A Simple Billing Tweak for Boosting Your Firm's Cash Flow with Eileen Kendall

Billing monthly is the norm for most law firm owners out there and it’s a standard system that is probably working just fine for you and your clients, so why would you do it differently? This is what Eileen Kendall from Kendall Law believed… until she realized that making a simple switch in her billing had the power to change the game for her firm’s cash flow.

Eileen Kendall is back on the show this week to share how billing twice a month has helped stabilize her firm’s cash flow, especially as she’s gone through a period of rapid growth from $300K one year to $900K the next. If you’ve been hesitant to try semi-monthly billing, listen in close because Eileen’s experience may just convince you to take the leap.

Join Melissa and Eileen this week to discover how you can improve your firm's financial health and create more breathing room in your schedule with a simple billing tweak. Eileen's insights and practical tips will give you the confidence to implement changes that can make a big impact on your bottom line.‍

If you’re a law firm owner, Mastery Group is the way for you to work with Melissa. This program consists of quarterly strategic planning facilitated with guidance and community every step of the way. Enrollment opens August 7th, 2024, so click here to join the waitlist right now to grab one of the limited spots!

If you’re wondering if Velocity Work is the right fit for you and want to chat with Melissa, text CONSULT to 201-534-8753.

What You’ll Discover:

• The benefits of billing twice a month versus once a month.

• Eileen’s biggest hesitations about tweaking her billing system.

• Why getting an infusion of cash twice a month instead of once can make a big difference.

• How billing clients more frequently can help them feel more connected to the work you're doing on their behalf.

• Strategies for communicating a billing change to your clients to minimize pushback.

• The importance of having systems in place to support your firm's growth.

• Why investing in outside professionals can be a smart shortcut to getting key processes and systems in place.

Featured on the Show:

• Create space, mindset, and concrete plans for growth. Start here: Velocity Work Monday Map.
• Join Mastery Group's waitlist.
• Schedule a consult call with us here.
• Eileen Kendall: Website | LinkedIn
• ClioCon
• Smokeball
• LawPay
• Quickbooks
• Kenect
• #233: Billing Procedures: Good Practices for Healthy Cash Flow with Randa Prendergast
• #268: The Psychology of Getting It Done with Eileen Kendall

Enjoy the Show?

Leave me a review in Apple Podcasts or anywhere else you listen!

I’m Melissa Shanahan, and this is The Law Firm Owner Podcast Episode #269.

Welcome to The Law Firm Owner Podcast, powered by Velocity Work, for owners who want to grow a firm that gives them the life they want. Get crystal clear on where you're going, take planning seriously, and honor your plan like a pro. This is the work that creates Velocity.

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If enrollment isn't open yet, you will see a button to join the waitlist, and you will be notified as soon as it opens. If you land on that page when enrollment is open, you'll be able to join. We cannot wait to work with you in a hands-on way to get clear about what you're aiming for, to create a really strong plan to get there, and to honor your plan.

Hope to see you inside.

Melissa Shanahan: Hi, everyone. Welcome back to this week's episode. I'm so glad you're here. We're going to have a familiar voice on with me today. You just heard her last week, and we're back to talk about the next thing that I think will be really interesting to you all.

So, Eileen Kendall, from Kendall Law, welcome back to the podcast.

Eileen: Thanks for having me again. I’d think you’d get tired of me.

Melissa: I never get tired of you. Okay, another thing that I asked you if you'd be up for sharing, you've emphasized how important it has been for your firm, and how meaningful it has been, to switch from billing one time a month to twice a month.

So, I encourage people to do this. It feels like a heavy lift for some people to make this switch. And so, I just want to hear from you all the things. Was it heavy? What was hard? Was it easier than you expected? I would love to just dig into it to make sure that we're busting myths where we can and helping people make the jump.

Eileen: Yeah, of course. I think that I heard it on your podcast. I think you had somebody on that was talking about it. And I think I've kind of seen things from time to time on it. I think billing for me has been a challenge until recently.

For the longest time I was doing it, and this was a big contention with you and I, that I was spending my time reviewing billing and sending out invoices. And then I tried to pass it off to my, COO, who wasn't my COO at the time, but working towards that. And that just didn't feel right either because I still needed to be in control; because I have that problem.

