Profitability is not just about hours billed, it’s about the amount collected. Collecting just $0.86 per dollar is one of the biggest—if not, worst—contributors to lower law firm profitability. Firms struggle with the collection process, which makes maintaining profitability difficult. And certain obstacles are particular thorns in the side of the firm waiting to be paid.
First, accounts receivable is often the last priority for attorneys. It’s the least sexy aspect of running a law firm, and for some it is the most unpleasant. No attorney wants to chase clients for what they’re owed—those conversations are awkward and easily ignored. Casting collections to the wind can result in a drawn-out payment process, often resulting in bills going well beyond the typical 60-90 days for remittance.
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