A healthy cashflow and professional client service are at the heart of any profitable law firm. Efficient billing helps free up capital and improve profitability. A client will gain an impression, good or bad, from all contact with the firm, including any correspondence related to billing and fee collection, so it is important it is done in a timely and accurate way.
While 2005-06 was a strong year for law firms in terms of increased revenue and profit, this has not necessarily translated into improved cashflow. As firms grow, they often look to invest in new offices or IT infrastructure and if the cash is not available within the business to fund this investment, it may need to be borrowed, incurring additional costs.
