♬ Pennies from heaven.
Don’t you know each cloud contains
Pennies from heaven.
You’ll find your fortune falling
All over town… ♬
Of course the best way to avoid large unpaid accounts receivable is to always have funds in trust, ready and waiting to pay an invoice that has just been rendered to a grateful client. Well we all know that many times, this is but a dream and lawyers are forced into the less-than-pleasant task of having to try to collect their accounts receivable after working hard on a file. So what advice is there for those who want to clean-up their aging accounts receivable?
This tip actually was passed onto us from an attendee during one of our in-person presentations on law firm finance and we are in turn, passing it along to you (paying it forward, as it goes…).
Seems that this particular firm retired a partner but the ex-partner’s wife got tired of him hanging around the house – so he went back to the old firm and asked if there was something – anything – that he could do for them.
SO….they thought about it and gave him the job of collecting on the firm’s account receivables. After all, from all his years being around the firm he knew the firm’s clients and he knew the lawyers. So he started making phone calls….
According to the fellow who relayed this tip to us, the firm’s accounts receivable never looked so good…
So while we still say that you still should ask for ernest money up front from a client (and keep the trust account balance in the black by repeatedly asking for replenishment of the trust retainer over time), the next best thing may be to bring in a retired partner and give him or her the task of putting the accounts receivable into order. You may just find pennies from heaven and your fortune falling all over town….