Using Legal Practice Management Strategies for Improved Cash Flow
I was talking with a principal of a Melbourne legal practice today and he told me about a number of legal practice management strategies that he has adopted that have dramatically improved cash flow his small legal practice .
The strategies all came from the recent “Success Secrets of a Successful Small Law Firm” webinar interview with Graeme Todd of GTodd Law . It just showed that even though the areas of law that this practitioner practices in, were quite different to Graeme, the cash flow improvement strategies resulted in the same dramatic improvement to cash flow that Graeme has achieved.
The Melbourne practitioner in this case is Stuart Gibson of Gibson’s Solicitors who principally practices in the area of IP and media and entertainment.
Here is a list of cash flow “secrets” that Stuart has adopted following the webinar:
1) Follow up outstanding accounts
We have all heard the saying “The squeaky wheel gets the oil”. It is true, if you are the squeaky wheel, you will get paid before other creditors.
2) Regularly check your bank balances, both general and trust
By staying aware of what monies he is holding in trust, Stuart has found that he can ensure that funds are transferred to his general account quicker after work has been done, so that the general account stays in the black.
3) Send invoices by email
The quicker the client gets your bill, the quicker they pay you. Just as Graeme found that emailed invoices are paid quicker, Stuart has found the same.
4) Call on the 14th day
Graeme uses this strategy and it works for Stuart just as well. Having 30 day accounts is outdated. You’ve done the work, you should be paid
5) Invoice on completion
While you may bill regularly on a matter, make sure that you get your final bill out as soon as the matter is completed. Your client’s memory of the great job you did diminishes rapidly, so delay at your peril.
6) CC your clients
Graeme is the first practitioner I had heard of, that cc’d the client when he was sending an email in connection with their matter. He found that it keeps the client in the loop of what’s happening on their matter. And guess what… they start to appreciate how much work is involved and they pay you quicker. Stuart has found exactly the same thing applies in his practice.
7) Develop a script to explain your fees
Who relies on the client reading your engagement letter to explain your fees? The best way to ensure that the client understands your fees and how much they may be, is to tell them, face to face or by telephone. Stuart has found that is you have a written script of what works, you follow the script and it continues to work
Want Further Help?
If you want to improve cash flow at your firm our new cash flow improvement program specifically designed for small law firms would be a great way to start.
You can find out more by visiting the Ritchie Business Solutions shop or you can go there directly by clicking on the following link: