5 Tips to Increase Law Firm’s Revenues Using AR

Dimitri Raziev15 Jul 20224 mins
5 Tips to Increase Law Firm’s Revenues Using AR

Would you believe it if we told you that to increase the revenues of your law firms, you don’t have to work more than you currently do? Or that you don’t have to increase your prices either? Here is the secret to driving more revenues: you need to work smarter, not harder. And you also have to bill smarter, not higher. Below are five tips and tricks to increase not only your revenues but also your net profits with the help of digital tools

1. Take care of your cash flow by speeding up your payments. 

Increasing your revenues is not enough to sustain your company. It would be best if you optimised your profit. To ensure a healthy cash flow, you can consider cutting costs. However, the most straightforward practice would be to make the most of your assets by accelerating your payments. 

To get paid faster, do not discourage customers from honouring their bills. Instead, offer them as much flexibility as possible in your payment options.

Kolleno’s cloud-based accounts receivable platform guarantees a seamless payment experience with tailored payment plans and options. Easy-to-navigate Payment Portal offers convenience to pay via any payment method (Stripe, Direct Debit, ACH or EE transfer payments). Moreover, you can include the link to the payment portal in any message that you send to the client.

2. Improve AR to Increase Law Firm Revenue 

You can virtually earn a lot and have too much of these revenues tied up in the accounts receivable on your balance sheet. Therefore, you must elaborate a proactive collection strategy to tackle unpaid invoices. According to the 2018 Legal Trends Report, the average law firm only collects about 85% of its invoiced amounts. Smith & Williamson’s analysis of the Top 50 law firms’ accounts reveals that clients owe over £5bn to law firms and unbilled work amount to £2bn. In the best scenario (the one where you eventually receive your payment), it takes about four months for your firm to receive the payments… When you chase your clients to pay your bills, you lose valuable hours that you could spend on direct responsibilities. Turn the hours you spend on AR into increasing your law firm revenue.

Kolleno accelerates your collection processes by finding the best time, channel, and content to reach your clients and adjust to every one of them, thanks to Artificial Intelligence and Machine learning. Our solution estimates the best timing to send reminders. Also, it finds the most appropriate form of communication and the perfect tone of voice. 

3.  Identify manual tasks to save time and work more efficiently 

Review manual processes you and your staff are doing daily. It will help you identify areas where you can save time and focus on added-value tasks, thanks to automation. You should spend your time on activities which drive revenues and minimise the time you spend on non-rewarding functions you can automate.

Relying on technology helps to streamline processes, billing and collection of invoices. The 2020 Legal Trends Report reveals that law firms using technology brought in more revenue. During the pandemic, many firms invested in legal technology to face challenges. For example, at the beginning of 2020, firms using electronic payments saw their revenues increase by 6% and their collection by 2% to 3%. By the end of the year, firms using client portals achieved a net-zero impact and reached up to 5% more growth in 2020. Overall Non-billable tasks strain your cash flow and make you miss out on potential revenue. The 2020 Legal Trends Report demonstrates that lawyers dedicate an average of merely 2.5 hours per day to billable work.

4. Reduce your expenses

With Covid, more and more law firms have relied on remote working, video meetings, or virtual court hearings. These drastically reduced expenses by helping to keep costs down. It allows lawyers to be more flexible with their time and make the most of it to create revenue where it was once impossible. 

5. Make the most of your billable hours 

On average, lawyers spend 1.1 hours daily on their phones doing billable work, yet they don’t get paid for all these hours because of the difficulty of tracking billable hours. Capturing and billing this time appropriately is crucial for law firms. 

Once again, automation helps monitor and optimise the tracking of actual worked time. Many billable hours trackers exist on the market and enable you to quit manually recording the time you spend on tasks. Investing in these automated tools is essential to capturing revenues and optimising your profit. 

Take away 

Increasing your revenues and your profits doesn’t involve working more hours. By identifying manual tasks and automating them, you can achieve more by doing less. You can also reduce your expenses and track your billable hours to make the most of them, but more importantly, you should start by leaving no worked hours unpaid. Your collection strategy is at the core of your business’s growth, and in this regard, automation is your best chance at increasing your profits. 

Recover your fees with success and ease, and collect more, faster. Thanks to Kolleno, businesses have already collected more than ten million pounds, with a 90 per cent rate of successful recovery and five times faster than your usual manual processes. With such a simple yet powerful credit control solution, nurture your cash flow, and unfreeze your assets by converting your accounts receivable into actual money.