How Greythorne Improved DSO by 17 Days and Freed Up $5.2M in Working Capital

The Challenge

Marcus Washington, CFO at Greythorne, had three problems that kept him up at night.

Problem 1: Billing was painfully slow. From month-end to invoice delivery took 19-21 days. Partners would review pre-bills and make adjustments. Finance would revise. Partners would want another look. By the time invoices went out, clients had moved on mentally.

"Our DSO was 73 days," Marcus explains. "Industry benchmark is 50-55 days. That gap represented $4.5M in working capital tied up in receivables."

Problem 2: Trust accounting was manual and risky. Greythorne managed client trust accounts for litigation costs, retainers, and settlement funds. The three-way reconciliation was done manually every day by two people spending 2 hours each.

"Trust accounting violations are a career-ending mistake for a law firm," Marcus says. "State bar associations take trust account problems extremely seriously."

Problem 3: Partner profitability reporting was too slow. Partners wanted to know which practice areas, clients, and matters were most profitable. But finance couldn't provide that data until 3-4 weeks after month-end.

The Solution

Marcus discovered Lateral while researching law firm finance technology. What caught his attention was the Trust Accounting Agent specifically designed for IOLTA compliance and legal trust account requirements.

Greythorne deployed three agents in February 2024: Billing Agent, Trust Accounting Agent, and Partner Distribution Agent. The implementation took 8 weeks.

"We have 35+ different billing arrangements across our clients," Marcus says. "Hourly with different rate cards by attorney. Blended rates for some clients. Flat fees for certain matters. Contingency for litigation. The Billing Agent needed to learn all of it."

The Results

Month 1:

• Billing cycle reduced to 11 days (from 19-21 days)

• Trust reconciliation automated (2 hours daily to 15 minutes daily)

• Partner profitability data available but still being validated

Month 3:

• Billing cycle down to 7 days

• Zero trust accounting errors

• Partners starting to trust profitability reports

Current State (Month 10):

• Billing cycle consistently 5-6 days

• Trust accounting fully automated with daily reconciliation

• Partner profitability data available in real-time

Quantifiable Impact:

• DSO improved from 73 days to 56 days (17-day improvement)

• $5.2M freed up in working capital

• Trust accounting time reduced by 90%

• Zero state bar trust account compliance issues

• Partner satisfaction with finance up 52%

The Impact

The cash flow improvement was dramatic.

"We improved DSO by 17 days, which at $78M revenue means we freed up over $5M in working capital," Marcus explains. "We paid down our credit line by $3M, saving $180K annually in interest. The other $2M went into the operating account, giving us much better cash cushion."