Here are three small changes you can make to your practice that can have a big impact on your cash flow.
No matter the size of your law firm, maintaining a positive cash flow is essential. The most successful law firms use a variety of best practices to manage their finances effectively, many of which can be implemented relatively quickly. We’ll lay out three different ways you can make small changes to your practice that result in a significant positive impact on your bottom line.
Processing and storing physical documents can add up to significant amounts of money over time. Some firms are spending thousands of dollars on physical document storage alone. Not only are you paying for paper and file cabinets (as well as off-site storage, potentially), but also the labor of filing documents and searching through them. If a document gets misplaced, you or your employees will have to spend hours tracking it down, taking away time you could be spending on your clients’ cases and bringing in more billable hours.
Switching to a digital document management system eliminates nearly all of these issues. By working primarily with digital files, you’ll eliminate the need to purchase as much paper, as well as related accessories. Plus, compared to physical storage, paying for a digital storage system for your digital files is significantly cheaper. These days, offices can purchase hard drives with generous storage space for less than $500 each, or invest in cloud storage at a similar cost. And there’s the benefit of easier organization—if you need a particular document, it’s typically as easy as searching for the file’s name.
Still, for many firms, acquiring a signature is the biggest reason why they still continue to use paper. However, with client portal technology, you can accept signatures from your clients digitally in the form of an eSignature. A report conducted by Ombud revealed that businesses could be saving as much as $20 per document by accepting eSignatures online. Plus, client portals eliminate the need for you to send invoices or documents via traditional mail, meaning you’re also saving on paper, ink, and postage costs. And, as an added bonus, you don’t have to wait for the document to be delivered to your client by mail—they will receive it nearly instantly and can provide you with a payment or signature just as quickly, saving time for both of you.
Being more transparent
Healthy cash flow is often more of the result of a series of actions and behaviors rather than simply “getting the job done.” In the case of legal professionals, it’s not always about just getting cases and seeing them to completion, but how you communicate with your clients and the overall way you treat them. After all, happier clients will be more satisfied with your service, which will make them more inclined to pay you (and recommend your services to others).
If there’s anything clients don’t like, it’s surprises. In most cases, surprises arise when the goals you’ve set out and the goals your client has in mind are mismatched. That’s why it’s absolutely imperative that you properly vet and interview every client that walks through your door. Ask your potential client what they are hoping to achieve with their case, and how they’re hoping you can help them. After hearing them out, explain your skill set and what you think you can reasonably achieve. If you don’t feel you can reach your client’s expected goals, and your client isn’t willing to listen, don’t take the case!
While we’re on the subject, another thing clients aren’t typically fond of is a lack of consistent communication. Make a habit of regularly relaying information to your client—whether it be through phone calls, email, or whichever communication channel your client prefers. Ideally, aim to send these communications at regular intervals. This will minimize the chance that your messages will go unheard or unexpected, and will foster confidence in your client that you’re working in their best interest. The more you stay in touch with your clients, the happier they’ll be with your services overall, significantly reducing the chance of payment issues when their case is concluded.
Online payment solutions
A recent U.S. consumer payment study showed as much as 75 percent of consumers today would rather pay for goods and services with their credit cards than with cash or paper checks. Clients want this same level of convenience when it comes to paying for professional services like yours. Plus, it’s safe to say that the majority of your rivals in the field are using one as well—if you’re not on the bandwagon, potential clients might look elsewhere for legal services.
Thankfully, offering this convenience to your clients can have significant benefits on your bottom line, as well. In fact, a recent study showed that law firms are getting paid 39 percent faster by using an online payment solution. You can simply send your client an invoice via email and they can submit their payment right away, meaning the process of transferring funds will be significantly faster than traditional methods. Online payments also offer your clients more options to pay, making it more convenient for them to pay you at their convenience.
While we’re on the subject of convenience, making it easier and faster to pay for your services can leave a very positive impression on your clients. Clio’s 2018 Legal Trends Report showed that as much as 50 percent of clients are more likely to hire a lawyer if they offer online payment options. The same study indicated that 40 percent of clients would actually look elsewhere if they discovered a lawyer didn’t use an online payment solution. Fostering happier clients often leads to repeat business and positive reviews for your services. Your bottom line can only stand to benefit from making your bill easier to pay.
Learn more about the impact an online payments solutions can have on your cash flow by visiting lawpay.com/nysba.