"Ideas for Increasing Profitability and Cash Flow "

by Jennifer B. Atkins, Administrator,
McCrory & Associates Co., LPA

     I had a finance professor that said "Cash is King" more times than I care to remember. And unfortunately, we often only focus on cash when we don't have it, or revenues are slow. Here are some ways to make your law office more profitable and efficient now and into the future.

1. Just say no! Think twice before agreeing to do work for clients who don't have the financial strength or creditworthiness to pay you on time. To protect yourself, request substantial retainers from clients who may be financially marginal.

2. Expedite your billing. Standardizing your billing formats will speed up your billing process, reduce training costs and get cash in the door quickly. Customizing each bill slows the process substantially. On the other hand, some clients demand bills in a special format before they'll pay. Make sure all t's are crossed and send bills that are accurate to insure quick client approval and payment.

3. Pay your support staff lots of money. High staff turnover is a huge, hidden personnel cost. Making sure your staff is adequately compensated reduces turnover and improves your productivity.

4. Document, document, document! Nothing is worse than an employee that alleges wrongful termination and your firm lacking in documentation. Why settle when you don't have to? When addressing issues with under-performing employees, have a second person present to document the issues and have the employee sign your comments to acknowledge what was discussed.

5. Deduct personal charges directly from paychecks. This keeps balances in check and keeps the firm from being a bank.

6. Shop til you drop! Even though its time consuming, annoying and generally makes us cranky, go through the arduous process of reviewing the market for professional liability insurance at least once every three years. Also consider financing your premium- sometimes you can find this for less than prime.

7. Consider records management software. A large hidden cost in many firms is looking for lost files. This software can pay for itself quickly in the time you save hunting for the missing.

8. Don't two-time payables. Pay only from original invoices- never copies or statements. This reduces your chances of duplicate payments.