Firms get creative as holiday fever sparks billing chaos
Easter and royal wedding force firms to rethink accounting deadlines
Law firms are taking decisive action ahead of the fast-approaching bank holiday bonanza as they prepare for April’s year-end billing frenzy.
The long Easter weekend, May Day bank holiday and extra day off for the royal wedding have reduced the amount of time available to bill clients at the most vital time of the year.
DLA Piper is leaving its internal accounting system open until 5 May. The move will allow partners to log work they have billed during 2010-11 after the financial year ends on 30 April.
Europe managing director Andrew Darwin said: “Normally we close the system at the end of each month, but this is a special year-end, and taking into account the volume of stuff to process it makes sense.
“What we’re also saying is to not leave everything until 26 April when everyone will be out celebrating the wedding.”
Darwin stressed that the move was purely administrative and would not allow partners to move work that closes in the first few days of the next financial year on to this year’s figures.
Eversheds and Wragge & Co brought their billing deadlines forward to March in order to counter administrative congestion at the end of April.
Wragges senior partner Quentin Poole said: “We encouraged partners to go for a dummy year-end at the end of March, so we had a very strong March and had less work going forward.
“We’re not one of the worst firms for billing in April. You hear about firms that do almost a third of their billing in April, whereas we do a month and a bit.”
Eversheds is also understood to have asked partners to treat March as a ’dummy’ April, posting notices to that effect around the office.
Managing partner Lee Ranson said: “We’ve been aware of the problem in the sense that we all work to the end of April as the year-end and the last two weeks can be critical. We looked at this at Christmas and thought we’d get partners to treat March as April.”
Burges Salmon has imposed an early cut-off date for billing so that its accounts team has enough time to process bills. The firm also required holiday requests for the Easter period to be submitted three months in advance.
Firms that have not put any measures in place to deal with the shortened month have been communicating the need for extra efficiency to their partners.
Freshfields Bruckhaus Deringer finance director Laurence Milsted said: “Most of what we’ve been doing is around communication and chasing up partners about it pretty much since the wedding was announced. We’ve told people to assume that everybody’s going to be on holiday from Easter onwards.”
The loss of an extra day’s business at the most critical time of a law firm’s annual cycle has angered some senior City figures.
One departmental head at a top 20 firm said: “I wish the royal couple well, but to be honest it’s been a massive pain in the a**e.”
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Readers' comments (12)
Danno | 11-Apr-2011 10:16 am
That's nothing - at my Oxford college we're having to have our collection exams on Thursday instead of Friday!
It's an administrative nightmare that exposed the deep anti-monarchist elements among the Fellows.
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Anonymous | 11-Apr-2011 2:01 pm
If one extra day's holiday is sufficient to cause "billing chaos" in top 50 law firms then there is something seriously wrong with their systems.
Any law firm that does not in this day and age have systems and controls to ensure WIP is billed as a matter of course during the period rather than the antiquated "last day of the month" needs their arse kicking.
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No accounting for taste | 11-Apr-2011 2:18 pm
As an accountant, I've been hearing grumbling by law firms for the last couple of months precisely on this issue. Of course it's unfortunate that there are so many short weeks and bank holidays in April, but this situation has showed up the lamentable financial management in even the major legal practices. That so many large businesses constantly rely on partners to get their clients to pay the bills and that those partners are manifestly unable to persuade their clients so to do, shows the profession in a very bad light, and it is a sorry state of affairs.
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The Anvil | 11-Apr-2011 2:59 pm
@Noaccountingfortaste Isn't this the problem? Lawyers are trained in black letter law and not in business. Most partners can write a detailed 10page opinion letter but they are clueless about managing the business.
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Sally Vanson | 11-Apr-2011 3:15 pm
This is yet another example of the uncommerciality and arrogance of law firms. What makes them think they are so different from other professional services firms. Hopefully the Legal Services Act will have enough impact to help them rethink their antiquated values and learn some basic business management and cash flow skills or is the real issue to get enough money in to improve their already huge annual pay outs?
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Anonymous | 11-Apr-2011 4:13 pm
I couldn't agree more with the comments above - you would think that with modern IT facilities and proper business sense this wouldn't be a problem. The legal profession really is a joke sometimes.
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Poor Housekeeping | 11-Apr-2011 7:09 pm
Many lawyers are more interested in poring over pedantic legal minutiae than sorting out the "admin" of billing, despite the fact that billing is the second most important aspect of a law firm after its reputation. I'm surprised that clients with multiple long running matters don't go beserk at being walloped with a flurry of bills once a year. Prompt final billing and regular interim billing should be par for the course. It's embarrassing.
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Anonymous | 11-Apr-2011 8:52 pm
Never have understood this. All the big law firms will account for income on a time worked (WIP) basis and therefore it wont make any difference when they get around to billing it, as long as they do!
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Scrooge | 11-Apr-2011 11:48 pm
Isnt it time these people realised where their pay comes from - no bills, no pay.
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1000 chimps typing | 12-Apr-2011 3:10 pm
To all the paragons of good housekeeping above, I am impressed that you have such excellent systems in place. If you didn't, I'd suspect that always being on top of your admin meant you didn't have enough work to do.
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