Big Law's Poor Collection Hygiene
Typical to the law profession, yesterday's Law.com article "Big Law's Collections Practices Are Leaking Major Revenue" (by Ryan Harroff 8/19/25) starts out blaming clients for their cash management practices and complex billing systems. Partner rates are now a luxury good. And instead of getting what should be Tiffany’s level customer service, clients are getting blamed.
While there are rare cash management shenanigans and every department has at least one notoriously-reluctant bill reviewer, truth is that the matter management/eBilling legal tech segment with multiple well-funded players, and reams of client billing staff, paid for by law firm clients is all in response to longstanding dysfunction in firm billing practices. Legal is an outlier. There is literally no other industry on the planet that has an entire technology segment built around its billing dysfunction.
Truth is that Law Firm clients buy matter management/eBilling tools and invest in client billing staff is all in response to longstanding dysfunction in firm billing practices. Legal is an outlier. There is literally no other industry on the planet that has an entire technology segment and specialized billing team (clients providing their vendor with white glove service) built around its billing dysfunction.
In para. 12 the article gets to the root cause which is, indeed, poor billing hygiene. Let's take a look at the assertion “Schaefer said that firms regularly wind up accepting less than the total outstanding balance on a bill for a client when the end of the year rolls around and partners are looking to get paid in a timely fashion.”
Symptoms of poor billing hygiene include:
1. Late Billing: Law firm partners often complete disregard billing their clients* until after Thanksgiving when visions of bonuses start dancing in their heads. In the final 4 weeks off the year, law firms expect the client to rush process a year (or more) worth of bills, during the company year-end close and holidays, because they, the service provider, could not manage to bill within 30 days of service (this past year we had more than one firm try to submit overlooked invoices 4 years old). To add insult to injury, on the day the invoice is submitted the firm claims that client payment is “overdue.” News flash: Payment cannot be overdue on an invoice that was submitted for the first time 30 minutes ago. As Zimmerman states, “partners need to be 'held accountable' for submitting bills to clients in a timely fashion and making sure those bills are paid expeditiously.”
2. Firm Billing Team Neglect: The firm billing team is often the most neglected employee group with inadequate support and training. In 2025 there are still law firms where the billing staff not allowed to speak directly to the partner but must speak to the partner’s secretary who speaks to the partner, who tells the secretary what to say to the billing employee. That billing person is also the firm representative with whom the client often has more contact than any other firm member, including the relationship partner (who at times dismiss our inquiries re outstanding invoices with the response “Please take me off your contact list and reach out to billing@firmname.com").
We have had firms with 300% turnover in their billing staff within 12 months. Who is bearing the brunt of training cost for the new billing contact submitting those invoices? The client is. The client hires full time staff, outside of their accounting departments, to train and support their legal service providers’ billing departments. It's a full-time function in law department operations.
3. After-the-Fact Rates Submission: What law firm hand-wringing attorney doing renos on their summer home would allow the general contractor to submit his bill after the house was built without having discussed rates in advance? Yet, every day we deal with law firms engaged on a matter that can’t submit their invoice because they have never submitted their rates and expect the client to pay -without question or review- whatever they submit once the work is complete.
4. Lack of Project Management: If rates and matter staffing are negotiated up front with the client, and you engage project management principals to eliminate wasted or duplicate work, then the firm significantly reduces** writing time off the bill before sending it out. If your law firm is writing off time before submitting the bill to the client that is a BIG BROADWAY MARQUEE SIGN that your project management is not up to snuff. Don’t ignore it.
It's a long standing problem. My dad had his first firm go under in part due to a handful of partners not getting their bills out. It gave him a jolt. He reformed his firm management practices and became one of the first in the country to teach the business of law in a law school (Emory). He was an expert witness in the demise of Howrey and Dewey & LeBouef. I grew up hearing these cautionary tales. It galvanized me to join the legal operations profession. And it is galling to me that here we are nearly 20 years later, with the same old, same old.
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*A decade or so back one study showed that timekeepers who waited more tan 3 days to record their time inflated their work hours by up to 30%.
** The word choice "significantly reduced" instead of "eliminated" is because another article in Law.com today talks about a firm expecting associates to have 2400 productive hours per year. At that level you have to expect that not every hour booked is a productive one.