I’m Dan Couvrette the publisher of Family Lawyer Magazine and I’m really pleased today to be talking with Scott Clasen about a subject that I think is near and dear to the hearts of family lawyers.
That is collecting what you’ve built, and how to improve your collection rate. Scott is the Director of Marketing of TimeSolv, a company that offers legal time tracking and billing solutions that help clients earn high profits, which of course would come from collecting everything that you build. Both Scott and I are strong believers by the way that family lawyers work really hard, and they should be able to collect whatever they bill.
TimeSolv is ranked number one in legal billing software for usability and number one web-based billing solution for attorneys and other professionals for over 20 years. So, these guys have been at it for 20 years and Scott oversees all aspects of TimeSolv’s marketing efforts. Scott, I want to welcome you to this seminar. Thank you for your time.
Scott Clasen: Yeah, thanks, Dan. I appreciate you having me.
Great. So, I’ve heard over the past 25 years from family lawyers that there’s a significant amount that they don’t get to collect on their billing. I’ve heard 20, 25, 30% that their bills go unpaid and you’re in the business of helping attorneys track, invoice, and collect from their clients. Do you have any statistics on what is being collected or not being collected?
Scott Clasen: Well, yeah, it is very interesting, and I think somewhat surprising the volume of invoices that go out by lawyers and family lawyers are really probably no different from other practice areas in the amount that is not collected.
I know that there have been some legal trend reports that have been out there that the average is around 88% of invoices are collected that you’re leaving 12% of your revenue on the table. I think even more surprisingly we did an internal survey of our customers at TimeSolv asking them what their collection rate was and thankfully the majority of the respondents said they were collecting between 90 to a hundred percent of their invoices.
But more, I think, I don’t want to say alarmingly, was that almost 40% of our replies to that survey were that they didn’t know what their collection rate was. That’s obviously a huge issue in and of itself. Yes, maybe they are collecting 95%, maybe they are collecting 65% but if you don’t know that’s a big issue.
Right, absolutely. Well, I know having worked with family lawyers as you have that the focus of their day and their business is to take care of their clients, deal with the courts, deal with emergencies it doesn’t surprise me that they don’t have a really good handle on it which is why you and I are talking today to help them give some insights as to how they can get a better handle on it. You’ve worked with many firms what would you say their procedures were before they started working with TimeSolv? What did they have in place before they adopted the TimeSolv solution to manage the situation?
Scott Clasen: I think the best way to put it is that a lot of them are using processes that are very traditional and very dated frankly in how to collect money. The nature of the legal profession is to look backward, you look at precedent, what’s been done in the past. So, the traditional way of invoicing where you mail out an invoice when you complete all of your work and you just wait for the client to pay you. That’s a very traditional way in which we used to do business years ago, but technology has changed, and you want to be able, I think, as a forward-thinking law firm to meet your clients where they’re at, and what does that mean?
Well, it means how are you sending out the invoices to your clients? Are you still actually putting them in the mail? I mean, I’m hoping, and I know the last statistics will tell us that the vast majority of law firms are sending out invoices, at least via email. That’s one hurdle. The second hurdle is how often are you invoicing? Is there a regular cadence to when you’re sending your invoices and not just necessarily waiting until all the work is complete but billing out in increments as the work is being completed on a set schedule?
Maybe it’s the fifth and the 20th of every month or whatever that it might be or at least maybe once a month. Then the third thing is how are you actually collecting the payment. Are you accepting electronic payment? It doesn’t have to necessarily be a credit card. It can also be ACH or e-check payment. Again, that is the most convenient.
I mean, how many checks have you written in the last 18 months? I was actually just looking at my checkbook just the other day. I think I’ve written four checks in the last two years. Everything that I pay these days is the electronic version. So, you want to meet your clients where they’re at and that’s where a lot of law firms, I think, still need to pivot their process and modernize, to be honest.
So, what do you think is a good collection and an achievable collection rate? What percentage should they be shooting for?
Scott Clasen: There is no reason why you can’t collect 97% plus of the invoices that are sent out? We have firms currently on TimeSolv right now that, that is their collection rate through some of the processes that they brought to the table and some that they’ve adopted because of our features that we offer within our software.
I would imagine if they implemented your process that their clients are going to be more satisfied as well as because the clearer the process for the clients, the better it is for the clients.
Scott Clasen: Exactly. So, some of the processes that we really engage in and want firms to think about are, first of all, upfront during your intake of a new client, why don’t you collect payment information right then like a credit card number or E-bank information. Within TimeSolv you can then store that information within your client and matter files within our software. We use a couple of different payment processors that we partner with LawPay being one very, very popular. Another one LexCharge, which also integrates with several other legal tech vendors.
So, it’s being stored in their secure environment that you’re already paying for and then you have that information up front, and we feel like it’s also important to set up front during that intake what your billing cadence is going to be and that you’re going to bill out on, I use that fifth and the 20th of every month because that’s when the law firms most successfully with us. That’s when they send out their invoices every two weeks just like clockwork. They also put in their agreement during that intake, we will bill the payment method we have on file unless you have any sort of dispute with the invoice.
So, they send out the invoices. If they don’t hear from their clients within five days, then they go ahead and just run the payment on file. Now at TimeSolv, we have some unique features in that you don’t have to run those payments, one invoice at a time or one matter at a time. You can actually do it in a batch. You can select hundreds of invoices at once, click one button, and get paid for all of those invoices in a matter of seconds. Again, it becomes, for the law firm, a very predictable cash flow, you know exactly when you’re getting paid each month. It’s going to greatly reduce the invoices that aren’t getting paid because yes, at 97%, why isn’t it 100% if you have the payment method on file? Well, the credit cards, some will be expired, some will hit their credit limit, whatever the case may be.
