Family lawyers are all-too-familiar with the frustration of chasing late payments, negotiating payment plans and managing deferred fee arrangements. This is time that could be better spent on providing great client service and growing your firm.

To help you enhance your firm's financial health in 2024 and give you back meaningful time, we've compiled a list of practical steps you can take to increase your cash flow and see your firm prosper.

Communicate clearly and upfront

Communication is often the cause and solution to most problems.

Avoiding late payments starts with clear communication about your family law firm’s expectations. Be upfront and transparent about your firm’s payment terms, billing frequency, and the consequences for non-payment. If you need to revise your cost estimate, do so as early as possible.

When the time comes for the client to pay, take advantage of opportune moments to discuss outstanding invoices. For example, at the end of a milestone or stage, or following a successful outcome. By choosing the right moment to broach the subject, you can increase the likelihood of prompt payment.

Request funds in trust

Requesting funds in trust at the outset of the matter establishes early on that the law firm expects payment, and that the client is committed to their matter and paying their fees. You may surface concerns or payment challenges which are more helpfully dealt with sooner rather than later.

Where you do receive funds in trust, it provides significant cash flow benefits and allows for smoother financial planning and management, as family lawyers can rely on these funds to cover expenses related to client matters without having to wait for invoices to be paid.

Experiment with new communication channels

Consider experimenting with a variety of communication channels to reach out to clients about their outstanding invoices. If clients aren’t replying to email, try giving them a call or send them a text.

The SMS open rate in Australia is 94%. For comparison, the open rate for email in Australia is only 34% (Source: Esendex). Despite this, very few family law firms text their clients.

Automate your payment reminders

If you haven’t done so already, set up automated payment reminders so clients receive notifications as their payment due dates approach. Try incorporating text messages as discussed above.

This can help clients to promptly settle their bills on time without the need for manual follow-up from your team. You can also set up reminders after payment is overdue.

Just remember to stay on top of your reconciliation to avoid clients getting a reminder for an invoice they have already paid.

Send invoices more frequently

Take a look at your standard billing practices. Are there opportunities to break up payments into smaller chunks that are easier to manage for your clients? Instead of waiting for large billing cycles, you can send invoices based on milestones or when their fees reach a certain amount.

Alternatively you can send bi-weekly or monthly invoices, regardless of how many fees have been accumulated. This can help mitigate cash flow challenges associated with waiting for large billing cycles to process and reduce the risk of cash flow lulls.

Consider incentives for early payment

Consider offering incentives (rather than discounts) for early payment. This can motivate clients to prioritise settling their bills ahead of schedule.

Choose incentives that are relevant, have a high perceived value and aren’t too cumbersome for you to fulfil. For example, if your firm provides other services such as Wills & Estates, you could consider offering a complimentary review of a client’s will. This may also lead to a discussion about additional work. If you don’t provide other services, it would be a helpful resource for clients going through separation or divorce.

Partner with a family law finance provider to give clients to ability to “pay at settlement”, at no cost to your family law firm

Family law finance providers such as JustFund offer eligible clients a line of credit to cover their legal expenses, including disbursements. This provides relief to clients by allowing them to pay when they settle their matter, whilst also helping your firm to get paid quickly.

Offering flexible payment options sets your firm apart from its competitors and can improve the experience for your clients.

How JustFund can help your firm

• Boost cash flow — With JustFund, you can provide clients with a line of credit to pay their legal bills and disbursements on time. This provides clients with the flexibility to manage their payments more effectively and can expedite the payment process for your firm.
  
  
• Accept more clients — On top of significantly improving cash flow, you’ll also be able to accept more clients who previously did not have the resources to engage your services.
  
  
• Strengthen client relationships — By removing financial stress and giving you back time, you can invest more time building meaningful relationships with clients and achieving successful outcomes.

Founded and operated by lawyers, JustFund takes a more flexible, “family law approach” to funding. Family lawyers do not need to complete lengthy case summaries in support of their client's application, and the online application process is simple, the team is responsive and they make fast funding decisions.

If you’re looking to improve your cash flow and grow your family law practice in 2024, visit www.justfund.com.au or email jack@justfund.com.au to become an accredited law firm.