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Top 5 Strategies for Managing the End-of-Year Collections Frenzy

By Saurabh Mehra
October 01, 2024

It's Q4 and for law firms, this means at least one thing: the end of year collections sprint is in full swing. This year just like the previous years, the pressure is on for law firm leaders as end-of-year collections continue to present a formidable challenge.

End of year collections are crucial for law firms because they allow them to maximize their revenue for the year, impacting profitability, partner distributions and bonus calculations by ensuring outstanding invoices are paid before the year closes, which is especially important for meeting financial targets and managing cash flow throughout the firm.

The stats year-over-year, however, have not been positive. In 2023, the Am Law 100 experienced their lowest realization rates in five years — dropping to 80.93%, down from 82.2% in 2022 and 83.11% in 2021. Some firms even reported rates as low as 66.5%.

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