bills at least once per month (I recommend the first business day, after most people have received a paycheck). If you don’t do this, clients believe, “Hmm.. he’s obviously so rich he doesn’t need my money.” They hate paying you 3 or 4 months after you’ve completed the legal work, so make billing a priority. Sending out late bills is a huge management error.

Seventh: Be modern! Offer to e-mail bills (more and more of my clients only want bills via e-mail), and offer clients easy payment links to a provider like LawPay. Giving clients instant hyperlinks to payment pages supercharges your collections, as the client can pay you anywhere, even on a cellphone.

Eighth: Follow up! When you are doing your bills, and you see client John Doe didn’t pay last month, immediately stop and send him a friendly email reminding him that you have not received payment and offer him the immediacy of an internet payment link. In my practice, this has worked like a charm!

Keep in Mind: The Client Satisfaction Curve

Clients are most likely to pay you immediately following the final achievement of their goals, and their interest in paying you later drops off exponentially. So, get that bill to them during that brief period that they appreciate you.

Day 0 – Case settles. Yay! Client very happy — get client the bill today!
Day 30 – If the legal fee bill arrives after a month, the client already is alarmed that it is more than the fantasy he/she hoped it would be.
Day 60 – Two months after the settlement date, the client is convinced you are deliberately overbilling, and becomes angry.
Day 90 – The client is unlikely to pay and tells anyone who will listen that they didn’t even need a lawyer and could have handled the matter on their own.

About LawPay:
Since 2005, LawPay has been the premier payment provider to the legal industry. LawPay is the trusted payment solution for over 35,000 attorneys across the United States and Canada. In addition, LawPay is endorsed by 45 state bar associations and is part of ABA’s Member Advantage program.


All opinions, advice, and experiences of guest bloggers/columnists are those of the author and do not necessarily reflect the opinions, practices or experiences of Solo Practice University®.

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