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When the partners at a law firm realized that they were unclear how money was flowing into and out of their company, they brought me on to visualize the various elements of the process and look for efficiencies. We discovered that their invoicing process had some low hanging fruit. With a few tweaks, we generated more efficient invoices that saved the partners several hours each every month.
Watch the video or read the full case study below to learn more. And remember that this was only one area of savings we uncovered over the course of the project!
About a year after merging two small law firms, the Partners realized that none of them were up to date on the processes their team had developed for invoicing clients. Although the Partners reviewed invoices every month, only one person actually knew how to generate them and had the full picture of the company’s finances. This was a high risk scenario where unexpected illness or departure could lead to a total breakdown of their ability to bill clients. The Partners also suspected that after two different systems had come together, the resulting process might be less efficient than it could be.
To lay the groundwork, I started by documenting the process as it currently stood and created a basic process map that outlined each step.
The invoicing cycle began and the finance person would create pre bills. The pre bills would be reviewed by a Partner and, if corrections were needed, the corrections would be made and then the invoices were generated. Partners then reviewed the invoices and if there were more corrections made, the Partners would continue to review the invoices until no more corrections were needed. At this point, the invoices would go out to clients.
On the surface, the process seemed reasonable and straightforward but there were a couple of interesting things happening. First, the pre bills were being generated for every client account. Second, post-correction reviews were being done on the entire set of invoices. This meant that the partners were spending a lot of time doing these reviews on a monthly basis – losing several hours each of billable time.
Of course, getting the invoices right is critical to building client trust, maintaining professional integrity, and operating a successful law firm. This meant that any changes we made to increase efficiency had to maintain the level of quality of the existing process.
To create a more efficient process without sacrificing quality, we made a few changes that appeared, at first blush, to make the picture more complicated but actually saved several partner hours each month.
We started by adjusting the pre bills to be generated. Pre bills were difficult to read and had been created solely as a mechanism created to give the Partners a chance to review the invoicing amounts before the system initiated any transfers from trust accounts (what I will call “Type A” accounts). This meant that only a handful of accounts benefited from having pre bills but the Partners were struggling through a huge pile of these documents each month.
By only generating the pre bills for the “Type A” accounts, the Partners were able to reduce the amount of their time pouring into this step and focus that energy where it was actually needed.
Later in the process, we continued to have the Partners do a full review of all invoices before any were sent out but we also changed how corrections were made and reviewed. In the new process, after the initial review, Partners would only re-review the invoices where changes had been made.
Just like before, the cycle would repeat until there were no corrections needed but each review pass took substantially less time than when Partners were being handed hundreds of pages of invoices to search out the few adjustments.
At the close of the project, the Partners understood how invoices were being generated and had documentation that could guide another team member through the invoicing cycle if necessary. This substantially reduced the risk to the firm.
We also achieved an immediate boost to profitability. Our changes to the pre bill procedures saved about an hour of Partner time for each Partner ever month. The revisions to the post-correction review saved at least one more hour per Partner per month, and sometimes as many as three or four hours in a single invoicing cycle.
Want to learn more about process mapping can take a law firm beyond efficient invoices? Check out our case study that explores process maps as training documents: Process Maps for a Law Firm.