Most of us, as lawyers, avoid the issue of payments like the plague. For us, having work is enough, and we fear we will ruin our client relationships when we keep asking for payments.
When asking for payments, we feel like we’re being a burden or a nuisance to our clients, or we can sometimes even feel “sleazy” asking for money.
But if you want to clear a path for a continuous stream of income for your firm, you need to know every single client who owes you money. I want you to go through every single case in your firm and figure out the following:
- Who is on a payment plan
- How much they have paid
- How much they owe
You also need to know who isn’t paying, that way you can get that client on track or send him to collections.
How to Organize Your Billing System
Keep all your billings in order and identify who has and hasn’t paid yet in just 3 steps:
- Create a spreadsheet as a backup to keep track of all payments—including their due date.
- Once you get your spreadsheet all set up, add it into your case management system.
- You can then start to run your bills through your case management system. But you should still keep the excel spreadsheet as a backup!
Why It’s Important to Organize Your Billing System and Payments
Organizing your billings can be a time-consuming job, but it’s important for these reasons:
- Identifying which clients need to be reminded of their payments. You can prioritize sending invoices to clients who have overdue payments to get your income stream regularly flowing again.
- Continuing the case without using your own funds. You’re a lawyer, not a bank. Everything you spend on the case—from application to transaction fees—should be funded by your client. You’re just providing your expertise, after all.
- Properly monitoring the earnings coming into your firm on a monthly/annual basis. It’s always important to keep track of your finances. It helps you make sure you are achieving the correct estimated earnings based on your number of clients.
There’s nothing wrong with asking for money that you are owed. You have a contract that covers all your services and the appropriate price for it. Both of you agreed to it, so your client needs to do their part. And if you aren’t using contracts every single time, start now. It’s imperative for your protection!
Your Money Is The Most Important Part Of Your Legal Business
It isn’t bad to want to get paid for your work. It isn’t greedy to get paid for your work. It isn’t selfish to get paid for your work.
Get those thoughts right out of your head. You run a business and the purpose of a business is to make money. You aren’t getting rich off of anyone’s backs. You are doing great work for your clients. And in return, you should make a great living. At the end of the day, it’s a value exchange.
You have to have money to be able to do the work that you love. If you don’t get paid, you have to close your doors. You aren’t a nonprofit. And even nonprofits have to have money coming in to keep their businesses afloat.
If you can believe it, I have even more knowledge to share on this topic! If you’d like to learn more about how to organize your billing system, sign up for my Six Figure Solo program! Six Figure Solo now comes in three tiers – Executive, Solopreneur, and CEO. Sign up here!