In-House Counsel

Deliberately delaying payments on law firm invoices and automatic payments?

By Rees Morrison

Several managing partners at big law firms moan about the ?molasses-paced payment process? at clients. The piece in the Am. Lawyer, Vol. 30, Sept. 2008 at 33, does not distinguish between clients with a law department and clients without, but widespread deliberate delays in paying invoices appears to rankle many law firms.

I doubt that a general counsel would unilaterally slow payments to law firms from the typical 30 or 45 days to a much longer period, but the CFO might impose such a freeze to conserve cash.

Toward the end, the article adds a strange statement. "One saving grace: electronic payment processes that are now common in many major corporations.? As explained by one law firm chairman, "With electronic payment systems, you submit a bill and it pays it in a specific time.? I do not know of law departments that have agreed to pay bills automatically in a set number of days, even if they have not had a chance to review the bill.

Full post as published by Law Department Management on October 12, 2008 (boomark / email).