December 15, 2005
Best Law Firm Practices for Increasing Realization
The approach to raising per-partner income should be done with long-range considerations. The first set is to determine how the firm stacks up against benchmarks such as those available from Altman Weil surveys, http://www.altmanweil.com. Concentrate on the areas where you fall short.
The list below is a reminder of steps that you can take, among others, to increase realization and improve per-partner income.
Steps for Increasing the Firm’s Realization
- Implement and enforce client intake standards
- Pursue alternative fee arrangements that let the firm benefit from increased efficiency and technology
- Shorten the billing cycle to speed up collections and reduce bad debts and adjustments
- Pre audit bills against engagement standards (rules) to eliminate bill rejection and reduce adjustments by corporate and financial clients
- Establish controls over unilateral write downs during the billing process—so-called invisible expenses average $31,000 per attorney per year
- Improve training to reduce write-offs
- Centralize follow-up on accounts receivable
- Improve collection tools and procedures
- Set goals and hold people accountable
- Invest in better business systems to speed up billing, track adjustments and write-offs by those responsible, automate engagement rule compliance and manage the collection function.
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Filed under Law Firm Bus Model by Tom Collins