This week we are going to talk about "accounts receivable." Other than actually getting out a bill, accounts receivable is the most important area in the "positive cash flow" process in any law firm. You cannot talk about billing as the fourth area of the five areas that make up every business in the world without also talking about "accounts receivable."

Remember, the other four parts of every business are: "Clients" or "customers"; "Administration"; "Getting the work done"; and "Collecting."

It is probably going to take us several weeks to talk about the area of "accounts receivable." I must admit that when I talk about the topic of "accounts receivable" I get pretty excited. I want to pull out my "soap box," step right up on top, grab my megaphone and "spout off!" So, here I go.

All of the ideas you are reading in these weekly tips on law office marketing, management and economics have evolved over the last thirty-five years of my legal practice. I do not remember the first time I heard about the concept of there being roles that individual lawyers fill in law firms, but when I first heard of the concept, I said: "Wow!" The concept of lawyers having roles never really occurred to me before I heard the concept of: "there are finders, minders and grinders!" You will remember I have talked about this concept in previous articles. "Finders" are the rainmakers. "Minders" are the lawyers who handle the administrative task of bringing the business in the door and being sure that the work gets done. "Minders" are also responsible for being sure that the bill gets paid. If all you have is "finders" and "grinders" you are a malpractice claim or a disciplinary complaint looking for a place to happen or you are in the process of trying to figure out a way to go broke. "Minders" are very important in the area of "administration," "getting the work done," "billing," and "collecting."

Another way to talk about these same roles in a law firm, is to think about the lawyers in the firm as "hunters," "skinners," "cookers," and "eaters." If you are a "hunter," "skinner," or a "cooker" you are okay, but if you are only an "eater," you are very quickly going to be invited out of the law firm.

After I first heard about the concept of these roles that lawyers play in every law firm, another concept dawned on me that really became the true genesis for all these articles. I began to think about the necessary roles that needed to be played in a law firm, and the fact that most lawyers really only wanted to do one thing. As I started my own law firm and had partners and associates, it became clearer and clearer that most lawyers only want to work on legal matters. Most lawyers do not want to be "rainmakers," most lawyers do not want to handle "administrative" work, no lawyers like to "bill," and absolutely no lawyers like to try to "collect" fees. Most lawyers simply want to do legal work and show up each day and get the legal work done. Needless to say, somebody has to find a client, somebody has to do the administration, somebody has to be sure the time gets billed, and somebody absolutely needs to be sure that the bill gets paid.

Unfortunately, my observation with regard to the previous paragraph was very painful and frustrating. It appeared to me that hardly anyone that I was working with was willing to pay the price that it took to be a "rainmaker." Time away from your family, cutting into your personal time, stretching you too thin, putting you under stress; ouch! Obviously, there were some notable exceptions, but they were few and far between. I also observed that almost no lawyers really enjoyed being involved in the "administration," of the law firm. Oftentimes I found that I was the only person interested in office "systems." Everyone was always more than willing to let me do the day-to-day administration of the law firm so long as I had them give their input on items involving spending money. How surprising! When it finally dawned on me about how much time I was putting in being the "managing partner," and decided to try to share some of the duties with other lawyers, I found that quite often, those lawyers did not do what they were supposed to be doing when they were "in the barrel," as the managing partner, and therefore when it became my turn again, I now needed to do not only what normally should be done during my stint, but also what had not been done in the other lawyers' stint. Again, a frustrating and painful lesson.

The one thing most lawyers consistently seem to be at least somewhat good at it, and even proficient at, was "getting the work done."

When it came to keeping time and getting out bills, most lawyers were terrible. Oftentimes, the pre-bills would set on their desk and the final bill just did not seem to be able to get generated. If the bill got generated, it often did not get sent. If it got sent, it almost never had any cover letter of any kind with it to give any explanation to the client other than for the raw material contained in the bill. Again, I learned the hard way through the "pinch of need," how important "positive cash flow" is to a law firm.

But then came the "coup de grâce." Almost nobody and I mean nobody, seemed very interested in collecting the "accounts receivable." I remember recently stating in an article in my local bar's monthly newsletter, that I came from the "Harry Morris school of billing." Harry Morris was quite an attorney, and he was an even better business person. Every single month Harry Morris would sit every lawyer in the law firm down in the conference room and go over the "accounts receivable" list in front of everybody. He was merciless. No account went unquestioned, no lawyers excuse went unchallenged, the firm needed cash, and he was going to be "damned" if he would not put whatever Herculean effort into the task to be sure that the bills were paid. Harry Morris' monthly biting comments about "accounts receivable" were burned into my consciousness. Oh, how we all hated those meetings, oh, how we all hated to collect those "accounts receivable."

Next week I am going to expand on this topic of "accounts receivable" some more until you get the full flavor of exactly how difficult it is to train yourself to go after those "accounts receivable" and get them paid!

Talk to you next week.

Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.