A firm can be profitable on paper and still struggle to manage cash flow. The money has been earned, but it hasn't arrived. It sits in work in progress, in unpaid invoices, and with a client who means to sort it next week.

The time between doing the work and banking the cash is the cash gap. Wages, rent, tax and partner drawings all come out of cash, not accrued profit. Every extra day in the cycle is a day that your revenue spends in someone else's bank account.

For Australian law firms that gap is wider than it needs to be. A large part of it comes down to how you ask clients to pay.

What the benchmarking says

Late payment has become a real drag on the profession. The Australian Financial Review reported on it in 2024, using Macquarie's legal benchmarking data.

Firms typically set 14-day terms. Actual collection runs at 50 to 60 debtor days (ALPMA). Lock-up, which is debtors plus WIP measured as a share of annual fees, stayed above the 90-day best-practice benchmark for many firms in FY2023 (Macquarie, 2024). Family law fared worst. Only 13% of firms collected inside 60 days, and more than a quarter took over 120.

Macquarie put a price on this delay. For every $1 million of revenue, ten days of lock-up ties up about $27,000 in cash. Move a $20 million firm from 120 days to 90 and you release roughly $1.62 million. You have already earned that money. You don't need new clients or higher fees to collect it. You need a better way of asking.

Where the delay comes from

Clients almost always pay in the end. What holds the money up is friction.

Fee earners are trained to do legal work. Chasing invoices sits low on the list of jobs to do, until a cash crunch pushes it up.

Ask a finance manager where the time goes and you get the same answer. The invoice goes out and the phone starts. One client cannot find the bank details. Another has paid the wrong amount and wants some of it back. An unidentified payment lands in the account, and a firm-wide email circulates asking if anyone recognises it.

For clients, the mechanics of paying a law firm feel dated: bank details buried in a PDF attached to an email, a long reference to write down and re-key, a cheque, a card number read out over the phone. Paying goes into the "too hard" bucket, it gets forgotten, and everything slows down.

Client expectations have moved on. People pay everywhere else with a tap on their phone. A firm that cannot offer that is teaching its clients to pay later. Firms that offer online payment collect half their bills within seven days, whereas firms without it take fifteen (The Law Society of England and Wales, citing the 2023 Legal Trends Report; England and Wales data, directional for Australia).

Each call, email and refund costs a few minutes of the team's day, frustrates the client, and adds days to the cash gap.

What great payments look like

Legl has processed more than $1.5 billion AUD in law firm payments globally since 2020 with the objective of helping law firms to get paid faster whilst delivering a best-in-class digital client experience. Legl Pay launched in Australia in 2025, and many Australian firms are learning the impact of providing frictionless ways to pay. 

One example is Hammond Nguyen Turnbull, Sydney who now use Legl to get paid faster. Their clients used to take 3 days to pay. The average is now 6 hours, and more than 90% of the value arrives outside office hours.

The firm sends a secure payment request tied to the exact amount due and the matter. The client pays in seconds by card or Apple Pay, from wherever they are. No banking login, no long reference to mistype, no back and forth.

It works out of hours, which matters more than it sounds. Plenty of clients deal with a legal bill late on a Sunday evening. A link that stays live around the clock takes the money at the moment the client is ready, not when your accounts team is next at a desk. Across all firms using Legl Pay, more than half of payments come in outside standard office hours and 59% land within 24 hours of the request. Funds are routed to the correct trust or office account, with merchant fees billed separately rather than taken from the payment, and the matter reference travels with the payment, so everything is easily identified and reconciled.

What the firm gets back:

• Less admin. Time goes back to the people who currently take payments manually, which also carries PCI and security exposure.
• Faster cash. Once the request goes out, the money can arrive the same day.
• A better client experience. Paying is easy, so clients pay sooner, and the matter ends on a good note.

Payments belong inside onboarding

Legl Pay is not a card terminal bolted on beside the practice management system. It sits in the same system that onboards, verifies and monitors the client. At every stage of the client lifecycle, Legl helps your firm to embed payment steps into processes, ensuring that your client has an excellent digital experience at every step of the way, and that your firm benefits from better payment times, better cash flow and better working capital cycles. 

Having the flexibility that Legl offers to integrate payments across the client’s lifecycle with the firm becomes more important as firms change how they charge. More work is priced as a fixed fee, and more firms ask for money in trust before a file opens. Payment has become part of starting the matter, so it belongs next to the AML check, risk assessments, and the signed costs agreement. The client runs the identity check, signs, and pays, in one sequence.

AML/CTF obligations commenced on 1 July 2026 for firms providing designated services. Every payment carries a full audit trail and reference.

It also gives the firm control mechanisms. Because the firm sets the amount on the request, the payment matches the invoice or the sum on account. There is no room for a client to send more than was asked for. This closes one of the oldest money laundering plays in professional services: the client who deliberately sends more than the requested amount, often into trust, then asks for the excess back to a different account.

Vivian Nguyen, Partner at Sydney law firm Hammond Nguyen Turnbull, treated the new AML/CTF rules as a reason to consolidate systems, payments included. She says:

"Tranche 2 was a natural moment to look hard at our client experience, and at the systems sitting underneath them. Payments is part of that: with Legl, this is now part of onboarding rather than something that happens at the end. Clients used to take 3 days to pay us; it's now 6 hours on average. More than 90% of the value comes in outside office hours - evenings, weekends, whenever suits the client. They're telling us it's easier, and we can see it in the numbers."

Using client intelligence to make better commercial decisions

The firms pulling ahead run onboarding, AML and collections as one view of the client. That view lets them ask harder questions before the work starts:

• Should we act for this client at all?
• Should we ask for a larger sum on account?
• Should we adjust payment terms for the risk?
• Should we ask for staged payments?

In practice:

• A client whose risk assessment flags concerns may warrant a different amount secured in the trust account before work begins.
• A corporate client with a record of slow payment across matters is a case for restructuring the schedule early, while you still have leverage.
• A client who keeps generating write-offs is a signal to revisit pricing and engagement terms at renewal.

Most firms make these calls on instinct. The knowledge sits with the partner who remembers the last matter, and it leaves when that partner does. A single source of truth on the client turns instinct into policy: one record of who they are, what the risk assessment said, what they owe and how they have paid before. 

The same record then drives what the client sees. Onboarding form, identity check, request for funds on account, payment link. Better decisions at the start, less effort for the client, and invoices paid faster.

The bottom line

Closing the cash gap releases money you have already earned. No new clients, no fee rise, no cost cutting. Make paying easy at the moment the client is ready, inside the system that already knows who they are.

Curious what this looks like in your firm? Talk to Legl's Australian team about Legl Pay and where it fits inside your onboarding and AML workflow.