There are many ways to describe the time period between when a client first provides you with instructions to when you finally get paid. Some firms call it matter turnaround or file velocity or matter open time. From what I see in law firms, it is the one KPI that most firms ignore. In fact, it is the one key process that effectively drives margin improvement in your firm. This is because it takes into consideration all activities that drive improvement in profitability and cash flow. In Top 10 Profit and Cash Flow Strategies for Law Firms I call this reducing the Cash Gap.

Paul Paxton-Hall, Principal of Paxton-Hall Lawyers, says “The quicker work is turned around the quicker you get paid. There are 2 sorts of lawyers……good lawyers and those who are slow. Turning work around quickly:

  1. helps cash flow;
  2. avoids or minimises the risk of “mental block” files;
  3. reduces risks of clients getting cranky with time delays;
  4. fleshes out the problems in a timely fashion; and
  5. avoids the risk of “stock” becoming redundant.”

I like the term file velocity. It implies speed.

Let’s step though some of the major processes impacting on file velocity:


    1. An enquiry from a client or prospective client;
    2. Receiving instructions;
    3. Costs Agreement signed;

Production & Delivery

    1. Matter is worked on to finalisation;

Accounts Receiveable

  1. Bill raised, either during the matter or at the end of the matter;
  2. Cash collected.

If you can increase the speed between step 1 and when you get paid, you will see improvements in all 5 profit & cash flow KPI’s:

Productivity: The more focused lawyers are on pushing work through; they tend to fill their days with chargeable work. That 5-6 hour charge target will not be an issue;

Write-on(off): The result of improved productivity generally will mean an increase in efficiency, provided the work is completed in a timely and accurate way. Improved efficiency will result in the time charged to WIP being billed in full. Correct pricing can have an impact on the amount charged to clients, but the main driver to reducing write-offs is file velocity. The result is the shift from write-offs to write-ons.

Average rate: By pushing work through, productivity increases (i.e. more charged hours) and write-offs reduce (meaning greater recoverability of charged hours). The flow on effect is that for every hour you pay a fee earner, you generate more revenue so that for the total hours paid (which is a constant) your average rate will increase, which means more profit.

WIP days: Finishing a matter earlier means that your final bill gets issued earlier, reducing the number of days that the time charged is sitting in WIP. Once it leaves WIP it goes to debtors and can then turn into cash.

Debtors days: Happy clients generally means earlier payment. By improving file velocity it shows your clients you are on top of your game and addressing their issues on time, which usually translates to faster payment.

Some practical actions to improving file velocity are:

  1. Properly engage your clients at the beginning and manage their expectations around completion time.
  2. Set clear expectations with your lawyers around the expected completion time.
  3. Write down the target times, keep them on a list and measure/update on a weekly basis.
  4. Hold team workflow/priority meetings.
  5. Hold lawyers accountable for meeting their file velocity deadlines.
  6. Actively engage with clients and others face-to-face at the earliest time possible to remove roadblocks.
  7. Deliver the bill with the final advice or outcome.

Focus on your file velocity to drive profitability improvement.