Podcast: Play in new window | Download (Duration: 34:35 — 31.8MB) | Embed
Subscribe or Follow RSS | More
“Someone in your office is stealing from you. They may not be stealing money and putting it into their own pocket, but they’re stealing time. They’re giving away work for free.” – RJon Robins, author of Profit First for Lawyers
Many law firm owners focus on generating new business, increasing billable hours, and growing revenue. But bringing business into the firm is only part of what makes a law firm profitable.
Have the Hard Conversations
In this episode, Jose Luis Perdomo, Fractional CFO at How To Manage a Small Law Firm, discusses one of the most common threats to profitability: unpaid invoices and growing accounts receivable balances. Drawing from a Chapter 14 clip by RJon Robins from Profit First for Lawyers, Jose Luis explores why outstanding balances create more than a cash flow problem. They impact:
- Attorney and staff accountability
- Client expectations
- The long-term financial health of the firm
And because collections conversations can feel uncomfortable, overdue balances are often allowed to linger while additional work continues to be performed. But every unpaid invoice that lingers as an accounts receivable balance represents labor, overhead, and resources that have already been invested. A best practice is to develop healthy collections practices long before an invoice becomes overdue. When collections become an afterthought, profitability suffers.
Creating a Healthy Sustainable Business
Every unpaid invoice tells a story. Often, that story begins long before work begins. Clear communication, well-defined expectations, replenishment policies, and accountability systems all play a role in the final outcome.
The goal is not simply to collect money that is already owed. The goal is to build systems that make timely payment the natural outcome. That prevents “free work” from becoming a common practice in your firm and collection problems before they occur. This leads to stronger cash flow, healthier profit margins, and a more sustainable business that can help even more people.
Mentioned
- Law Firm Diagnostic by How To Manage a Small Law Firm
- Business Plan worksheet
- G.A.S. Calls resource
- Chapter 14: For When You Really Take Profits Seriously
Connect
- Subscribe to the Profit First for Lawyers podcast
- Watch episodes on YouTube
- And most importantly, order your copy of Profit First for Lawyers today!