Category: Billing

Sometimes a Carrot is Better than a Stick

We as lawyers are an interesting lot. Because many of us record our time in increments of 6-15 minutes and bill at generally fixed rates, we often come to measure the value of everything in minutes and dollars. We become focused on the Dollar; a trait for which we are often much maligned by the public. I happen to believe that this trait is more a symptom of our daily lives as lawyers than a somehow innately negative trait. Regardless, if we recognize such traits, we can sometimes harness them to our firm’s advantage.

Many years ago while in private practice, our firm struggled to get all of our attorneys to enter their time on a daily basis. Some of the attorneys were always timely and some where chronically slow to enter their time. With so many client matters requiring multiple lawyers to enter their time before an invoice could be sent out, this situation brought the circulation of our firm’s revenue cycle to its knees at the end of each month.

After what felt like years of consternation, one day we implemented a beautifully simple solution. We announced a system of monthly “mini bonuses” where each lawyer was awarded an equal and fixed dollar amount for every day that his or her time was entered by a set time the following business day. At the end of the month, these “mini bonuses” were paid out to each of the firm’s lawyers. Not wanting to miss out on such an easy monthly bonus, even the worst offenders started entering their time daily. Virtually overnight, our firm’s ability to more promptly process invoices skyrocketed. The best part of this solution is that it cost the firm nothing. After many years, that system is still in place although I would guess that habit and culture no longer require it.

Assessing the ABC’s

One of the first things I learned as a ski patroller was to assess a patient’s ABC’s: Airway, Breathing, and Circulation. These are not high-level functions but they are vital to survival. In a healthy individual, they happen automatically and regularly. When they are disrupted, they must be treated immediately. Until the patient is handed off to a higher level of care, the ABC’s must be continually re-evaluated to ensure the patient’s health and safety.

Recording time and billing are not high-level functions, but they are vital to the survival of a law firm. A law firm’s revenue system must function automatically and regularly. When this system gets disrupted, as when time does not get entered or invoices are not sent out after the end of each month, the health of the firm is compromised.

When is the last time you stopped and checked your firm’s ABC’s? Is time entered daily? Do bills go out promptly after the end of each month? Is revenue steadily flowing in? Is the pulse of the law firm strong and regular or is it weak and irregular?