For some time it has been a complaint of the legal profession that a number of their major corporate clients are dragging their heels about the payment of bills, with at least one magic circle firm delaying its profit sharing payments to partners as a consequence. With the largest firms billing up to £1bn a year in the UK alone, what appear to be small delays to payments can have a dramatic effect on cashflow and ultimately profitability.
The problem is not just one of size – it is also one of complexity. One firm has claimed that 38% of its clients now use it in more than 10 countries and in more than 20 practice areas. While the problems are therefore only too evidently complex, solutions are available that not only improve cash flow but, as a direct consequence, improve the relationship between legal firm and client – the much sought-after win-win.
