1. be sure to enforce it.
If you offer a discount on early
payment, remind your clients.
If you are going to charge inter-
est; collect it. Where you fail to
follow through on business
policies, it weakens your posi-
tion.
Advise the client if you accept
credit card payment and bank
charges associated with it’s
use.
Communicate call-to-action for
accounts 30, 60, 90 and 120
days past due.
Payment plan must not exceed
three to six months; factors to
consider are work left to be
done on the matter, the
amount unpaid and length of
delinquency.
My experience has taught me
that effective planning at the
onset may yield reduced stress
and improve realization. In this
edition, we examine various
factors that ultimately affect the
Receivables Management pro-
cess in Law Firms. Quite often
the scope of engagement is an
ongoing process, which may
change throughout the course
of the matter.
The engagement letter is a con-
tract specifically worded to pro-
tect the operations of a firm’s
handling of client accounts
before, during and after the
engagement. A template is
best designed and edited based
on the nature of the matter,
such as, Litigation versus Com-
mercial.
In addition to your rates, the
letter of engagement must in-
clude a clause that governs
collection of receivables and
the consequences, if the bills
are not paid. In developing a
collection process we must
examine the aging periods for
past due accounts; 30, 60, 90
and over 120 days. Although
these periods are used for ac-
counting purposes, steps can
be taken before, and during
these periods to recover fees.
Remember not only to imple-
ment a multi-step process but
Expand on the use of
‘Retainer’. The amount of re-
tainer requested must depend
on the client’s reputation and
the perceived risk of collecting
after the matter is completed.
For new clients, request half of
the total fees but where the
new client’s matter is of a
higher risk, request 70% of the
expected fees. Also, notify
clients when the retainer has
been depleted by way of an
interim bill. Make client visits
customary and take note of
the business environment.
Another factor to determine up
front is who is responsible for
paying the bill? Sometimes the
actual client is not the one
responsible for the fees.
Communicate these conditions
at the point of engagement
and prepare for the exception;
non-payment. Be consistent
and firm in your approach.
L e t t e r o f e n g a g e m e n t
‘ t h e c l i e n t m e e t i n g ’
S P E C I A L
P O I N T S O F
I N T E R E S T :
 Letter of Engagement
 WIP | Write-down of
unbilled time
 Management of
Billings
 Law Firm Metrics
 Lagging vs. Leading
Indicators
 Converting Indicators
to KPIs
Additional factors to consider when drafting Letter of
Engagement
I N T E R N A T I O N A L D E B T R E C O V E R Y W O R K F O R C E
Receivables Management Best Practices
Law Firm Edition
December 21, 2015Volume 1, Issue 1
“m ost problems
at the back
door can be traced to bad
decisions or insufficient
due diligence at the front
door”
Joy Feinberg and Donald
DeGrazia

2. Another area of concern, which
must be highlighted in the en-
gagement letter is the client’s
payment mechanism. Increased
technological advancement
have made an impact on busi-
nesses globally, hence resulting
in most financial transactions
being done electronically. Since
the last recession, most busi-
nesses have implemented a cut
off for payables, as this can
have a run on your cash flow.
Some clients don’t settle bills
earlier than 60 or 90 days.
e-Billing platforms have be-
come common business
practices. Enterprise Legal
Management Software &
Service, which now boast the
merger of TyMetrix and
DataCert, is one such plat-
form. Get this information
upfront, it saves time and will
ensure timely payment of
your bills.
There are also specific forms
that are required when work-
ing with international compa-
<Detail time entries, state what
was researched.
<Implement metrics to meas-
ure the number of bills that are
done daily, weekly, monthly.
<Attorneys must play a role in
the timely billing of work-in-
progress; validate entries
monthly.
<Look for patterns and address
reasons for delayed billings of
old entries, with the Managing
Partner and Responsible Part-
ner
The value of services rendered
diminishes in the mind of the
client over time. Delays in
billings lead to unnecessary
write-offs and write downs of
unbilled time and receivables.
