Lawyers frequently face challenges with money management, stemming partly from their legal education. In a recent Non-Eventcast episode, Joyce Brafford and Scott Clasen discussed effective methods to boost cash flow in small law firms. Key strategies included following up assertively with clients in arrears, implementing pre-authorization agreements alongside payment timetables, and accepting processing fees that come with these agreements. Such approaches not only address past due payments but also proactively secure the financial future of firms, making a significant impact on cash flow.
Overcoming inertia can be as simple as following up with clients who are in arrears, potentially resulting in financial returns in the six-figures.
Preventing clients from going into arrears with engagement agreements and structured payments can significantly enhance cash flow.
Joyce explains that accepting a 3% processing fee for pre-authorization is worth it, as it simplifies payment collection and improves financial outcomes.
Law schools excel at financial transactions, but the larger issue is how lawyers manage that money once they begin collecting.
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