Professional services
Law Firm Collection Rate Calculator
How much of what you invoice is actually collected, and what the lag costs.
Result
Business arithmetic for running a practice, not legal advice. Fee agreements, contingency limits, trust accounting and fee splitting are governed by the rules of professional conduct in your jurisdiction, and several of them are strict. Check the applicable rules before any of this affects a client agreement. Late invoicing causes more late payment than unwilling clients do. Trust accounting rules are strict about how retainers are held and applied, and evergreen retainers, which replenish as they are drawn down, are the most reliable structure where the rules and the client permit them.
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About this calculator
What is the fastest way to improve collection?
Bill promptly and consistently. An invoice sent six weeks after the work is far harder to collect than one sent the same month, because the value has faded in the client's memory.
Should I take retainers?
Where the rules of your jurisdiction and the matter type allow, an evergreen retainer largely removes the collection problem. Trust accounting requirements around them are strict and worth getting right.
The formula
collection rate = collected / invoiced; days outstanding = receivables / daily invoicing
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