Billing and Collections

Opportunities exist in the back office for law firms to reduce administrative expenses, improve cash management, and increase staff performance to optimize and deliver exceptional customer service. Trends suggest that by focusing on the billing and collections function, a firm may find success in achieving these objectives. The complexity and expectations of billing and collections at law firms have increased significantly over the last several years. The evolution is driven by client demands such as:

• Strenuous pre-approval and payment processes;
• Proliferated and expanded use of outside counsel guidelines; and
• Increased use of multiple e-billing platforms.

Of course, it is not all about customer service; there are incentives for law firms to do a back-office overhaul. For example, optimizing the billing and collections function can help improve work-to-bill cycle times and minimize days sales outstanding. To achieve improved results, firms need to focus on developing policies and procedures, and implementing technologies that will produce and deliver straightforward bills to their clients. When striving to meet this goal, billing and collection functions face challenges in their ability to:

• Comply with all time and expense rules specified in clients' outside counsel guidelines (including but not limited to how attorneys: a) spend time, b) record time and expenses, and c) are pre-approved);
• Establish and maintain client-specific rate codes in internal billing and external e-billing systems;
• License and support a variety of e-billing platforms utilized by their broad client base;
• Issue invoices and collect payments in a timely fashion; and
• Track and resolve client invoicing issues, such as gathering approval from various client end-points and reconciling matter-related fees and expenses.

While redefining a firm's infrastructure may seem like a daunting task, improving billing and collection capabilities and standardizing procedures will pay significant dividends in both the short and long terms. Key areas of focus for this type of initiative include; policies and procedures, organizational structure, and the role of technology.