Chris Cartrett at Aderant on how to normalise better billing processes
The global recession that we experienced a decade ago brought about disruption in many ways, not least the proliferation of new billing rules dictated by clients. Whether you call them outside counsel guidelines (OCGs), client guidelines, or just billing guidelines, the point is that the dynamics of the billable hour have changed.
Like any kind of adversity, you can fight it, complain about it, and ultimately let it define you. Or you can embrace it and say “let’s figure this out”. Aderant’s 2019 law firm leader survey on OCGs revealed that an alarming number of law firms have changed their accounting model and have just, for example, accepted the fact that the firm’s accounts receivable is only 80% collectible. In other words, they budget to write off 20% of revenue as a cost of doing business – and this is just the ‘new normal’. That’s crazy!
OCGs have become obstacles that firms are consistently tripping over. We hear things like “OCGs are too complex to manage”; “clients use them as a way to delay payment”; and “we are losing revenue trying to comply”. It sometimes sounds like many firms are giving up. If you don’t start removing these obstacles, or at least managing them, you are going to see your margins seriously injured.