According to the Clio Legal Trends Report, the utilization rate or the number of hours billed divided by the number of hours worked for lawyers was only 30%. This means that almost two-thirds of a lawyer’s workday was spent on non-billable hours. The realization rate also showed that only 81% of billable hours worked were involved, and the collection rate averaged around 85%. As a result of these figures, we can conclude that law firms everywhere are missing out on a lot of money.
Although firms know how critical billable hours are to the success of their business, billing and collecting these funds does not always take priority. In fact, many firms are known for focusing on collections in the fourth quarter instead of doing it on a consistent basis all year long, which often leaves a substantial amount of money falling through the cracks.
That is why it is so important that law firms take the time to understand the balance between billing and collections, how to make it work for their firm, and why their efforts should be considered billable hours.
When it comes to an attorney’s billable hours, one of the best things a firm can do is come up with reasonable standards regarding this practice and ensure that their staff is following them. This can help the firm bill efficiently and effectively while still providing their clients with the experience and services they deserve.
For instance, consider the following best practices regarding billable hours that may be helpful to implement into your law practice:
Although billing and collections are an important job, they are also incredibly time-consuming, which can lead to issues and lost revenue if they are not done right. Worse yet, the time that is actually spent on these tasks often hinders a law firm’s ability to grow.
Fortunately, when you work with a collection agent, you will not have to take on these complex and tedious tasks alone. With these experts on your side, you can go back to focusing on growing your business and helping your clients while these collection professionals handle all the billing and collections for you.
For instance, at Back Office Legal, our collections experts help firms of all sizes maintain healthy and efficient accounts receivable while also ensuring that these firms get the money they need from their clients and get paid on time.
We not only work with each lawyer to write up and go over all the billing processes and procedures that their firm should implement, but we also help them with their budget and teach them how to communicate with clients to collect outstanding fees. Consequently, when you outsource your billing and collections to our team, your firm can end up benefiting from our automated processes and efficient management. In fact, our research shows that we can collect more than 90% of your revenue before your clients’ terms are even due.
At Back Office Legal, our services not only reduce operational costs by eliminating salary costs and expenses but because we ensure critical payments are processed on time and on a regular basis, we help you save money and make sure that you get your funds faster and more efficiently.
With over 30 years of experience working with law firms, Back Office Legal has professionally and effectively managed various Accounts Receivable operations and helped countless lawyers focus on growing their firm’s business. As a result, we know what it takes to handle a law firm’s billings and collections process, and we are ready and prepared to take on this task for you