When a new client approaches your law firm, the clock starts ticking. Not just on their matter, but on your revenue. 

According to our recent webinar, Simplify your compliance stack, it’s common for client onboarding to take 24 days from instruction. In other words, billable work can’t start for three and a half weeks. Every single one of those days comes with a cost. Some costs are obvious: a negative impact on the client experience,  delayed billing, and administrative overhead. Others lurk beneath the surface, silently eroding your firm's efficiency and profitability.

 In this article, we'll uncover these hidden costs and show you why your client onboarding process is more expensive than you think.

The client experience cost

First impressions matter, and for law firms, the onboarding process is that crucial first impression. Yet too often, the client experience begins with a fragmented and frustrating process. 

Consider a typical scenario: a client receives five separate emails requesting documents, asking them to fill out multiple questionnaires, and yet another with an engagement letter to sign. Each email requires them to navigate different platforms, re-enter information they've already provided, and keep track of multiple login credentials.

Sound familiar? It does to your clients. 

This initial experience kickstarts a cascade of negative consequences. Disjointed onboarding processes lead clients to question their choice of firm. In fact, many will drop off entirely and look elsewhere for legal services. 

Those that do continue working with your firm will be less inclined to recommend you to others. A poor onboarding process might even cause clients to leave a negative review. Due to this poor review, countless other prospective clients will decide to look elsewhere for legal services. Reputation is hard for law firms to build, and even harder to maintain. 

When it comes to billing, happy clients pay faster. Unhappy clients, however, dig their heels in, delaying payment or requesting a discounted price. This only adds to your team’s stress, administrative burden, and impacts the firm’s ability to generate consistent cash flow. 

The price of poor onboarding goes far beyond lost clients. It impacts your reputation, referrals, and revenue in ways that compound over time, costing you business for years to come.

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The time cost: 24 days of delayed revenue

Having spoken to countless law firms, we’ve discovered that they typically take 24 days to onboard a new client. That's more than three weeks of potential billable time that they’re missing out on, impacting their ability to generate fast and predictable cash flow.

Let's put some numbers to this. 

Mid-sized law firms (21 - 100 fee-earners) generate roughly £1,500 in daily revenue per client. When onboarding takes 24 days, that’s £36,000 in delayed revenue for a single matter. Multiply this by 50 new matters each month, and suddenly your firm is looking at £1.8 million in revenue that's stuck in onboarding limbo every month.

Delayed income harms your firm’s cash flow, agility, and growth potential. When revenue is tied up in onboarding processes, it affects everything from partner distributions to investment in new technology. More importantly, it impacts your firm's ability to take on new clients and matters, creating a cycle of inefficiency that can limit long-term growth. 

The question isn't whether slow onboarding is costing your firm, it's whether you can afford to let it continue.

The administrative burden

The true cost of onboarding extends far beyond delayed billing. In law firms across the UK, highly skilled professionals are spending hours each week on low-value administrative tasks. Copying data between systems, chasing documents, and manually updating compliance records—work that directly cuts into billable time and pulls focus from client service.

Take a typical onboarding process where a fee earner needs to gather client information, run compliance checks, prepare engagement letters, and track document submissions. Each of these tasks might involve multiple systems. An email chain for initial contact, a separate platform for ID verification, another tool for company checks, and yet another for electronic signatures. 

At each step, someone needs to manually transfer information, check status updates, and follow up on missing items. Imagine fee-earners spent two hours (representing £600 of billable time) per new client on these tasks. Multiply this by 50 matters across 10 fee-earners, and that represents £360,000 in collective fee earner time spent on tasks that could be automated each year.

But the costs multiply when you consider the ripple effects. Support staff spend time double-checking data entry for accuracy. Compliance teams waste hours reconciling information across different platforms. Finance teams chase missing information needed for billing. 

The result? What should be a simple onboarding process turns into a time-sucking burden.

The compliance risk

When it comes to compliance, more tools don't always mean more security. In fact, the opposite is often true. Every time staff manually copy data from one platform to another, they risk transcription mistakes. Every time client information sits in multiple databases, there's a risk of inconsistency.

The financial implications of these risks are substantial. Compliance breaches can cost hundreds of thousands. And when it comes to preparing for an audit, firms waste precious time gathering information from multiple systems, reconciling inconsistencies, and creating comprehensive audit trails. 

But perhaps most concerning is the hidden cost of missed red flags. When compliance information exists in silos, it becomes harder to spot patterns and identify risks. A sanctions alert in one system might not be immediately visible to someone checking client information in another. Changes in client circumstances might be updated in one platform but not others. 

For law firms, the true cost of fragmented compliance isn't just measured in time and money… it's measured in risk and reputational damage.

The hidden opportunity

These costs paint a sobering picture. However, they also point to a significant opportunity. By addressing onboarding inefficiencies with dedicated onboarding technology, firms can reduce costs, improve client relationships and gain a competitive advantage. 

Want to learn more about how leading law firms are streamlining their onboarding processes? Check out our webinar, Simplify your compliance stack, and discover practical strategies for making onboarding both efficient and effective. 

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