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‘To grow, you need to invest’
For law firms, having good cash flow is “critical” – especially for firms that want to continually grow and improve, according to this director.
Lauren Croft
Miki Simonovski is the founder and director of FeeSynergy. Speaking on a recent episode of The Lawyers Weekly Show, produced in partnership with FeeSynergy, he discussed how cash flow software can enhance a legal practice and why a client-centric approach is important.
“We all know that cost-of-living pressures that we keep hearing about, interest rates and so forth, and they’re not going to ease up anytime soon. So, it’s relevant today, but it’s equally relevant at all times for any business and legal firm. At the end of the day, they’re a business too, and so they need to ensure that they’ve got an efficient cash flow cycle occurring for their business, and there are various things that firms can do to make that possible for them.
“And really, I think it starts with making it simple for your clients, making it convenient for your clients, or don’t make it hard for your clients to pay you, which, unfortunately, a lot of firms do. They just don’t know it. Most firms will actually not have spelled out a crystal-clear due date on the invoice. They’ll have references to payment terms and so forth,” Simonovski said.
“You’d think in this day and age, it would be simple for a client to pay online. Well, it’s far from the case. We’ve done quite a bit of research, obviously, in this space. So, it might surprise you and others to know that only about 15 per cent of legal firms in Australia have got the ability for their clients to pay through their website using a card payment mechanism.”
Moreover, around 70 per cent of card transactions that FeeSynergy enables come in after 7:00pm at night, as the website is 24/7 – and Simonovski said that every firm should have something like this in place to avoid headaches for themselves.
“Anyone in a practice management type role, a general manager role, a financial controller CFO type role in any legal practice should have it on their top half dozen things to do because they’re easy gains. And if you don’t have these relatively easy wins in place, then you’re just making life harder for yourself,” he said.
“What do every client of a legal firm have in common? That’s the question I pose to partners when I’m sitting in front of them, and they ponder that for a second or two. My world is all about payments and cash flow. And when I pose that question, really what I’m saying to the firm is every client of yours, the one thing they’ve got in common is you’ll do work for them, and then they need to pay you. If we start with that premise, it’s really easy. Let’s make that thing that’s common to every one of our clients as efficient as possible for them and for the firm.”
As such, cash flow for law firms is “critical” at a basic level, emphasised Simonovski.
“It’s the money coming in that enables you to pay your expenses on a timely basis. Those expenses better be rent or the important ones, being paying your staff on time. That goes without saying. But then beyond that, beyond the basics, it’s that every firm wants to grow. And to grow, you need to invest. And to invest, you need cash flow; you need extra on top of the expenses to be able to then go, well, we want to buy this new system, or we want to do some renovations to the office or take up a bigger office, or even buy the firm down the road out,” he said.
“That requires cash flow and/or buying technology, hardware and so forth. That all requires cash flow. You improve your cash flow, you improve your opportunities to improve your business and grow your business.”
Having this kind of tech or software in place can also help firms prioritise a client-centric approach and improve themselves moving forward.
“When a client is paying, that’s ultimately the end of that matter, that transaction, typically and so forth. So, what better opportunity [is there] to get honest feedback from your clients? How did we go? Did we perform to expectations? Are there any areas that we could have improved? And really important, probably the most important of all, is would you recommend us to others that you know?” Simonovski said.
“So, there are various platforms and tools and survey-type approaches that firms can take, and I would encourage all firms to do something around that. And how else can you improve if you don’t know where you’re at?”
The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Miki Simonovski, click below:
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