And after more and more talking about it, I finally started to outsource it to somebody that just handles it. And I think I started that late last year, where I wasn't reviewing things anymore. I have a friend that we've always had that discussion too, is that he stopped reviewing it because he's too nice.

I think we're emotionally tied to the work and feel like, ‘oh, we shouldn't bill that much,’ or whatnot. So, having a third person do it and say, “Nope, I'm not cutting that time. No, I'm not cutting that time.” I think that one was one of those things that I just felt weird about not looking and being able to cut time.

And then I think it was a podcast that you had, I listened to it, and I reached out to that same friend, who's also a client of yours, and I said, “What do you think about this double billing… twice a month?” He's like, “Oh, yeah, we already do it. My paralegal went to Clio Con and we started doing it.” Okay, well, I guess that's that. So, the decision was made. And then it was about how to make it happen.

So, I had to do all of the letters to say that this was going to be a billing change that went in effect... I think we started the letters in January to make the billing effective March 1. I don't think that there was any pushback at all on it. I don't think anybody reached out or anybody said anything. And then we just started doing it.

And we have a mix of clients. We have institutional clients that we bill, and can take 30-60-90-forever to pay us. And then we have the mix of the clients that are on retainer. So, that's where that billing really helps. Because every two weeks we're getting an infusion of cash. We have, I think, a four- or five-day window that they have to dispute it, and after that we just transfer the money.

And it's made a big difference in cash flow and comfort level of my cash flow. Some people would look at my cash flow and go, “What are you talking about? Why are you stressed?” But that's just me, right? It's made a big difference.

I haven't yet seen it, but I'm hoping that it's making a difference in those institutional clients. Instead of a 30-day cycle that we're going to have to wait 60-90-120, it's only a 15-day cycle. And that those payments will start to trickle in faster.

Melissa: Yeah. Okay, first question I want to ask is, did you think there would be pushback when you send out those letters?

Eileen: Yeah, because clients like to complain.

Melissa: Fair. Okay.

Melissa: But I think one of the things I think was mentioned in your podcast is not only the cash flow, it makes the retainer replenishments more doable. And I thought, “I don't know if I agree with that, because they're going to have to keep putting money in every two weeks, versus only once every 30 days.” But I haven't really seen much pushback on that either.

Melissa: Okay. Can you talk a little bit about the tech that you use? It doesn't really matter, people can do this no matter what they're using, but what is your tech stack, so to speak, as it pertains to billing?

Eileen: Yeah, so we use Smokeball. Smokeball does everything.

Melissa: I love Smokeball, by the way; just for everyone listening. But they're only for PCs. I said, you love Smokeball, right?

Eileen: I do. It's interesting, just on a side note, prior to going to Smokeball, I think I was using either Filevine or CosmoLex. I was in a mastermind talking to people about this unicorn program that I wanted. Because when I first demoed Smokeball, it was very Personal Injury and just didn't seem to jive well. And then, I did a demo and I thought, “There's the unicorn. I don't have to go buy a developer to do this.”

Because it integrates with everything. It integrates with Zoom and Outlook and InfoTrack for filing. That made a huge difference in itself, because when I was doing all that by myself I'd have to remember to enter all the expenses. So, we would pay the filing fees or whatever. I would have to remember to put those in the file. So, I'm sure we lost a ton of money.

Now it automatically gets billed to the client every time you e-file right in the system. It captures all your emails. It captures everything. And then it's just a matter of generating the invoices. So, it was really the most laborious part of billing before I outsourced. It was the three or four hours that I would be looking through every single entry to make sure that things were billed properly.

And I think at that point, we did have a paralegal that was way over billing, and so I had no choice. If she was still here, I wouldn't feel comfortable not reviewing invoices she was on. But that was the most laborious part, doing the invoices itself. And then it prints a nice report. You know how much is there and how much to transfer. And yeah, it's really very simple.

Melissa: What's the payment gateway? Is it all inside Smokeball? Or do you use something separate for that?

Eileen: LawPay.

Melissa: LawPay. Okay.

