Optimising cash flow management for law firms
A seamless cash flow is of paramount importance for law firms, as they receive 80 percent of their revenue from 20 percent of clients. These firms are the source of recurring revenue, and hence, retaining such clients in the long run is vital for legal organizations. However, due to various constraints such as an increase in the credit line, delay in payments, bill disputes raised by customers, and similar discrepancies, account receivables (AR) become overdue and the cash flow gets disrupted. As a result, a team of 20 to 30 employees is dedicated to increasing the collection rate by resolving the point of contention between clients and attorneys, especially in the case of disagreements with legal bills. To address such challenges, MiniSoft, developed a solution that focuses on enhancing the workflow of law firms and assisting them in increasing collection rate.
MiniSoft offers a collection platform—ARCS—stacked with numerous features to help law firms track interactions carried out between attorneys and clients effectively, while taking into account the corresponding bills that are generated during the process. Further, these attorneys get to review the notices and cater to changes made within them, correlating to the agreements made with the clients. This helps organizations to keep track of outbound statements, attorney approval processes, telephone calls, document dialogues, and payment plans. “We can increase the collection rate of a law firm by a scale of 10 to 20 percent,” adds Ted Davault, president of MiniSoft. In addition, MiniSoft’s platform provides real-time cash flow forecasting and management, along with comparative analytics to visualize the workflows and related statistics.
We can increase the collection rate of a law firm by a scale of 10 to 20 percent.
With dynamic shift in the legal industry, MiniSoft consistently enhances its platform and assists organizations in maintaining financial diligence. Due to the nebulous nature of the legal operations, law firms often fail to collect the payments that get billed through various processes. As a result, banks have tightened up their credit line, which has led to a staggering number of companies becoming bankrupt. This has reinforced the need to maximize the collection of outbound invoices and cash flow forecasting and management processes, as they need to rely on operating funds for disbursements. Thus, these firms need to envision what their cash receipt could potentially look like on a monthly, quarterly, and yearly basis. Foreseeing such numbers becomes a challenge as billing operations are carried out depending on the variabilities associated with attorney practices and clients’ needs. “MiniSoft is uniquely positioned to analyze and forecast the cash flow due to their integration with all major legal billing systems,” says Davault.
MiniSoft has taken great strides in cash flow management, and they can be best illustrated with client success stories. One of these stories shed light on resolving hindrances among law firms in the UK that struggled in realizing and collecting their receivables. To improve the collections after the billing processes, MiniSoft’s client was required to follow up on legal communications and reminder notices efficiently. Contrastingly, the ARs became overdue and payments were not getting collected in a timely manner. Upon
implementing the ARCS, MiniSoft assisted them in increasing collections by 17 percent. Such accomplishments have earned MiniSoft a noteworthy portfolio of clients, 50 percent of which belong to the top 100 law firms in the US. In order to deliver greater value to this clientele, MiniSoft is migrating to the cloud and is committed to expand its product line with mobile connectivity, while also incorporating advanced analytics capabilities in the near future.