As a follow-up to the blog on Measuring Cost and Expenses we would like to share an additional view focusing on Collection Law Firm efficiency and the ways it contributes to profitability. Again the key factors are Revenue and Expense but now we want to look internally at the operations and processes that drive the many workflow processes within the firm. Look at workflow like a big machine where accounts come in and many actions are performed on them as you attempt collections and finally file suit and manage post judgment enforcement. All of these processes take time and people resources (costs) to complete and the timely aspect of getting the work done is your revenue opportunity costs. The slower or less efficient the process the higher the costs and the longer you wait before revenue is generated. By closely tracking a workflow process you discover the decision points, manual touches, wait time, how paper intensive a process is and where you are incurring opportunity costs. Measuring your workflow processes and understanding the labor costs and opportunity costs are essential for efficiency and profitability. Some key factors to measure are:
- How fast are new placements loaded and acknowledged?
- How fast are scrubs performed on new placements?
- On skip accounts how fast are they scrubbed? Is this automated and processed on a routine schedule?
- Are accounts being sued when they should based on each client's guidelines?
- Is the affidavit process managed timely to minimize wait time before suit?
- When suit documents are generated and printed how long before they are filed in court? How often are reprints required or copies made, etc?
- How long does service take and are some service providers better than others?
- How long does it take to process service results?
- Are judgments being filed timely and correctly?
- Are judgments being entered same day received?
- Is post-judgment activity occurring timely and correctly?
All of the above items and more revolve around business workflow and how well your staff resources are trained to manage these processes along with your level of automation that your software can provide. Being able to mine your data points to produce key metrics that track and measure your workflow processes is critical to understanding the level of your efficiency. Automating workflow steps not only reduces time-in-process but also reduces manual touching. The collection software you use will drive the degree of workflow automation that you can achieve. A software solution that provides the opportunity to automate many of your office policies and compliancy steps helps ensure that your best practices will be consistently executed. This usually leads to improvements in accuracy, efficiency and the driving of your account inventory. There are two natural by-products of workflow automation: 1) less training is required because rules execute what humans once did and 2) less compliancy situations to deal with because your workflow is consistently executing the rules you have defined. The end desired goal from this exercise is you achieve more with less cost while potentially increasing your revenue opportunity. Just start with one process at a time focusing on incremental improvement.