Published on:

Law departments should be able to claim savings if accounts payable spends less on checks

Little is known by me about the cost to a company of processing a law firm invoice (See my post of Nov. 5, 2006: “processing invoices”; Sept. 14, 2005: estimate of costs; April 6, 2008: multiple payment destinations.). Yet the cost to the company can probably be significant. After all, few law departments insist on Automatic Clearing House (ACH) payments to their law firms

Most law departments want law firms to submit a single each matter on a separate invoice. That requirement, obviously, multiplies the number of checks that must be written. If the cost to the company is $10 per check written and the law department (with 200 matters billed monthly) generates 2,400 checks a year, $24,000 to simply send out a check is not chump change. Many law departments would easily surpass that number of requests and my $10 figure may be risibly low.

Perhaps with some of its primary law firms, a law department might make one payment each quarter and then reconcile that amount against the bills submitted during the quarter (See my post of Jan. 7, 2009: retainer billing and payment with 7 references.). If a general counsel could claim some of the savings from a more efficient system, sufficient incentive might be at hand to change routines.