Eileen: LawPay syncs with it. And so, if a LawPay payment comes in, it credits right to that invoice or a trust. So, it all flows together. We have one client that unfortunately we have to manually enter stuff, because the way they send it. But if they pay with the link, it's all integrated.

Melissa: Okay, good deal. What accounting software do you use? QuickBooks? Yep. Any other pieces of technology that matter with anything to do with billing at all?

Eileen: No, I mean, we have some other capabilities that we haven't used yet. We started using something called Connect for doing reviews and sending text messages through our office phone number. And there's a way to do invoicing and things like that, but we haven't. It just seems to work the way we do it with Smokeball.

Melissa: Okay, yeah. So, you started this in March. And immediately you felt a bit of relief in terms of cash flow. And again, it's all relative. And you were technically fine when it came to cash flow, but it did help. I mean, shoot, it just helps if you have an injection of cash twice a month versus once a month. That can have its benefits.

Eileen: Yeah, I don't think I would be as comfortable with the big fire that we made if I wasn't doing this. Because to the exception of this round that we just did today, our average transfer from trust is payroll. Everything else is gravy, in the sense that at least every 15 days I was making an infusion that would cover payroll. Unfortunately, today was not that day, and I'm not sure why.

But in any event, that really made it more comfortable for me to make a five person hire.

Melissa: Okay. Yeah, definitely. What else comes to mind? When we were at the retreat, you were saying, “I wish I would have done it a long time ago.” I mean, you had your own reservations about doing it. If you were to give advice from one law firm owner to another, why should they consider this? You've given some reasons already. But what would you say in conversation to them to just get them to pull the trigger?

Eileen: I think it's about, and it depends too, how good you are at updating your client on the work being done. Because it also is the way to show them that work is being done in their file. To me, it's the wrong way to show them, because they should be known by getting copies and being updated. But at least they know when they get a bill, that this is the work that's been done in the last 15 days, instead of being in the dark for 30.

Melissa: Right. What else would you say to them?

Eileen: I don't know. It's really not as hard as you think it is. The most laborious part was when I was reviewing invoices. So, I say that it's not as hard as it is because now I have somebody else pushing buttons and doing it. Again, it's the comfort level of seeing the cash coming in.

Melissa: Okay, yep. What were your, if you haven't already said them, your biggest hesitations? I mean, there's one reason where if it feels like ‘if it's not broke, don't fix it.’ And of course, maybe they would see that money's coming out twice and that might bug them. But was that it? That was the biggest barrier for you?

Eileen: Yes. I think it was the clients were like, “Why do I keep having to pay you?”  And it's funny, because I had a contract attorney that would send me bills every 15 days. And I'm like, “The agreement is that I'm going to pay you once a month. Stop sending me these bills, because I keep having to pay you.”

So internally I felt that way, because I had to laid out cash to somebody else. That somebody would be like, “Why are you sending me so many bills? Didn't I just hear from you?” But I think, because of the way that my client base is set, because such a large balance of that is institutional clients, they don't care. They don't see them. Most of the time, they're just going into some vendor cafe thing that they have that we upload things to.

And that's not really our tech stack. That's just based on how to submit them to them. But I was concerned about the private clients that already are hesitant on how much it's costing, that they'd be like, “Oh my God, why are you sending another one?” But the benefit is being able to stay on top of the trust better.

Melissa: Yeah. Okay, good deal. I don't know, is there anything else you want to say here? It just felt meaningful enough, and I know people have struggles understanding why they would do it. Here's what I'll say too. Most of the time, when this comes up, it hasn't even crossed their mind. It's not like “No, I don't want to do that because I have these reservations.”

Most of the time, when this comes up, they'll just look at me like, “Why would I do that? Why would I bill twice a month?”

Eileen: Yeah, I totally agree with that. Because that's what your standard is, right? You've been doing this a long time, and in any institution, like your CPA or whatever, you’re billed monthly. This is the norm. This is the standard. Why would I do anything different?

And I don't think it was until listening to your podcast, and obviously figuring out things on what's going to be better is… that it crossed my mind about it. I don't think I'd ever even really gave much thought about it. And then have reservations about it. And then I asked my friend and he was like, “Yeah, I'm already doing it.” Well, if he's doing it, then it's certainly good enough, and I'm going to do it too.

