Legal Research

"What Every Lawyer Needs to Know about Project Management, Part 3 of 5"

How to Reduce Write-Offs

This post was written by Jim Hassett: "Another best practice discussed in our project management workshop at Warner Norcross & Judd was just as simple and even more likely to quickly impact the bottom line: "Hold difficult conversations before money is spent, not after."

Anyone who has been involved with law firm finances knows the importance of the realization rate, the percentage of billable time that is paid for by clients.  The precise definition of which hours are included and excluded from the realization rate varies a bit from firm to firm.  The calculation typically includes work that was completed but never billed (such as a junior associate running wild on a research assignment; the relationship partner might never bill the client for that work), and expenses that were billed but not paid.  Unpaid bills may be classified as post-facto discounts, write offs, or bad debts.  But whatever you call them, they reflect lost income, which could have gone directly to the bottom line.

There are many reasons write-offs occur, but poor communication is frequently the key..."

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Source: Legal Business Development, 7 April 2010, reproduced with permission of the author

Full post as published by Stark County Law Library Blawg on April 08, 2010 (boomark / email).