Receivable Collection Cycles With Clients Lengthened During The First Half Of 2019.
In an August 21, 2019 article by Debra Cassens Weiss on ABA’s on-line journal, she reports on the results of a Citi Private Bank’s Law Firm Group’s survey of 191 U.S. firms, ranging from top-grossing to boutique firms.
Although the polled law firms’ revenues grew 4.1% in the first half of 2019 (mainly due to billing rate growth of 4.6%), expenses also grew 5.9%. That meant that the increase in expenses—mainly, 7.3% jumps in lawyer compensation—exceeded the revenue growth. The survey also noted that collection cycles lengthened by 1.6% for clients. The report cited e-billing systems and greater scrutiny of bills, with some clients unilaterally changing payment terms, as driving the receivable collection “lag.”