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Improving Realization Rates

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Frank, Frank, Goldstein & Nager, P.C.

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Improving Realization Rates

  1. 1. IMPROVING REALIZATION RATES Frank, Frank, Goldstein & Nager, P.C. 1430 Broadway Suite 1615 New York, NY 10018 Tel: (212) 686-0100 www.ffgnesqs.com
  2. 2. Realization Rates Realization rates should be approximately 90 to 95 percent. 90 % 95 %
  3. 3. Issues to Consider Policyholders Not all time on engagements billed Late billing by firm Liability carrier exclusion for fee disputes Strict adherence to liability policies may prevent cancellation or suspension of policy and benefits Economic reality of lawsuits Accounting Malpractice Statute of Limitations
  4. 4. Objective: Increase realization rates Overview:  Tighten risk management and assessment policies.  Secure engagement letters which include policies regarding payment of fees and fee disputes.  Record all time spent on client engagement.  Act diligently to collect current and aged receivables.  Evaluate work papers and files for possible error's (anticipated counterclaims and suit.)  Consult with your liability carrier prior to referring the claim for collection.  Use collection counsel with experience handling accounting fee disputes.
  5. 5. Risk Management and Assessment Policies 1. Due diligence on Prospective Client Internet search Check public records for lawsuits, judgments, liens, and pending litigation. Check public records for assets.
  6. 6. Risk Management and Assessment Policies 2. Identify High Risk Clients Clients with cash flow issues and/or poor internal controls Clients with lack of stability Clients who require expertise not possessed by the firm Clients who negotiate initial retainer Clients that are unable or unwilling to pay fair fees Clients who have repeatedly changed accounting firms Clients with multiple judgments and lawsuits Client engagements that "feel wrong"
  7. 7. Risk Management and Assessment Policies 3. Engagement letters  Standard clauses  Fees  Specific work being performed  Limitations  Dispute resolution clause(s)  Reservation of right to withdraw or terminate engagement  Specific clauses which will protect the practitioner  Rates subject to change
  8. 8. Risk Management and Assessment Policies 3a. Engagement letters Do not proceed without the signed engagement and initial fee retainer.
  9. 9. Risk Management and Assessment Policies 4. Addendums to Engagement Letter. Change in scope or additional work to be performed Change in fees or rates Client must sign off on addendum before performing additional work
  10. 10. Billing Practice 1. Record and account for all time on engagement. Bottom line effect Staffing issues Profitability
  11. 11. Billing Practice 2. Active collection efforts on current and aged receivables. Bill timely Contact client for payment in a phone and email Establish a collection policy
  12. 12. Fee Disputes and Non-Payment: Always Anticipate a Dispute Fee Dispute Provisions Mediation Arbitration Litigation Include a provision limiting your firm’s liability
  13. 13. Other Considerations Cost and Benefits Professional Liability Carrier Coverage Deduction Terms of policy Approved
  14. 14. Call us at (212) 686- 0100 or email us directly at Jnager@ffgnesqs.com for further information and/or to help you get paid now.

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