Melissa: Yeah. But that same friend, by the way, I remember, I can hear I could hear his voice, “Why would I do that, Melissa?”

Eileen: Oh, interesting.

Melissa: I mean, that was a long time ago. But listen, I'm that's not one of my schticks. I don't push people to do that.

Eileen: He said that he got it from his paralegal going to Clio Con.

Melissa: Yeah, I think they did. I think it just got dropped. I'm like, “Listen, Jeff, you don't need to do it. It's fine.” This isn't something I really push people to do. But I do know that it can help with cash flow. That can be a thing.

And so, that was probably two years ago when I heard that comment. He kind of cocked his head to the side, “Why would I do that? What's the value of doing that?”

Eileen: Yeah, it could be too, that he said somebody else in that other ear heard it and thought and brought it back to him. So, “This is the benefit,” and this is that. And that's the person that does his billing anyway.

Melissa: Yes, exactly.

Eileen: Because I don't think we've ever, until I brought it up, I don't think we've ever talked about it.

Melissa: Yeah, no, probably not. Truthfully, when I bring something up, I kind of have a shtick about it most of the time. Like, “If we are going to do something, we are going to use these frameworks.” But generally, when it comes to processes and systems, I don't tell people what they should implement. We figure out what's the most important, and then they're on the hook for doing those things.

So, it feels a little out of line for me to say to someone, “This is a system you must implement, or this is a system I really believe you should implement.” I don't know, there are different ways to do different things. Different things work for different people. There are some advantages to that system in particular. It doesn't feel within the scope of my work to be the person that recommends that that's something that has to be done.

But I do know the perks of it. And most of the time if I bring it up… And I don't remember the circumstances around bringing it up with your friend, like what we're talking about. I don't remember what the moment was that would have led me to say it. But normally, there's a reason why I'll say it. Why I'll notice, “Oh, you can mitigate against something if you do put this into place.” So, I don't remember this certain thing.

And also, I'm sort of being funny saying dragging the feet. That's not fair. He's just a funny guy. I'm just giving him a hard time.

Eileen: Well, and I think what's important for everybody listening to your podcast… There's some that I just skip over because it's I don't need to know about Mastery Group or whatever… is that some of the people that you bring on are not lawyers. I can't remember who you brought on that talked about this. But there's been so many.

I think it was Randa, Randa Prendergast. It could have been. But there are just so many people that you bring on that just make you think, “Hmm.” Because I know there's a couple of people you've had come on, and I thought, “Huh, maybe I should not use a contract attorney, and I should do all the work.” Well, that went away real quick.

But there are a lot of things that I take from the people and the topics that you have that just make you think.

And then obviously, you run it through your network. Like I said, this particular friend is very close, and we work well together. And anything that he does that works is probably going to work for me. So, that was a no brainer at that point. If he had said, “No, that's poppycock,” I may not have done it.

Melissa: I don’t know how I feel about that. Because sometimes you’ve just got to… I'm glad you did it. That's what I mean. By the way, poppycock? What is that?

Eileen: I don't know. Sometimes I say words around here and the people are like, “Is that a word?” And they look it up, and they're like, “It is.” I don't remember what Yiddish word that I used. By the way, I don't know why I would have Yiddish words in my vocabulary. But they'll look them up and go, “Oh, that is the word.” Schlep, I use slap a lot. And they're like, “Is schlep a word?” Yeah, it’s a word.

Melissa: Yeah, exactly. Well, okay, this has been good. Basically, I want the moral of the story to be like, listen to this story. Maybe you've never thought of it before. Maybe there's a reason for you to think about it, or for you to help stabilize cash flow if you are in need of that. Some people really are in need of that, by the way. There's a lot that's not set up yet, or correctly, in their firm and cash flow is something that they struggle with.

Everything is always… The timing is really tough for some firms. So, this can be a way to help ease that. So anyway, I hope this is inspiration for people to think about what they're doing and how they're doing it.

Actually, there's another firm I was thinking of; they also were billing monthly. And they switched about a year ago; cash flow was a thing. And you know what? You've dealt with this in some instances, their collection rate was 85% or something. And so, that hurts. You feel that. And so, they started billing twice a month instead of once a month, and gosh, it changed everything for them.

