Cash Is King

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Attorneys are notoriously bad at managing cash flow.

Keep in mind there is nothing more important (from a business perspective) than making sure the money passes from your client’s hands to yours.

I am regularly astonished when attorneys complain to me about cash flow and collections issues.  The reason for my astonishment:  You control when the work begins.

Just in case you are completely out of ideas on this front, I am here to help bring things into focus.

Here are four ways lawyers can immediately improve cash flow:

Ask for Payment Up Front

Simple enough.  Get paid before you start the work.  Yeah.  I know.  Your competitors, your brother-in-law, your friends, all offer billing terms.

That’s fine for them.

You manage your law firm.  Do not do any work at all without money in the bank.  It’s as simple as that.

Refuse to accept any clients who cannot give you at least a portion of the money in advance.

Think about it. You don’t go to the movies and pay after the show if you like the film.

Raise Your Prices

You provide more value to your clients than you realize.

List the negative things that could happen to your client if you weren’t in the picture.  List all the things you are going to do to prevent these things from happening.  List the five best outcomes you have had, on behalf of your clients, in the past 18 months.  Reflect on this list for at least an hour.

Throw the lists away and immediately begin asking for 25% more than you have been changing.

Now that you understand the value you provide to your clients, focus your time and energy on demonstrating the benefits of working with you.

Target Better Clients

Not all clients are created equal.  Focus your time, energy and marketing dollars on the clients who provide you with the highest return on your time investment.  A client who is responsive and engaged in working with you is not only a pleasure but he/she values and appreciates you.

Better clients can often pay higher fees and will pay your fee upfront without hesitation.

Think About Lifetime Value

Clients who (and referral sources that) provide you with repeat and reoccurring work are more valuable to you than those who come to you with ad-hoc engagements.  Spend your time and money interacting with people who have high lifetime value.  These people are more likely to deliver work to your doorstep when times are tough.

Don’t blame the economy.  You create your own reality. Work with clients who pay and who will pay up front.

Remember:  Cash is king.  Without it your kingdom will starve. Think about that during the client selection process.

Side Note:

I have a new website dedicated to helping business leaders and professionals make a great living and live a great life®.  Each week I’m going to share some resources from that website with you.  You can still visit me at http://www.RainmakerLawyer.com  but I am not also offering unique educational content for lawyers at http://www.Valtimax.com

Here are some other Resources You Will Find Useful:

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