Deliberately delaying payments on law firm invoices and automatic payments?

Several managing partners at big law firms moan about the “molasses-paced payment process” at clients. The piece in the Am. Lawyer, Vol. 30, Sept. 2008 at 33, does not distinguish between clients with a law department and clients without, but widespread deliberate delays in paying invoices appears to rankle many law firms.

I doubt that a general counsel would unilaterally slow payments to law firms from the typical 30 or 45 days to a much longer period, but the CFO might impose such a freeze to conserve cash.

Toward the end, the article adds a strange statement. “One saving grace: electronic payment processes that are now common in many major corporations.” As explained by one law firm chairman, “With electronic payment systems, you submit a bill and it pays it in a specific time.” I do not know of law departments that have agreed to pay bills automatically in a set number of days, even if they have not had a chance to review the bill.

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