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So you have got a desk, a phone, a client and a case. It seems you finally have it all. Now all you need is money. You are pretty sure your law school and your bar preparation course never offered billing and collection 101, which is as important to the survival of your practice as winning a case or blowing a deal. So for all those lawyers proficient in torts, contracts and civil procedure yet ignorant in billing, here are some tips offered by two billing specialists at the American Bar Association’s Solo and Small Firm Day 2000 last Thursday. Most importantly, bill monthly and bill on time, said Patricia A. Yevics, director of Law Office Management at the Maryland State Bar Association. “Send the bill at the high end of the bell curve when the client is happy and excited,” agreed Jim Calloway, director of Law Office Management at the Oklahoma State Bar Association. “As time goes on your services become less and less valuable,” added Yevics. But do not just send your bill arbitrarily, they told an audience of about 75 attorneys at The Association of the Bar of the City of New York. Especially when dealing with small business clients, find out first when they pay their bills. Then send the bill for your services a couple of weeks before they cut their checks. And never put “due in 30 days” on your invoice, cautioned Yevics and Calloway. Always put on a specific date or bookkeepers will make up a due date that is convenient for the payer, explained Yevics. “Don’t give something unless you are going to get something back,” she said. For instance, only give a discount if the client pays the bill quickly. And always show the full amount charged for services on the bill. It is important to get credit for your work and inform your client of your actual fees, said Yevics. Otherwise, a client might refer someone to your practice who will be under a mistaken impression about what you charge, she explained. Also, make it as easy as possible for the client to get the check back to you. For example, include a return envelope with your invoice and maybe even a stamp, they suggested. And make the bill as clear as possible. Include enough detail to be certain the client knows what was done. Avoid making any errors on the invoice, in particular arithmetic errors. According to Yevics and Calloway, an error on the invoice will cause a client to question the entire bill, and may cause him or her to question all past and future bills as well. In addition, make sure that the invoice is sent to the person who is actually responsible for reviewing and paying bills. “Nothing slows the payment process more than sending the invoice to the wrong person,” said Yevics. COLLECTION PLIGHT Unfortunately, doing everything right does not always get the bill paid. “You must be diligent when dealing with your accounts receivable. … As with billing, time is of the essence,” said Yevics. According to Yevics and Calloway, statistics show there is a 70 percent chance of collecting on an invoice that has been unpaid for 60 days, a 45 percent chance of collecting on an invoice unpaid for 90 days and only a 20 percent chance of collecting on an invoice unpaid for 120 days. With collection, you must first develop a collection policy, they said. Keep it simple. Determine what should be done when a client goes past 30 days, 60 days and 90 days. Although this process should be automatic, do not avoid discussing collection of fees with clients, said Calloway. At minimum, send a reminder letter at 30 days, which says something like “Is there some problem with the invoice? If we do not hear from you we will assume there are no problems and will expect payment by such and such date.” At 45 days, inform clients that they must pay within the next 15 days or work will stop. And at 60 days, stop the work, they suggested. Consider handwritten notes on some invoices to personalize the relationship. Also, be sure to contact clients when payment is past 30 days or when they do not live up to a payment arrangement. Follow-up is crucial, said Yevics. When clients know they are going to be called, they are more likely to pay the bill, she added. “Most importantly, have them tell you what is wrong,” said Yevics. Also, ask them whether they received the notice, whether they understand it and when you may expect payment, she said. And never accept vague answers such as “I’ll see what I can do,” she added. Since collection takes a lot of time and effort, a solo or small-firm practitioner who can afford it may want to hire someone part-time to do collections, or farm out the work all together, said Yevics and Calloway. “This will be money well spent.” Visit Law.com’s ABA 2000 Convention Coverage

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