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It's already clear that the COVID-19 pandemic will take a serious toll on the economy. And as law firms adapt to social distancing and quarantine, now might also be the time to find new ways to get paid.
Collection rates for law firms in 2019 averaged around 86%, but they vary by practice area. Areas often covered by solo/small practices have even lower collection rates, such as:
That means these attorneys are missing out on 17-28% of their fees.
Many law firms report that the main reason clients don't pay their bills is that they cannot afford to pay upfront. So, while there are arguments to be made for the "don't work if you're not getting paid" mindset - now might be the time to find some middle ground.
Just like accepting credit cards, offering payment plans can help attract new clients who are nervous about the cost of hiring an attorney. It also takes the pressure off of those who are facing financial hardship due to the coronavirus. Not to mention, you'll likely spend less time chasing down payments if clients are making smaller installments regularly.
To give clients an incentive to pay their bill early, you can offer a small discount (say, 2%) or free service (where appropriate). When someone feels they have something to gain by paying off debt faster, they will.
Of course, not every client is a good candidate for a payment plan. If you decide to offer such an arrangement, it's important to utilize some type of credit check. But with the future as uncertain as it is right now, knowing at least part of a bill is coming is better than the risk of not getting paid at all.