<Devise a system where billings
are centralized; it makes for
better accountability.
<Get on board with e-billing plat-
forms, ensure that templates
for Statements and Bills are
uniformed, clear and concise.
There are two main areas that
offer the best potential to
improve the profitability of a
law firm’s bottom-line are
writing down unbilled time
and collection practices. Many
law firms have not been able
to control unbilled time.
Some underlying reasons are:
Training of associates: this is
unavoidable and is a long-
term benefit.
P a g e 2
Invisible
expenses
‘Work-in-
Progress’
R e c e i v a b l e s M a n a g e m e n t b e s t p r a c t i c e s
Whilst you may have imple-
mented a regular billing date
per department or fee earner, it
is not uncommon to stagger
the process. This promotes
greater efficiency and most
client’s prefer this method ver-
sus receiving one large bill.
Also, it will improve your cash
flow.
Inefficient use of lawyer re-
sources: incorrect assignment of
files; lawyers who “dabble” in a
new area of law will take longer
than one that is trained.
Unforeseen delays: try charging
fixed fee vs. hourly basis.
Friends of the business (FOB);
this is common amongst most
businesses.
Poor communication, ineffective
delegation and lack of accounta-
bility.
How do you identify non-billable
time? This refers to hours
spent on tasks that will im-
prove the firm’s bottom-line,
such as:
Nurturing clients; seeking new
prospects is an internal ex-
pense.
Writing articles
Invoicing & following up pay-
ments; this is not a billable
item.
Sending emails; if the client is
demanding, consider increas-
ing the fee for the project.
In a nutshell, a W-8 form is used by foreign businesses and
non-resident aliens earning income from U.S. sources. Its
purpose is mainly to let brokers and mutual fund companies
know that the person or company in question is not subject
to the usual tax withholding from investment Income. Amer-
ican citizens generally do not need to use W 8 forms, nor do
resident aliens -- instead, they would use the corresponding
W-9 form that certifies their tax identification number.
Failure to provide a W-8 form when it's required can result
in your experiencing a 30% tax withholding, and possibly
penalties on top of that.
Efficiency has become a focal point for businesses today;
there can never be too much information for your Letter of
Engagement.
Management of Billings
Additional factors to consider when drafting Letter of Engagement

3. firms to evaluate profitability.
Realization of billing rates.
Utilization of attorneys.
Leverage of lawyers.
Expense control.
Speed of billings and collections.
Realization: “How much is ultimately
collected” vs. the “effort expended”
Utilization: How timekeepers use time
on billable vs. non-billable activities.
Leverage: Ratio of associates or non-
equity partners to equity partners in
the firm.
Expense Control: A planning process
or budget that supports a firm’s goals.
Speed: Gap between time charges
incurred and date payment is re-
ceived.
Whilst you may not need to evaluate
all aspects of RULES to increase profit-
ability, you’ll notice neither is totally
independent of each other.
LAGGING KPI’s LEADING KPI’s
Fees billed in a month Number of matters opened
Hours billed Hours worked
Cash receipts Number of average days billing in lockup
Revenue per lawyer Number of matters per client; number of lawyers
billed per client; number of types of matters
billed to clients
Effective hourly rate Average fee per matter; average fee per new
matter; ratio of average billed to average worked
rate (realization)
Ian Gotts, in the March
2009 BP Trends article
spoke to leading vs. lagging
indicators. Leading indica-
tors are referred to issues
just over the horizon.
Lagging indicators measure
the results at a particular
point in the firm’s evolution.
“Things can go wrong well
before performance meas-
ure highlights lagging indi-
cators.
affect the KPI’s selection:
Transaction-focused firms vs.
relationship-focused firms.
Billable-hour-driven firms vs.
tariff-driven firms.
Firms at a growth stage vs.
firms at a succession or mature
stage.
Firm’s focused on specific cli-
ent relationships and supports
that focus with client teams;
the following KPI’s might be important in measuring breadth
of relationship;
# of matters per client as an indicator of growth in the client
relationship.
