Ensuring that one’s law firm has a consistent stream of revenue coming in is, of course, important at all times. But it is especially pertinent as the pandemic continues, RapidPay general manager Ferdi Chavez explains, when social distancing is now societies new normal and business practices must change to ensure continuity of revenue.
“Predictable revenue is critical because debt is predictable and must be paid on specific frequencies and dates – mortgages, tax, payroll, power, rent, etc. Ensuring that regular, predictable revenue is established means that upcoming debt is covered and law firms have confidence in their continuity of service – much the same way an employee has a regular salary payment and has confidence their personal debt will be covered,” he outlines.
For Mr Hugo-Hamman, there are two main factors driving urgency: one, the increasing volume of legal work in the marketplace, and two, a corresponding decrease in the capacities of clients to pay.
Using the example of family law with regard to the former, he outlines that “divorce rates are starting to skyrocket and the first generation of blended families are experiencing crises of immense proportions. So, there’s a lot of potentially complicated and expensive legal work emerging as a result of the extraordinary circumstances that we are in”.
On the question of the latter, Mr Hugo-Hamman points to Sydney private schools as a case study for the capacity of law firm clients to pay their bills: “There’s a lack of affordability even in something like [private schooling in Sydney], where 30 per cent of fees have not been paid. For a law firm, having 30 per cent of bills not paid would probably be catastrophic,” he reflected.
“If I was managing a law firm, I would be spending a lot of time thinking about this, because it might be okay today, but you need to be thinking about affordability in six to 12 months’ time. People on JobKeeper are still feeling comfortable and not eating into their assets, but when JobKeeper goes, that is going to change the financial position of millions of people.”