Law Firms: Get Those Big Invoices Paid Faster!

          Law Firms

     GET THOSE BIG
          INVOICES
       PAID FASTER!

I suspected that corporations sat on large law firm invoices purposefully to hang on to their money longer.  It’s got to add up to a pretty penny, right?

My slowest pay situation was a huge case where the client routinely took FIVE months to pay!  Not only was it difficult on the law firm, but it was it was very challenging the vendors as well.

I had the opportunity to talk with in-house counsel about it when he shared his own frustration about the constant slow pay situation.  He said the larger the dollar amount of the invoice, the more approvals were needed.  In this situation, it took the approval of the in-house attorney that was managing the litigation, his boss and his boss’s boss before the invoice could be submitted for payment.  Most of the time the invoices were sitting in an in box with several other huge invoices.  

After our conversation, I started sending a simple email recap every month to the attorney managing the litigation.  It was something like this:

Subject:  [Law Firm], [Case name] and [Month] Invoice

Dear Sam,

The fee amount of  the invoice i                                        $________

The expense amount is:                                                     $________

The total amount is:                                                           $________

The budgeted amount for this month is:                          $________

The variance is:                                                                  $________


The primary reasons for the variance were:

1.  _____________________________________________________

2.  _____________________________________________________

3.______________________________________________________


Most of the fees were spent in these main areas:

• ___________________________________________________

•  __________________________________________________ 

• ___________________________________________________

•  __________________________________________________

• ___________________________________________________

If you have any questions or would like more detailed information, please let me know.

Thanks.

The invoice recap helped shortened the payment cycle from 5 months to 2 months.   It contained information that made it faster for each person to approve the invoice.  The recap might have gotten the invoice moved to the top of the stack because it was easier to approve.  In any event, you might consider finding out what the hold up in the approval process is of your routinely slow-to-pay invoices so you can proactively address the situation.   It is more effective than calling to follow-up on payment status.   Give it a try.  I hope you achieve the same results!