Maybe that's another way to think about it for yourself as an indicator. If your collections rate is not ideal, if it's not close to 100, this can be something that helps sort of offset the pain of some of that. Not that you should settle for that collections rate, but in the interim it makes it a little bit easier.

So, yeah, well, thanks for coming on and talking about your flip; how you thought about it, what it's done for you, all that. I really appreciate it.

Eileen: You're very welcome. Thanks for having me.

Melissa: Yeah, you've given a lot of time to The Law Firm Owner Podcast in the last little bit.

Eileen: I have. I always wondered when I was going to be on, and look, now I'm two weeks in a row.

Melissa: Girl, you can come on whatever you want. I mean, seriously, there are times in the retreats when I think of ideas and I'll jot them down in a note for myself. And so, if you ever think of something that comes up when we're working together, that you think would be an interesting conversation, you just say the word.

Because there's so much that you're doing, that you have done in your firm, so much… I was thinking about the last episode that we recorded, there's stuff in there that we didn't say where your revenue is, but it far exceeds when we first met, and you're just going up, right? And that growth, and how quickly the growth has happened, we mentioned that as well... It's like three and a half years… it's been insane. And how you've handled it.

I was thinking about some of the things… I can almost hear certain audience members… not most… just think, “Man, she's that far along, why is she just now getting onboarding dialed if she's that far into revenue?” It's because it all happened at once.

Eileen: I’ve been so busy I can't even see. I’ve got time, and that's the freedom. Adding the important team members is finally giving me that breathing room to do the things. Typically, the only time I get to do that is on an airplane when I'm going on vacation; I have that downtime that I can read and really think.

I think this holiday was the first ski trip I did not have to work. The year before I was chairing a trial from Mammoth. Years before, I was dealing with stuff. And this growth has finally gotten me to the point that I can step back. Because it really has been just thrown at me. Where I haven't had time to be proactive, I'm constantly reactive.

And that's the switch we're trying to make. We've added all these team members. And while they may not be productive and have a ton of work, and I may not make a ton of money, I can grow comfortably and not feel overwhelmed. So that I can stay focused on dialing this stuff in. Because it has been, and you can cut this out, it's been a shit show for three and a half years.

Melissa: Yeah. But okay, I don't want to put words in your mouth. I would imagine that you have an understanding now of what it takes to go from where you were to where you are now, in terms of the amount of business that you're handling, the amount of revenue that's there, the amount of people it takes. There wasn't a world, I would imagine you would say and agree with, there was not a world in which this was going to feel good the whole way. And feel easy the whole way.

Eileen: No, I understand that. I think it's just more if I knew the things I should have done first.

Melissa: Like what?

Eileen: Like having systems in place. Because that's been the struggle. We've grown so fast and everything's always in my head, and then we add people, and I'm trying to communicate what's in my head on this process, and things get missed. And so, it's always been not smooth, because… And people say it just isn't possible.

I wish I would have had all the things I have now in place to grow. I think we still would have done it. But it would have been less chaotic, and less like… not that we've had a lot… less customer pain, and this pain and that pain. I think it just would have been a different experience.

Melissa: But don't you think you've been implementing the systems as you realize you need them?

Eileen: Well, yes, you do it because you made a mistake.

Melissa: Oh, yeah, sometimes they're born out of that. But I mean, you've been focused on processes and systems since I met you.

Eileen: Yes.

Melissa: I mean, you've been doing it. So, I think what you're saying, and this is kind of what I want people to understand… Listen, I am all for believing in ease and flow. I'm not against that. But when a business grows, especially as fast as yours has, but it's true for any business growth, you have to figure out along the way what you need. And then you input; you put it into place.

And that journey is pretty painful because you're so busy. You're handling all the work and trying to implement the systems that you're realizing that you need. And this is why I think I get upset with the whole idea that there's a blueprint. You'll hear certain businesses out there… This is not just in the law firm world; this is just out in the ether. You will find this when it’s anything to do with coaching, consulting.

People will say, “Pay us this amount of money and we're going to give you the blueprint.” That is total b.s. And if someone says that to you, you should run in the other direction because you're going to blow a bunch of money. And that “blueprint” that they're giving you is not going to fit your firm.