One of the hidden benefits of this that we didn’t even think about when we implemented these features is it reduces the need on a massive scale to have to do that trust accounting. In a lot of law firms, the only reason they’re doing trust accounting is essentially its insurance to make sure they’re getting paid for their work. Some of these firms we work with now, only asked for a trust payment to hold if they feel like that their client is a credit risk.
They’ll actually do a credit check on their clients. So, they don’t even call it a trust account anymore, they call it a security deposit and they don’t tap into it at all unless the payment method that they have on file fails for whatever reason, then they at least have a backup plan to get paid for their invoices. That’s how we achieve that 97% collection rate.
Also, make it easier for clients to say yes to them because if they don’t have to put a big chunk of money down…
Scott Clasen: Right.
… it’s going to be easier for them to get, particularly in the area of family law to get the case started.
Scott Clasen: Yes, exactly. Exactly. In fact, the firm that I’m describing that has achieved this 97% they’re called Modern Family Law. They are a family law firm with multiple offices around the United States, but highly successful with this method.
Oh, fantastic. So, is this new technology that you’re talking about? You’ve been at this for 20 years, I’m imagining that you’re always improving your product and your systems.
Scott Clasen: Yeah. The ability to actually store the payment information has essentially always been there with LawPay and some of the others but it’s now the integration with a vendor like ourselves, where you can enter that information within TimeSolv, you can then run a payment from TimeSolv. That invoice then is automatically marked paid. In some ways this method has been around but never really connected in the way that I feel like that we’ve connected it in that previous to what we just built out within the last year, yes, you could do what I just described, but it would take multiple steps within multiple software platforms.
Now you can just do it within our particular platform and especially the ability to do it in a batch, where you can, as I described, select dozens, hundreds of invoices, click one button, and get paid for all of them at once. That’s a massive saving in time for your billing manager going from, again, this example of this law firm was they send out 300 invoices a month. To one at a time go through each invoice and hit pay, pay, pay, pay, even when you have the payment method on file, that still just takes time. So, the ability to do that in bulk is definitely new technology that no other time and billing vendor can offer at this point.
Can a firm try out TimeSolv to see how it works without committing 100% percent and changing their old system over? Is there a trial or something?
Scott Clasen: Yeah, absolutely. You can start a 30-day free trial, one full month of using TimeSolv for free. We’ll do all of the training, get you up and running. What a lot of law firms will do is they’ll run a client or matter or two within TimeSolv in parallel with their existing system to sort of see how it matches up to what they’re currently doing. Oftentimes they will find that it can be much more efficient in not only how we track their time and how they generate their invoices, but of course now how you get paid for those invoices using our product versus the current methodology you may have in place.
I know changing any system is challenging for all of us, but you guys must have figured it out 20 over the years and figured out how to walk people through the process when they finally do decide to go with your program and also integrate it, you mentioned LawPay and other programs like that. Tell me a little bit about what you guys have learned over the years and how you can really hand-hold people through the process because it is challenging.
Scott Clasen: It is challenging. We fully understand that for a couple of reasons, there are a couple of ways in which we handle that.
(a) Are essentially account executives, the people you’ll be working with came from law firms.
So, they know what they’re doing when it comes to legal billing and they can really walk the walk and not just talk the talk.
(b) We also know how important it is when it comes to converting data because obviously unless you are a brand-new firm starting fresh, you have data that’s moving from somewhere.
So, we do a lot of handholding. We have a full data conversion team that will work with you to make sure that all the relevant information you need is moved into your new product with Time Solv. Then we include all the training. We will sit you down, we’ll train you how to run everything as an administrator. If you’re just a timekeeper, how do you enter your time quickly and efficiently? All of that is included with the TimeSolv subscription when you pay for it. So, we do know how important it is.
We’ll even assist you the first few months in getting out your invoices. It’s that first big billing day, the first time in TimeSolv. If you’re nervous, if you want to make sure you’re doing it right, we will get on a call with you. We will do a screen share and we’ll walk you through how to do it to make sure you feel comfortable because, at the end of the day, we’re in business to make sure that your business is running smoothly, efficiently, and maximizing the revenues you should be getting. So, your success is our success, and we want to help you get there.
Scott, I see you at the family law conferences, you and your associates, and I can tell the people who are watching this that your booth is always the busiest booth that I see there. I think it has to do with the care and attention and real passion that you guys have for making a difference for lawyers. Of course, the people that are watching this are more likely family lawyers. I think it’s pretty important that it’s not just a product, that it is a caring group of individuals behind that product who are there to help you whenever you need the help. So, I can say from my experience of knowing you and knowing your firm a bit that I think they will get that from TimeSolv for sure.
Scott Clasen: And free chocolate. That’s another reason our booth is so popular. You will get great chocolate that we hand out.
That will do it too. Scott, I want to thank you for taking the time today. Scott, of course, is from TimeSolv. You can see their website address here. I highly recommend that you check out their website, give Scott and his team a call and they gladly show you their product, walk you through it, get you set up for a trial if that’s what you want to do. Thanks again, Scott, for taking the time. I hope that the lawyers got some value out of this conversation.
Scott Clasen: Thanks, Dan. I appreciate you letting me come on here and talk about it. Yes, we are passionate about helping lawyers, family lawyers specifically, to be successful in running their business. Thank you.
Scott Clasen oversees all aspects of TimeSolv’s marketing efforts. With 20+ years of marketing experience, he has seen the full transition to the digital age. www.timesolv.com
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