Several years ago we consulted to a large legal firm. 25 Partners. 60 other lawyers. 85 Fee Authors in all. They had a full time Credit Manager, Murray, on staff. He was not getting good collection results.
Overdue accounts had completely blown out. So had their overdraft. Why?
We were called in to see what was going wrong. Didn’t take long to find out. Simple maths. There’s only 5 working days in a week. 85 fee authors divided by 5 days = 17. Murray had to see 17 lawyers EVERY DAY just to get permission to follow up any clients with overdue fees that each lawyer may have! A totally impossible task.
As a result, very few reminders were sent out and even fewer phone calls made. So – poor collection results. They weren’t even asking their clients to pay.
We circulated an internal email to all fee authors advising them that the onus in future was to be on them to request (by email) that no follow up action be taken on any clients that they wanted to have taken out of the normal collection review. In other words, Murray would assume that he was able to action all accounts as soon as they became overdue unless advised to the contrary.
As a direct result of this very simple policy adjustment, results improved exponentially. Within three weeks of that internal email being circulated and additional support from our company that firm of lawyers recovered over 40% of the total fees that had been outstanding.
Please note that all fee authors were free at all times to stop any collection activity at any point, but the onus was now on them to ask Murray to stop (by email), not for Murray to get permission to follow up each individual account.