So, you have to really uncover the processes. They reveal themselves. Like, oh, this is next. This is next. This is next. And it's really frustrating. We all wish it's easier. But this is why people don't last. This is why people give up early. And there's some that don't, and they actually do build the thing that they wanted to build. And they do get the freedom they wanted to get. And that's you.

I'm just thinking of the listeners when you say that… I mean, sure, we all wish we could see all the steps in front of us. But that's just not how it works.

Eileen: I agree. But again, I think that I would have felt better if I knew all the stuff ahead of time. But you can't, you're right. You can't. You don't know. Like I said, going from me, it all being in my head, and me doing everything as it comes up is totally different than ‘okay, now I have somebody in that role. Oh, okay. Well, we forgot that step. And then we have to add that.’

So, yes. And I don't think it ever ends. But it would have been nice to have some framework in place before it got so big.

Melissa: Yeah. For context, I mean, we kind of mentioned this last time, when you got so big, this is part of why you feel the way you felt. Eileen went from $300,000 in one year to $900,000 the next year. You weren't doing marketing, really. It was just all happening. Your business was working. People were coming to you for your services. And most people don't have that kind of a jump. They just don't.

They think they would cut off their right pinky for that kind of jump. But you lived it. I think you would have been okay with maybe not such a big jump. It just really happened to you.

Eileen: Yeah, for sure.

Melissa: So, I can see where… Actually, now that you're saying this, I just wish I would have had… When you go from $300,000 to $900,000 in a year, I can see where you might be a little stuck on ‘I just wish I could have had some sort of something before the $900,000.’ So funny.

This is like finishing up the other podcast, but it feels like we're saying I do think it's worth getting help for shortcuts when you can; not expecting a magic pill. But you've done that as well. You have an HR attorney that is really helpful with you guys for recruiting and hiring and getting contracts in place and the manual and the handbook. That was that was something you had done with her earlier. She's been a really big value for you.

And a lot of clients, they don't have an HR attorney. So, that's something you did you spent money on to get help; to sort of take a shortcut to getting some things into place that mattered for you. So, you’ve been pretty smart about that as well.

I think using us in some ways is a shortcut on certain things. Tara. It reduces the cognitive load for you to try to stay focused as much as possible. And you're good about investing in those things.

Eileen: I can't do it all. I'm only good at certain things. And the HR was born out of a nightmare associate.

Melissa: That's true. I forgot about that person. Yeah, that's true. Okay.

Eileen: And then I just realized that I needed help in that. I wasn't, “Oh my gosh!” and wasn't compliant at all with just having a few employees. And now that we have 13, I’m certainly no way able… Unless you had somebody internally; we're nowhere near that. And so, having these outsourced professionals.

I'm good at what I do, in the law that I do, but I can't do everything else.

Melissa: Yeah, yeah. No, that's very true. But I think you're really good at…  I mean, you're saying the reason why you invest in these other professionals to be able to help you in those ways. But some people hold themselves back from that for one reason or another.

But I’ve got to say, it is such a joy and an honor to be able to be in your corner with you. You're so fun to work with. And it's not easy, the growth you've experienced. Like we've said, it hasn't been a cakewalk by any stretch. But to work with you and just really try to help where we can, roll up our sleeves where we can. There are other professionals also doing the same thing. It's really fun to be in your corner.

You've built something that makes it very exciting to be a part of and you're a hard worker. And that's always fun to work with as well.

Eileen: Thank you.

Melissa: Thank you for coming on. I think we did it. All right. You’ve got to come on again though someday.

Eileen: Okay.

Melissa: All right. Thanks.

All right, everybody, have a wonderful week. See you here next Tuesday.

Hey, you may not know this, but there's a free guide for a process I teach called Monday Map/Friday Wrap. If you go to VelocityWork.com, it's all yours. It's about how to plan your time and honor your plans. So, that week over week, more work that moves the needle is getting done in less time. Go to VelocityWork.com to get your free copy.

Thank you for listening to The Law Firm Owner Podcast. If you're ready to get clearer on your vision, data, and mindset, then head over to VelocityWork.com where you can plug in to Quarterly Strategic Planning, with accountability and coaching in between. This is the work that creates Velocity.

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