One hallmark of good technology is that it addresses a customers’ pain point and makes life easier. If that’s true, then LexisNexis® CounselLink® new FastTrack product hits the mark.
This is the time of year —right before and during LegalWeek, which deems itself with some justification as “the largest and most important legal technology event of the year”—for new legal tech product announcements. One of these that caught my attention was a new offering from LexisNexis® CounselLink® called CounselLink FastTrack. CounselLink FastTrack is an innovative approach to vendor and financial management. It helps law firms get paid sooner while providing extended payment terms and some cash back on invoices to firm clients.
CounselLink FastTrack is a simple, eloquent solution to a vexing problem for law firms: getting paid timely. Here’s how it works. A corporation subscribes to the service. A law firm submits its bill. Once approved, a third-party provider, LSQ, pays the fees minus an “overhead fee” (usually around 4-6% of the fees) typically within 24 hours. The corporate client then generally has 60 days to reimburse LSQ less some 2% of the fees. The client and LSQ share the overhead charge.
CounselLink FastTrack is a win-win
CounselLink FastTrack is a win-win. Law firms want to get paid quickly, improve their cash flow, and reduce payment risk. Legal departments want to reduce costs, maintain or extend payment terms, and demonstrate strategic value to the C-suite. They often prefer to hold onto their cash and pay invoices based on corporate policies and terms. And let’s face it, reviewing bills is not most clients’ favorite thing to do. So, legal bills often go to the bottom of the pile.
As a practicing lawyer, getting paid was always the bane of my existence. I appreciated and always tried to be sympathetic to my clients’ payment needs. But the firm finance committee usually wasn’t quite as sympathetic. And it got even worse toward the end of the year. Most firms determine partner compensation based on a cash basis. Time of payment thus becomes essential and is more critical as you get close to the end of the unearned. In most firms, its an all hands on deck sprint in December to collect every cent possible before year end.
And for most partners, donning your client to pay its bills is not something you look forward to doing. That’s the beauty of this product-it reduces a real live pain point on both sides of the equation. That reduction comes with a price: the law firm takes a 6% discount to get paid more timely. The size of the firm and the amount of fees will affect how good a deal this is. No matter what, a 6% discount is a pretty good hit, especially if it is combined with an already existing discount the client may be demanding.
But CounselLink is marketing this to the client whom it assumes can pressure law firms into agreeing to the arrangement. Again, the size of the firm and the size of the clients and fees will matter. Leading candidates for this service, of course, are insurance companies that command large books of business. But frankly, carriers are notorious for being slow pays. This fact, plus the aggressive auditing of bills, create a lot of dissatisfaction and resentment among law firms.
A simple solution to a complicated problem that causes frustration and pain on both sides. That’s sound design, pure and simple
There are good reasons for how insurance approach paying legal bills. But CounselLink FastTrack should be attractive to both sides. This is especially the case if its use is combined with less vigorous auditing. (The insurance company gets a 2% discount in fees right off the bat in which could make up for a less strict auditing process). Aaron Pierce, GM of CounselLink, told me that CounselLink is having several discussions with carriers. There seems to be interest says Pierce.
It remains to be seen how much traction this will get. But no matter what, you have to applaud the idea. A simple solution to a complicated problem that causes frustration and pain on both sides. That’s sound design, pure and simple.