A post on morepartnerincom.com (Aug. 1, 2005), a site hosted by JURIS, which offers a leading law-firm time and billing system, pulls aside the curtain. On average, law firms “take 78 days just to bill for work performed, [and] the typical firm takes 60 additional days to collect once they have finally mailed a bill to a client.”
If a partner bills 8 hours on January 1st, the firm deposits the check for that work on average the first week of June! Worse, “the typical law firm has an overall realization rate around 92%,” which means sometimes June’s check has a bite out if it. A law department offering to speed up that turnaround time might find itself saving money. (For more lessons from law firms, see my post of July 20, 2005 on law firm billing and July 30, 2005 on billing rates.)