An average legal practice has 12% of accounts receivable due for over 120 days.
Your office doesn’t have to be one.
Like any business — small or large, attorneys are also likely to feel the pain of missed payments at some point in time. The loss may vary, but failure to recover lost dollars can add up and significantly impact their revenue.
Legal offices should follow a fair but aggressive way to recover missing payments. But not at the cost of affecting their relationship with clients!
So what should you do to collect outstanding legal payments without damaging your reputation among clients?
Thinking of outsourcing to a debt collection agency?
(WHO MAY NOT EVEN HAVE TRAINED EMPLOYEES)
Think twice!
While hiring a regular debt collection agency might seem like a go-to option, it might not be the ideal choice for your legal practice. Overly aggressive and money-minded collection agencies may use some tactics that can ruin your reputation and sabotage your relationship with your clients.
You lose returning or loyal clients when you let a collection agency take over the conversation.
Why are traditional debt collection practices not relevant to your law office anymore?
A heavy-handed approach
Third-party collection agencies can follow an aggressive approach, like constantly calling your clients to annoy, abuse, embarrass, or harass them. Such practices, which are not in your control, are not healthy for your reputation. You may even lose your clients since the agency represents your business.
The cost involved
Depending on how much debt you need help with and how old the missing payments are, collection agencies can charge somewhere between 20% to 50% of your collections.
Quite an amount + the risk of degrading your reputation!
Account prioritization
Collection agencies consider various factors while prioritizing debt accounts. Your law office may need to recover outstanding payments to keep the business afloat, but perhaps your account is not even on their priority list.
Clients can resent your business
Your clients may be willing to pay for the services performed but they can’t afford them due to some contingencies. What should you do in such a situation? Hand over the sensitive matter to a third-party collection agency only to harass your clients and lose them forever? This is the last thing you want – to be associated with an agency that may unnecessarily bully your clients or push legal boundaries.
So is there a better way to collect missing legal payments and still win your clients’ trust?
Why not use a debt collection software system?
Using an automated system for legal collections can help your practice collect the owed amount faster, increase efficiency, and improve profitability while maintaining good relationships with your clients.
The best thing is – a system never sleeps, forgets, or has bad days!
- A system can handle the entire debt collection process when you’re busy offering legal services.
- It improves operations efficiency by ensuring excellent coverage and higher connect rates.
- For the system, you are always the only priority.
No client embarrassment
No human involvement during the collection process means no embarrassment and pressure to pay the debt. Getting a courtesy payment reminder with flexible payment plans can help your clients pay the outstanding amount according to their circumstances & affordability.
Avoid client confrontation
With no one to confront about the debt, clients can think calmly and evaluate the outstanding payment they owe to you logically. Cooler heads usually bring positive responses, and clients tend to pay as long as they are reminded consistently & subtly.
Eliminates the need for haggling
When the system sends a documented invoice, there are fewer to no chances of negotiation. As you give flexible options to pay for the missing legal payments, clients agree easily and gradually; your bad debt is recovered without impacting the business-client relationship.
Denefits AR – Making debt recovery easy, efficient, and client-centric
Denefits Automated Accounts Receivable is simple and efficient. It focuses on minimizing the DSO – Days Sales Outstanding and processing costs while maintaining healthy relationships with your clients.
There‘s no additional fee for your legal office to use this feature and you can easily track payments made by clients.
Sounds great?
There’s more.
Clients receive the invoice, allowing them to pay all at once or start a payment plan, thanks to flexible legal financing, to afford the outstanding debt. You also get an option to split the transaction fee if you want.
It takes less than 30 seconds to send an invoice to your clients. They will receive a payment link by email or text with the invoice.
Your clients can review the details from the comfort of their homes and make the payment at their convenience from any device. The system will then continue to send reminders until your client makes the payment. Using the Accounts Receivable option, you won’t have to print or mail out a bill, and you’ll receive your payments – a greener and faster way to collect outstanding legal payments.
To learn more:
Free up your time for other important tasks!
Denefits will take care of ARs for your legal office.
Let the Denefits AR system take the burden off your shoulders and collect your written-off amount while you focus on helping your clients and winning their cases.
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