In a large real estate law firm, matters of finances, operations, and staffing are generally managed with minimal input from attorneys. For an attorney who's made the decision to practice alone, or for attorneys in a smaller practice, a solid grasp of business administration is needed. Accounting, pricing, and other financial matters are areas in which every member of the team can make a positive contribution. Bellingham, MA CPA  Ann Irons, who works alongside several real estate law practitioners, shares her insights.

Pro Bono Without Purpose

Pro bono casework is inevitable at some point, especially for recent law school grads and newly solo attorneys. Unfortunately, many lawyers commit to pro bono work as a short-term solution, failing to realize that doing so doesn't always generate the future profits they'd envisioned. Business development, not a heavy pro bono caseload, is the answer to sustainable revenues. It's true that pro bono provides some experience and exposure, but it doesn't pay the bills. And in the not-uncommon event that the case becomes more time-consuming than you'd planned, all aspects of your practice suffer. There's nothing wrong with an occasional non-paying case, but any spare time you have would be better spent on identifying and pursuing paid opportunities.

Selling Yourself and Your Services Short

You'll hear it often: Lawyers' fees are too high. When starting out, many new attorneys make the mistake of pricing their services using clients' perceptions of fairness. What others fail to realize about legal fees is that they must cover not only the lawyers' time and effort, but also the costs of running a business and the value of your services. Face it--you'll never look like a "bargain" in the eyes of your clients, not should you aspire to. A cost-leadership pricing strategy works for Wal-Mart. It doesn't work for real estate attorneys.

Offering Overly Generous Terms of Payment

Ideally, all clients will continue to pay on time, in full, even after the work has been performed. Regrettably, this isn't always the case. Targeting the right clients mitigates the risk of non-payment, but it takes only a few bad deals to create serious cash flow problems for a small practice or solo attorney. Aside from smarter targeting, reasonable yet solid payment terms combined with firm collections efforts comprise the best strategy for getting paid on time, every time. An established lawyer notes that the longer you give clients to pay their bill in full, the less likely you are to collect the full amount. And if intervention--debt collectors, skip tracers, recording bad debt--is necessary, you can count on receiving only a percentage of the full amount owed.

Questions about accounting services for real estate law firms? To learn more about our accounting and tax services, or to schedule a meeting with Ann Irons, CPA, LLC, contact us at (508) 966-0700. We service individuals, small businesses, and real estate legal offices in and around Bellingham, Boston, Woonsocket, Medway, and Milford.