Unbiased Thinking: A Blueprint for Your Law Firm Billing & Collections Transformation

In our experience, we find that law firms generally experience a similar set of common challenges and costs tied to inefficient billing and collections practices. These can be quite significant — at some firms, we have seen profitability drag exceeding 6%.

This is a cost no firm can afford; and to that end, the following offers a blueprint for how Unbiased Consulting advises clients when they wish to transform billing and collections. Our advice focuses on four “Invoice to Cash” opportunity areas:

  • process consistency and accountability;
  • resource management and efficiency;
  • financial control and reporting; and,
  • technology tools, integrations, and automation.

Resource Management and Efficiency
Resource management and efficiency issues all relate to how firms allocate, coordinate, and manage staff responsible for billing and collections. Problems and challenges that arise often include: poor firm-wide recovery rates or even resource-level issues where realization achieved by specific individuals is too low compared to firm benchmarks, or something there is a skill or experience gap.

These issues spill over to other problems like over-resourcing and excessive compensation. Over-resourcing is very common. We often see situations in which headcount far exceeds typical industry practices, resulting in overspending. At one client law firm, we observed an astonishing 4X staff overage ratio, compared to comparable environments.

Resource Efficiency

Excessive compensation occurs when firms are unaware of industry compensation benchmarks. While billing and collections resources are highly-skilled, compensation levels that greatly exceed industry norms present clear opportunities for proactive cost reduction. We have seen compensation exceeding industry compensation benchmarks by 25% or more. The key is to drive the model of “right task, right skill”, where firms assign responsibility to the lowest cost resources who can appropriately perform the work.

Process Consistency and Accountability
Law firms need to review how processes are defined in theory versus carried out in practice— as there is often a gap. Problems and challenges often span inconsistent staff responsibilities and/or accountabilities, inconsistent standard processes, inconsistent time capture, and client retainer issues. Identification of opportunities in these areas can result in improved spend and efficiency outcomes.

Financial Control and Reporting
Visibility is critical to understanding what staff are doing, how processes are being executed, and to evaluate overall billing and collections effectiveness. We frequently find a lack of standard, documented, standard operating procedures (SOPs) and often find that procedures are antiquated, stale and/or incomplete.

Firms should measure, report on and evaluate critical metrics such as high collections and billing issues, inaccuracies, billing and payment delays and the rate and dollars attributed to write-downs and write-offs.

Write-downs and write-offs offer a material opportunity for improvement. Law firms must better educate lawyers on how to better set and reset client expectations to avoid this prevalent and widely experienced area of profit leakage. Relatedly, firms must analyze data to identify the reasons for write-down and write-off issues. Reasons behind the adjustments often include late identification, delays in follow-ups, lawyer delays, and issues in identifying scope changes or work overages.

Near or real time reporting is critical to this improvement opportunity. We encourage law firms to understand and define performance benchmarks and standards. Too often, firms do not define or evaluate these metrics, manage escalations, and/or identify areas for policy and process improvement. Similarly, metrics on billing adjustments are critical to understanding overall billing and collections health and effectiveness.

Technology Tools, Integrations, and Automation
Law firms have suffered from a gap in industry available automated solutions/software to track, structure and manage invoice to cash workflows. There has not been a solid software and tracking platform to fully manage the complex workflow and lifecycles, until recently.


Without modern, integrated automation, law firms experience more problems, suffer greater inefficiencies, and are constantly fighting invoice to cash issues and client escalations. Historically, law firms select and leverage software “point solutions.” These solutions are often inconsistent and disaggregated, causing great disruption to billing and collections. In fact, if the law firm does not use integrated tools, data flows, workflow execution, or reporting, the overall process is typically far from optimized and efficient. The result – significant non-value added time to be spent by law firms, inclusive of unnecessary overhead, increased resource and operating costs, greater time delay and higher risk.

A priority has to be to provide billing lawyers and operational leaders with automation, reports and data on key metrics, including billing and collections activity, status and collections forecasts. Collections results and outcomes hang in the balance.

Exploring Emerging Technology Innovation
We are currently tracking and are enthusiastic about the emergence of a new class of “Invoice to Cash” software applications, purpose-built to manage the end-to-end process of bill creation, delivery, and collections.
This automation, which integrates existing law firm finance/accounting software, provides new functional capabilities, contemporary automation, and modern reporting tools, enables a unified approach to invoice-to-cash workflow management, previously unattainable.

Unbiased Consulting, via its work with hundreds of law firms, recommends that firms perform a current state market assessment of this recently upgraded revenue capture opportunity. We know that an initiative to review market automation, while sharing and discussing your internal invoice-to-cash practices, challenges, and opportunities, will cause great things to happen.

This article originally appeared in LJN’s Accounting and Financial Planning for Law Firms on May 1, 2024.