Authored By: Candace Whitman
Even in the most successful law firms, cash flow can fluctuate significantly. Your firm may settle a large case one month, but then not settle another for several months. Here are a few ways you can improve cash flow for your firm.
Improve Your Law Firm’s Productivity Through Technology
Technology can be a great tool to improve productivity at your law firm. Research different case management, client intake, timekeeping, or billing software programs that may be worth investing in to improve the efficiency of your firm. Time is money in any business so find technology solutions that can make your firm’s job easier and allow you more time to focus on the tasks that matter most for your revenue.
Make Paying Convenient For Your Clients
Think about all the common hurdles that your clients express to you for late payments and brainstorm ways to solve those problems for them. You may consider offering online payments or payment plans, sending out automatic reminders via email, and ensuring that all your clients' billing questions are answered in a thorough FAQ. Having a client-focused billing strategy can improve payment times and benefit your firm’s cash flow.
Reduce Costs
If you are looking to improve your cash flow, look at everything your firm spends money on and evaluate if there are any vendors you could negotiate with for a lower price or any programs or services your firm is not getting value from that could be cut or changed to a less expensive provider.
Track Billable Hours
Create a solid system for tracking billable hours at your firm and encourage your lawyers to track tasks right after completing them to help ensure no hours are lost. Your firm can also find case management or timekeeping software that best fits your needs and helps your firm track billable hours as accurately as possible.
Consider Case Cost Financing
Cases can last for years and years and when you are funding your own case expenses you are essentially giving an interest-free loan to your clients. Case expense financing allows your firm to hire the best experts without concern for how your cash flow will be affected. When you don’t have all your cash tied up in case expenses, you level the playing field with competitors and insurance companies and free up your cash to accomplish other goals like growing your law firm.
Advocate Capital’s case cost funding service smooths out the valleys for you in between case verdicts and settlements by replenishing the funds you have spent on case expenses.
If you have any questions about Advocate Capital’s Case Expense Financing Service, feel free to contact us. Visit our application page if you would like to apply.
Financial Options for Law Firms Experiencing Cash Flow Problems
Business Checking
We have a special affiliation with Pinnacle Financial Partners, so we can offer you an array of account options to fit the needs of your business. Read more about Business Checking here.
This enables you to earn interest on your law firm’s savings with a Vision Business Savings or Zenith Business Money Market. Read more here.
IOLTA Accounts
Through our partnership with Pinnacle Financial Partners, we offer IOLTA deposit accounts, which are interest-earning trust accounts.
Working Capital Lines of Credit
A versatile, prime-based law firm line of credit that can be used for a variety of purposes at your law firm including advertising, payroll, overhead, and case expenses. Read more about Working Capital Lines of Credit here.
Small Loans
An option for smaller law firms or those just getting started who do not yet qualify for Case Expenses or Working Capital Lines of Credit. Read more about Small Loans here.
Term Loans
Can be used to make an investment in equipment for your law firm. Read more about Term Loans here.
SBA Loans
SBA (U.S. Small Business Administration) loans are federally-backed small business loans for law firms that can be procured through a bank or credit union, but the application process can be lengthy, and there may be restrictions on how you can utilize the funds. Read more about SBA Loans.
