Recently, Confido Legal teamed up with CPA Academy to host an informative webinar on optimizing accounts receivable and collections processes for law firms. This session provided practical strategies and tools to improve collection rates and streamline cash flow. With a focus on the Collections Optimizer, participants explored various billing models and table stakes items that contribute to enhanced collection rates. In this blog post, we'll delve into the highlights from the webinar and uncover the valuable insights shared.
Overview - The Collections Optimizer
Confido Legal's Collections Optimizer serves as a strategic guide for law firms seeking to optimize their accounts receivable and collections processes. It consists of two main components: Implementing collect early billing models and implementing the table stakes items.
Collect Early Billing Models: Typically, law firms use a late billing model, where work is completed before sending out invoices and hoping for timely payments. However, the webinar emphasized the benefits of collect early billing models, which significantly reduce payment risks and improve collection rates.
The two collect early billing models discussed were:
a. Evergreen Retainers: This billing model involves setting up ongoing retainer arrangements with clients. By continuously replenishing retainers, firms can maintain steady cash flow and minimize collection challenges.
b. Payment Methods on File: By securely storing client payment information, law firms can streamline the invoicing process and facilitate prompt payments. This model simplifies payment for clients and improves collection rates for the firm.
Table Stakes Items: While changing a firm's billing model may require substantial adjustments, table stakes items represent a set of relatively easy steps that contribute to improved collection rates. From the table stakes items on the Collections Optimizer, adding flexible payment options was the focus of this section of the webinar:
Offering clients a range of payment options, such as credit cards or installment plans, increases convenience and facilitates prompt payments. This approach reduces barriers to payment and enhances collection rates.
Webinar Outline
Evergreen Retainer Billing Model: The webinar began by explaining the concept of the evergreen retainer billing model. Attendees were introduced to the benefits of establishing ongoing retainer relationships with clients and collecting upfront payments. This model provides stability and predictability in cash flow, ensuring a higher collection rate.
Stored Payment Methods Billing Model: Similar to the evergreen retainer model, the stored payment methods billing model focuses on securely storing client payment information. Participants learned how this approach simplifies the payment process for clients, resulting in improved collection rates for law firms.
Mechanics of Charging Credit Card Fees: The webinar addressed the common question of how charging credit card fees to clients can improve collection rates. This discussion highlighted that fees may be a barrier for many law firms transitioning from traditional payment methods, such as checks. However, by leveraging this strategy, firms can overcome such barriers and successfully implement more flexible payment options, ultimately leading to enhanced collection rates and shortened accounts receivable cycles.
Implementing Third-Party Financing: The webinar explored the concept of third-party financing, specifically the "buy now, pay later" model, and how it can be applied by law firms. Attendees gained insights into complying with professional conduct rules and opinions while offering this financing option to clients. By providing alternative payment arrangements, law firms can facilitate access to legal services and improve collection rates.
Cryptocurrency for Legal Fees: While cryptocurrency payments for legal fees are not yet prevalent, the webinar acknowledged the growing interest in this payment method. Although this topic served as a concluding point, it aimed to spark curiosity and encourage further exploration of emerging trends.
See the recording at the top of this page for the full webinar.
