Many small firms collect payments faster than BigLaw counterparts, new data shows
Many small and medium-size law firms are collecting payments faster than BigLaw firms, according to new data from professional business platform 8am. (Photo by Jackal Pan/Getty Images)
Many small and medium-size law firms are collecting payments faster than BigLaw firms, according to new data from professional business platform 8am.
In analyzing millions of bills issued by these firms in the last two years, 8am found that their share of overdue invoices remained relatively steady. So far in 2026, and in the prior two years, about 52% of firms had at least one overdue invoice. Across all invoices for these firms, only 22% were actually overdue at 30 days.
Collection rates for small and medium-size firms have improved, 8am also found. According to its data, the share of invoices collected within 30 days increased from 58% in 2024 to 63% in 2026. Among the invoices paid within 30 days, the average collection time was five days, and the median collection time was within one day.
“So what does this all tell us? Simply that many small firms are getting paid more reliably and efficiently,” wrote Leslie Witt, the chief product officer for 8am, in a July 9 blog post announcing the data.
Among its other findings, 8am shows that there has been an increase in small firms’ overdue balances despite the improvement in their 30-day collection rates. Outstanding overdue receivables total more than $7 billion, with unpaid bills at a median 131 days past due. Additionally, average overdue balances increased by 21%, from $2,800 in 2024 to $3,400 in 2026.
In looking at specific practice areas, 8am found divorce/separation had the highest average overdue balance, at $3,077, and immigration had the highest overdue invoice rate, at 42.5%.
“Overall, many small law firms are improving how they collect, but significant earned revenue is still sitting unpaid for months,” Witt wrote. “That gap can limit hiring, investment and planning for any business.”
Small firms can take several steps to improve how they are paid, including by enabling online payments, using autopay-enabled payment plans for high-value bills, and using structured billing, Witt noted.
8am’s analysis of small and medium-size firms followed recent reports that BigLaw firms face challenges in turning billable work into collected revenue, Witt also said in the blog post.
Wells Fargo’s Legal Specialty Group, which assessed more than 100 Am Law 200 firms for its latest three-month survey, pointed out that inventory is growing faster than revenue. As a result, the inventory collection cycle, defined by the “number of days it takes to collect fees once work is performed,” slowed by 3.4% in the first quarter of this year.
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