Previous posts have explored payment on the lack of effect on law firm’s cost consciousness (May 4, 2005), law firms generally rejecting prompt payment discounts (Aug. 24, 2005), the logistics of earning such discounts (Aug. 27, 2005), and net 30 terms (Sept. 14, 2005).
Three additional points merit comment. Only a handful of law firm relationships – the most significant, long-term ones — justify consideration of discounts for accelerated review and payment of invoices (the saying comes to mind of “horses for courses”). Point two is that a law department might achieve the same end by negotiating a monthly retainer payment that likely covers 80 percent or so of the typical monthly billings. It is also true that law departments, despite good intentions and readily achievable savings, may not be able to push accounts payable to speed up the payment cycle.