Don’t Socially Distance Yourself from Payments
When the COVID-19 pandemic reached the United States around March of this year, law practices in many areas of the country, including Arizona, were forced to go remote. This (sometimes bumpy) transition raised many concerns for lawyers, top among them being how to get paid by their clients.
Below we will discuss some tips and best practices for getting paid in the era of COVID-19, as well as what you can do to increase receivables in your firm.
1. Potential New Client (“PNC”) Consultations
Generally, a PNC consultation is when a client meets with an attorney for the first time, with the likely outcome being the retaining of said attorney. Some attorneys waive their consultation fee, while others charge for it (typically the equivalent of an hour of their billable time). Problems begin to arise when the attorney and/or their staff are not clear about how or when this consultation fee gets paid.
Imagine this—a PNC calls a firm and requests a consultation with an attorney. The receptionist does the normal conflict check and schedules the meeting. She also informs the PNC that a consultation fee of $250.00 will be due prior to the meeting. Fast forward to the day of the consultation—the receptionist forgets to confirm the payment was received, and the attorney takes the meeting without knowing this.
After the meeting, the attorney and his or her staff are left in the awkward position of tracking down the PNC to procure the funds owed to them.
This is a familiar refrain in the legal industry. So, how can an attorney avoid this awkward situation altogether and get paid for the meeting?
Always take the consultation payment up front, prior to the meeting. It should be made clear to the PNC, in writing, that the consultation will not take place unless and until the payment has been confirmed by the firm. Make sure everyone in the firm is made aware of this policy.
Given the pandemic, how does the attorney get paid for an initial meeting when the PNC doesn’t want to leave his or her house? The solution would be for the firm to utilize online payments. Prior to the consultation, the firm can simply send an email to the PNC reminding them of the appointment, that the consult fee is due prior to the meeting, and they can click the link (typically connected to their LawPay trust or operating account) below to pay.
2. Traditional Invoicing
Most firms are familiar with billing their clients on a monthly or semi-monthly basis. But, are they maximizing their ability to get paid on time, every time?
Regarding when to send an invoice, law offices should bill clients on the same day every month for internal consistency and external predictability. Even better, firms should aim to have their clients receive their monthly statement around the beginning of the month, typically about 3-4 days after the first of the month.
In the age of working-from-home and social distancing, the firm should be offering the client the option of paying their bill online by credit card. When sending out an invoice, the firm should include a link to the LawPay payment page that the client can visit and then pay at any time.
3. Invoice Follow-Up
It is exceedingly rare for 100% of a firm’s clientele to pay their invoices in full and on time, every single time. An attorney typically has to have a plan to follow up with clients who have not paid their monthly invoice, lest they risk non-payment of the bill. The longer a bill sits unpaid, the less likely it becomes that it will ever get paid.
About a week after invoices are sent out, the attorney should schedule time on their calendar for a follow-up contact. Generate a list of the clients who have not paid their invoice, and how much each one owes. The attorney should then reach out to the clients directly to inquire about payment.
As mentioned above, give the client the option to pay by credit card. Many consumers do not use or carry around checkbooks, and most people do not want to go to a bank to obtain cash or a money order with which to pay their attorney. The attorney just needs to add a payment link into their follow-up emails, and both they and their clients are all set.