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Bills Out; Money InIndiana State Bar Association
Solo Small Firm Conference 2015
PresentersPeggy Gruenke
Accidentally
Successful?
Are You….
• Know the sources from where your clients originate
• Know WHY your clients hire you
• Where the time goes• Know the sources of
your income• Know what you’re
spending• Concentrate on
improving revenue
To learn how to be better lawyers
To learn how to be better business owners
Support your local bar association’s events
Law Firms are Simple Businesses
Forbes article in 2014, law firms ranked 2nd as profitable business model
Average profit margin – 17.8%
Low operating costs
Predictable expenses
Increased focus on efficiency and tech
Financial health dependent on 4 simple concepts:
1. Getting the work2. Doing the work3. Getting paid for the work4. Repeat
Steady flow
1.Your current bank balance2.Your current past due invoices
amount3.Your Trust balance
4.And the name of one client to fire!
Write down these numbers:
How much larger could that bank balance be and how much smaller could the past due balance be if you made these changes….
Some Billing Tips
Enter Your Time
Use Software MADE for LawyersPick One and Stick With It
Bill Every Month – even Twice a Month
Nothing is free that costs you your time.
Manage Your Client and Expectations
21
Get it in Writing
Clearly identify terms of engagem
ent
Ask how you are doing
Ask for feedback as matter progresse
s
Don’t annoy your
clients
Return phone
calls and emails
Send them
copies of important document
s
Document, Document, Document
Record advice or
instructions that involve significant
issues or outcomes
Memorialized
communications help confirm
what was said or done
Communication
22
Manage Expectations
Not just at start but
throughout matter:Discuss
outcomes, how long,
fees, expenses
Meet or Beat Deadlines
Set realistic deadlines;
Under promise, over
deliver; Don’t
procrastinate
Get the $ Up Front
Get a retainer and replenish it.
Stop Work if No Payments
Management
Build a Roadmap of the Case
The one “technology” your clients really wish you’d get better
at using is the telephone. Call them back!
Get Retainers and Get Them Replenished.
Make Bills Easy to Read
Value (Task) Bill
Charge Interest
If your clients stop paying you, don’t ignore them. Fire
them.
Clip a picture of your kids to the top of your stack of invoices
Write-offs are not discounts
Bonus Tip. Take Credit Cards
Flat Fees and Law Firm EconomicsDo They Benefit Your Clients?
• It’s predictable• It’s transparent• Shared risk• It builds trust• It simplifies the “getting
paid” process• Focus shifts to workflow
and execution
Are Flat Fees Right for Your Firm?
Will flat fees improve profits?
Do they expose you to a new set of desirable clients?
Do you have the marketing platform for your flat fee services?
Do you have the right metrics in place to measure the financial performance of flat fee cases?
What Do You Measure?
Exam historical data• Billing data• Collections history• Number of flat fee cases• Cost per flat fee matter• Revenue per flat fee matter• Practice areas used • Indirect impact – flat fee
clients who engage firm for additional services
Reporting
Simple Dashboard ReportSimple Dashboard Report
In the State/Provincial Bar We TRUST
Monies in trust not your asset
Follow the rules
Available is NOT Cleared
Retainer concepts
Make your CPA understand
Make your BANK understand
B
Thinking like a lawyer doesn’t pay the bills. Thinking
like a business person does.
Key Metrics You May Measure
Hours Entered vs. Billed
Discounts
Write-offs
Expenses
Realization Rates
Reports for Your Firm
Cash in the bankAmount billed each monthAccounts PayableAccounts ReceivableWork-in-ProgressHow much time was written down/off
B
ConclusionTime is inventory - don’t ignore it
Concentrate on building revenue
Know the sources of your business
Bill regularly, consider value billing
Don’t work for free
Understand your finances
Review your budget
What will you change when you get back to the office?
Thank you!Peggy Gruenke
Me - @peggygruenke http://www.linkedin.com/in/peggygruenke
