Proctor : October 2016
54 PROCTOR | October 2016 The matter and the money How to talk confidently and concurrently about both The essence of ‘Getting paid: Start with file opening’ was that responsibility for slow or poor payment by clients rests mainly with producers and principals. In fact, we observed that only two out of 16 causes were down to the client. We then proposed some simple steps that should always lead to improvement. And yet, even in firms that work hard on building structure and rules around credit control, we continually run into producers who are really challenged by talking with clients about money. While there are signs of improvement, many firms still don’t quite get the balance right. They put effort into rules, policies and follow- up, but little into training and coaching in better conversations. Which leads into the purpose of this article... We think that we’ve pretty much nailed why many producers don’t do money conversations well. Money conversations aren’t what I’m here for Firstly, they avoid them. They do this because they see matter conversations as normal. It’s what they are trained in. And mostly, if they are reasonably confident/competent with the particular law, there is little to fear. But money conversations are different. They can involve higher risks and greater potential for conflict. They aren’t seen as normal. They aren’t seen as a key part of what I’m here for. And if producers hold out for long enough, they can actually make these conversations the credit controller’s problem rather than their own. And that’s the problem. So our first challenge is to coach/train our producers to see money and matter as important parts of the one conversation – that is, treating both as normal. Interestingly, clients have much the same feelings. Mostly, they like talking with their responsible lawyer about their matter. That’s normal. But when they get phone calls from a stranger they’ve never met demanding payment for outstanding invoices, that’s not normal and is often uncomfortable. So if we can train our producers and our clients that talking about matter and money concurrently is normal, then we can kill two birds with one stone. Everyone just accepts it as the way things are. And remember, who is a client most likely to be guided by about money? The person who they trust to run their matter. It’s not only the best approach; it’s also the easiest approach. Exactly how am I supposed to do this? The second reason for underperformance in money conversations is the lack of a robust framework that producers can rely on to help them get the job done. As mediators are wont to say – if all else fails, trust the process. PRELACS We recommend an approach called PRELACS. It’s a standard process to follow when looking to extract commitment from clients regarding payment. It doesn’t matter whether you’re talking about unpaid past accounts, or payments in anticipation of future costs; it’s all the same using PRELACS. We are also presuming here that these guidelines are directed at the lawyer responsible, but working with agreed money management delegation from the partner. P=plan Firstly, if you are working on a matter regularly, you should be right across the essence of the fees agreement, particularly if you weren’t the person who did the deal. Before ringing your client about the matter, go through their accounting information in your practice management system and know what is going on. At a minimum, you should be across unpaid invoices, current WIP, the likely next steps on the matter, and any additional money due in trust. Ideally, you should also be across the whole of client financial relationship – in other words, do the payment issues relate to more than one matter? If so, talk with a partner and develop an agreed plan of attack. Important: Detail is king. If you are going to talk about money, you need to be highly specific about invoice numbers, actual amounts, dates issued, and even be able to email copies through instantly if required. Being very specific means you mean business. Being vague gives your client excuses to avoid doing anything. R=ring Yes, ring. Don’t email. Don’t text. Email and texts are too easily ignored. The good thing about ringing is that you can engage with your client on a two-way basis. Moreover, you have them captive unless they are rude enough to hang up. It is very hard for people to stonewall in a phone conversation – provided you have planned well. Remember also that if you have planned your conversation well, you will start positively about the matter and then seamlessly slide into ‘Now Geoff, while I’ve got you on the phone, we need to work out how we can tidy up a couple of your unpaid invoices... I’ll just take you through them...’.