Comments on: Some Thoughts on Realization http://blog.altmanweil.com/2008/09/29/some-thoughts-on-realization/ Lawyer compensation and law firm finance Thu, 09 Sep 2010 05:14:44 +0000 http://wordpress.org/?v=2.2.1 By: Christopher http://blog.altmanweil.com/2008/09/29/some-thoughts-on-realization/#comment-337 Christopher Tue, 28 Oct 2008 20:59:59 +0000 http://blog.altmanweil.com/2008/09/29/some-thoughts-on-realization/#comment-337 Although the economic analysis of this article is sound, I've found that the most difficult hurdle for increasing realization exists between the billing attorney and the client. It's easy to make a well-supported argument for reducing receivables and WIP, but it's an incredible feat to encourage an attorney to address the firm's financial expectations to the client. I've found that tenured attorneys are reluctant to discuss financial concerns with clients or even allow access to the client by responsible support staff. As a follow-up to this article, I would like to see a discussion of providing attorney incentive to talk to his client about outstanding accounts or billing frequency, and also tools the attorney may use to minimize the risk of losing a client over late invoices. Overall, however, I enjoyed this matter-of-fact discussion of realization. It should be required reading for any associate looking to climb into partnership ranks. Although the economic analysis of this article is sound, I’ve found that the most difficult hurdle for increasing realization exists between the billing attorney and the client. It’s easy to make a well-supported argument for reducing receivables and WIP, but it’s an incredible feat to encourage an attorney to address the firm’s financial expectations to the client. I’ve found that tenured attorneys are reluctant to discuss financial concerns with clients or even allow access to the client by responsible support staff. As a follow-up to this article, I would like to see a discussion of providing attorney incentive to talk to his client about outstanding accounts or billing frequency, and also tools the attorney may use to minimize the risk of losing a client over late invoices.

Overall, however, I enjoyed this matter-of-fact discussion of realization. It should be required reading for any associate looking to climb into partnership ranks.

]]> By: Timothy B. Corcoran http://blog.altmanweil.com/2008/09/29/some-thoughts-on-realization/#comment-329 Timothy B. Corcoran Wed, 01 Oct 2008 19:14:44 +0000 http://blog.altmanweil.com/2008/09/29/some-thoughts-on-realization/#comment-329 This is a helpful commentary, Jim. In my experience, an underlying factor in each of the questions is the lack of financial analysis available to make informed decisions, and even when decision-support data are available there are rarely guiding principles in use across partnerships that ensure consistent actions. Those firms that track and study, for example, discounts applied at time entry and billing will develop a more solid understanding of the costs to deliver legal services and can use this aggregate data to implement a more consistent discounting scheme. Absent this, each timekeeper or billing partner acts in isolation and this can lead to well-intentioned but misguided and dilutive financial decisions whose impact is unknowingly absorbed and subsidized by the partnership. But of all the helpful comments above, I think the most impactful area of emphasis is speed. Faster timekeeper entries lead to more timely invoices, and more timely invoices avoid client confusion over vague entries from the distant past. Clients that pay slowly deserve a phone call, and client contact of any sort is an opportunity to cherish, rather than a chore to avoid. This is a helpful commentary, Jim. In my experience, an underlying factor in each of the questions is the lack of financial analysis available to make informed decisions, and even when decision-support data are available there are rarely guiding principles in use across partnerships that ensure consistent actions. Those firms that track and study, for example, discounts applied at time entry and billing will develop a more solid understanding of the costs to deliver legal services and can use this aggregate data to implement a more consistent discounting scheme. Absent this, each timekeeper or billing partner acts in isolation and this can lead to well-intentioned but misguided and dilutive financial decisions whose impact is unknowingly absorbed and subsidized by the partnership. But of all the helpful comments above, I think the most impactful area of emphasis is speed. Faster timekeeper entries lead to more timely invoices, and more timely invoices avoid client confusion over vague entries from the distant past. Clients that pay slowly deserve a phone call, and client contact of any sort is an opportunity to cherish, rather than a chore to avoid.

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