Mid-Market Realization Trends Up With Enhancements in Billing Functions
February 9, 2023
Law.com
Types : In the News
From changing billing software to developing incentives for timely billing, midsize law firm leaders shared enhancements they made to their billing practices in recent interviews.
Midsize law firms have made enhancements to their billing and collections infrastructure in recent years. And according to realization data collected by ALM Intelligence, it appears to be paying off.
From 2020 to 2021, the average realization rate at 35 of the highest-grossing midsize law firms increased by two percentage points, from 85% to 87%, according to survey responses compiled by ALM Intelligence. While these figures might reflect a standout year for the legal industry in 2021, and while 2022’s collections and realization data remain to be seen, it’s worth considering what midsize firms have done to shore up their invoicing processes.
Leaders at Philadelphia-based Montgomery McCracken Walker & Rhoads have also made efforts to avoid the “year-end craziness” that comes with collecting a large amount of payments in the fourth quarter of each year, said Steven Pachman, the firm’s managing partner.
The firm, roughly 100 lawyers, has implemented a carrot-and-stick approach with attorneys to encourage them to make sure they’re billing their clients in a timely fashion. Pachman said this has included moving to an “incentive-based approach wherein timely billing and collection efforts are expressly tracked, recognized and rewarded” for timekeepers.
“Our pipeline is very strong for the remainder of this fiscal year. It’s as strong as it’s been in many years,” Pachman said. “Montgomery McCracken is very optimistic heading into 2023, despite widespread macroeconomic pessimism.”