The Three S’s of Maintaining Cash Flow
The term, “you never really know a person until you marry them,” stands true in the attorney-client relationships. Because of this, it’s important to do your due diligence on prospective clients and to also encourage them to do the same for you! The goal is to get to TRY to get to know your client on a personal and business level so you can not only establish if you’re a good fit for each other, but also so you’re able to set in place the best collection plan as possible.
I know you’re laughing to yourself thinking, “if only it were that easy.” I’m here to tell you it is. Just because a prospective client comes into your office with a problem, doesn’t mean you have to take them on as a client. It can be a difficult thing to do, especially as a solo attorney. However, you are likely better off if you can read the signs on the wall before you write up their agreement.
With that being said, at some point in an attorney’s career, they will experience difficult clients that will result in neglected payment.
I’ve outlined a process below that can be implemented at the beginning stages of your attorney-client relationship to position yourself to maintain good cash flow and improve the quality of your client relationships.
- Determine policies and procedures, holding your staff accountable to the procedures in place. Having defined policies and procedures that are office-wide not only help prevent errors, but it also sets the tone and expectations for all client relationships.
- Outline your fee structure in a way the client will be able to understand. Review it with the client letting them know when you expect to be paid the amount, reviewing the consequences if it doesn’t happen.
- Make paying easy by sending invoices online and offering online payments.
- Encourage online payments by using incentives. For instance: offering a lower rate etc., if the client pays online.
- Document and commence a process for collections calls.
- Determine and notate your client’s schedules so you know the best times to reach them.
- Collect additional names of numbers of individuals who can be contacted, on the client’s behalf, in the event the client can’t be reached.
- If any changes are made against the previously signed agreement, issue revisions accordingly.
- Keep the line of communication open with your clients, establishing boundaries yet keeping them in the loop of any and all changes with their case, whether it’s you contacting them or your support staff.
- Honestly advise the client on their chances of winning their case, providing settlement offers and other possible resolutions.
- Submit any and all legal documents in a timely matter.
- Encourage your clients to connect to your firm’s social media platforms, allowing them to feel connected 24/7.
There is no magic wand we can wave those difficult clients to pay on time and this information will vary based on the type of case and location. However, if you’re willing to restructure some of your policies and procedures, it is very possible to build a practice that is relatively free of problem clients and maintains a strong cash flow.