# of practice areas that serve these clients as an indicator of
cross-selling success; and
# of lawyers with time on matters connected to this client ; it
measures the breadth and depth of relationships between
firm and client. The importance a firm places on specific
KPIs can and will change over time BUT how the firm uses
them should not.
Law firms measure various
behaviours and indicators of
firm health and performance
but how do you convert these
indicators and what do you
consider when choosing KPI’s?
When choosing KPI’s the firm’s
vision and goals must be con-
sidered. It must be quantifia-
ble, AND must be the key to
the firm’s success. The nature
of your firm’s practice will also
L a w F i r m M e t r i c s
C o n v e r t i n g I n d i c a t o r s t o K P I ’ s
L a g g i n g v s . L e a d i n g I n d i c a t o r s
P a g e 3V o l u m e 1 , I s s u e 1
A financial
dashboard for
a law firm
helps to moni-
tor how you
are progress-
ing towards
your desired
objectives. But before we can select
and implement Key Performance Indi-
cators, we must identify the indicators.
The late Robert J. Arndt developed a
set of RULES in the 1990’s to enable
Leverage does ’t
ake se se if
you do ’t get
Realizaio fro
o -part ers to
o tri ute o -
ey to part ers”

4. TAKE AWAY POINTS!
 Firms do not grow by focusing
on Expenses, firms grow by fo-
cusing on Revenue.
 Key profitability drivers are
Hours, Utilization, Average bill
rate, Fee billings, Realization,
Fee receipts, A|R days outstand-
ing, WIP days outstanding and
Leverage.
 “Culture” should not be an ex-
cuse for lack of accountability.
 All Partners should be con-
cerned about collections.
 Firms with Contingent Fee Prac-
tice should have more capital.
CONTACT US
Susan O. Uylett |Founder & Chief Executive
Lynval A. McDonald | Chief Operating Officer
Tel: 876-438-7205 | 876- 431-1968
Fax: 876-988-1448
Email | intldebtrw@gmail.com
Website|http://intldebtrw.wix.com/idrw
International Debt Recovery Workforce was conceptualized based on
the need for improved customer relations, where delinquency is con-
cerned. With over ten years of experience in the areas of Receivables
Management, Debt Collection and Client Relationship Management,
we are prepared to tackle the nuances in recovering your debts, in a
timely manner and within the legislative laws of the industry.
We launched our business to the public on May 30, 2015 with five
professionals – all hired for a specific combination of skills, education
and experience, which will assure that all are highly successful in their
positions.
You have the potential to increase your sales output by several hun-
dred percent, if you can identify what is preventing this. As an account
ages, the chances of collecting decreases dramatically and it can get
expensive to carry accounts that you are not able to collect, using
methods at your disposal. Our team’s chemistry makes us more pro-
ductive and satisfied, hence reliable work and lower turnaround peri-
od.
Take Action Now…..Call Us!
M
a n a g i n g P a r t n e r s a r e r e s p o n s i b l e f o r
s t r a t e g i c v i s i o n o f t h e f i r m a n d f o r
h o l d i n g e v e r y b o d y A C C O U N T A B L E f o r
p e r f o r m a n c e .
 It all starts with the Letter of
Engagement; communicate eve-
rything.
 Don’t run up large litigation bills
without retainers and monthly
payments from clients.
 Observe the 80|20 rule & High
value clients.
 Manage productive non-
chargeable hours.
 Centralize Billings & Collections.
 Metrics should be set, agreed
and then tracked either annually
or monthly.
Useful Ratios
 Utilization Rate = Total billable
hrs divided by Total hours.
 Average Bill Rate = Billings
divided by Billable hours.
 Time Value Added = Billable
hours times Standard Billing
Rate.
 Realization = Billings divided
by Time Value Added. If it’s
below 95%, attorneys aren’t
billing enough work OR on a
timely basis, also there is an
efficiency problem with staff.
If it is important, measure it!