How Does Billing Work in a Law Firm

One of the most important aspects of billing is consistency with your rates. A good billing solution has the ability to set prices per lawyer. When considering possible legal invoicing platforms, it is important to choose an e-invoicing software that meets your business needs. This includes the steps needed to onboard and the data to import into your new legal invoicing software. With a subscription-based law firm, you offer your clients legal services as needed for a fixed monthly subscription fee. This setup works well for small business clients who need regular help with trademark registrations, proactive intellectual property protections, transactions, and more. We get it: tracking billable hours can be a burden. This is a complaint of many lawyers. Fortunately, there are proven alternatives to legal hourly billing. Here are some options your firm should consider when billing clients for your legal services. We know that there is rarely a one-size-fits-all solution, but there is a common practice for law firm billing processes. It usually starts with your company bringing in a new customer after a phone call or email and opening a case (or opening a new thing for an existing customer). A standardized billing practice makes things easier for everyone.

Your customers know what to expect, and they`re less likely to dispute billing, and you`ll be better able to track your spending. What lawyers often forget is the free choice associated with any lawyer-client relationship: for each client hired by a law firm, the same firm had the option to refuse this assignment from the outset. Law firms that make the decision to review and accept good clients are paid higher percentages than law firms that take advantage of every opportunity that arises. If you want to test if a customer will pay you in the future, ask them to pay you in advance. Calculating reasonable advances will eliminate customers who say they`ll pay you, but really can`t. A type of provision called a «standing provision,» where it is the customer`s responsibility to reset the provision to an amount billed at predetermined intervals, allows you to test your customer`s ongoing commitment to paying you over time. prolonging detention; If it is not respected, do not renew a fee agreement. When you receive invoices on time and at the same time each month, your business can set up faster. You may not have learned much about billing as a law student. Legal ethics was the only course in my law school that covered billing, and even briefly. I vaguely remember learning a bit about RPM billing, but it`s (rightly) not a much-tested topic. Consider your legal billing policies (also known as external attorney guidelines) as the foundation for creating a positive and meaningful partnership between legal departments and law firms.

Policies are one of the most effective ways to control your legal expenses and build stronger working relationships. To keep your billing process on track, keep a close eye on outstanding balances, payments, and earnings. The following reports can help you monitor the financial health of your law firm and ensure the smooth running of your billing process: Depending on your area of practice, hiring a lawyer can be one of the most expensive things your client can do. Save them unexpected bills: Set clear expectations about what customers can expect on bills, when they`ll receive them, and how they can pay. Your business relies on getting paid quickly to stay afloat. A clean, concise and consistent billing process is the way to ensure this happens. The cornerstone of the billing process is often the billable hour. First, create a fee agreement template and well-defined policies that define your billing policies. These guidelines should include elements such as when invoices are sent in the life cycle of a case and how detailed descriptions should be. Creating an effective invoicing workflow in your law firm may seem like a daunting task, but rest assured, it`s an achievable goal. Not sure where to start? Here are some implementation ideas that will put your business on the path to a streamlined legal invoicing process, saving a lot of time and speeding up customer payments.

What are billable hours? This has long been discussed in law firms. The practice is alive and well, but many lawyers argue that this is not the best way to bill for legal services – at least not for all practice areas. Regardless of the type of fee agreement you enter into, it is important that clients and the lawyer put the fee agreement in writing. This agreement should include the billing method, hourly rate or contingency fee amount and discuss the concept of «provision». While this legal billing process is relatively concise, there is plenty of room for bottlenecks in implementation. Let`s see how you can streamline your billing processes. When creating a fee agreement, you should clearly describe two things: your payment method and payment requirements. Make sure the customer is aware of your billing procedures and payment terms. Be honest about your prices and explain when they can expect to receive the bill.

Flexibility — The software must be customizable to meet the unique needs of your law firm and those of your clients. If your company works with larger clients, your invoicing process may include an additional step: formatting your invoices to use LEDES billing codes for time and expense entries. Investing in legal invoicing software to make your process smoother can be invaluable to your business: Chris Trebatoski of Treblaw LLC receives all his invoices in about 15 minutes each month with Clio – a task that took him much longer in a large company. Reducing friction for your customers is a great way to provide quality service. A simple billing system makes it easier for customers to understand what they owe and is more likely to pay on time. This focus on quality and comfort makes the company more professional and competent, builds trust and strengthens relationships. One of the most common billing mistakes made by some lawyers is non-regular invoicing, as these tasks are an interruption of the important tasks they need to perform. However, if you let weeks or months go by without billing customers, the task becomes more difficult and you are less likely to get paid. Constantly sending small invoices can reduce the shock of an unexpected large invoice for your customers. Plus, there`s the added benefit of generating positive cash flow for your law firm.

If you`re low compared to your state`s average billing rates, consider raising your rates. If your prices are higher, think carefully about how to add value to your customers to make that rate meaningful. The goal is not to overwhelm your law firms with conditions that cripple their ability to do a good job. The key here is to set clear expectations. Legal billing policies don`t have to be complex. Think of your fonts as a living document that you constantly create and iterate as your legal team grows and changes. Under a limited scope agreement, you and your client would define your company`s involvement in the case, probably to a limited extent, and your services would only include those tasks. A common example is retaining tips in an eDiscovery process. A billing specialist in a law firm typically does the following: invoicing, payment collection, and preparing/submitting financial reports for review. You are responsible for maintaining an orderly accounting system and ensuring that all financial obligations are met in a timely manner. In addition, billing specialists may participate in contract negotiations with clients or other legal professionals.

You may want to go beyond general billing procedures for law firms, for example, explain how providers should charge certain expenses and fees. For example, if you limit the number of hours that can be billed to certain UTBMS task codes, be sure to include this information in your billing policies. #invoice #billing #accountsreceivable #ar #bookkeeping #accounting #bookkeepingservice #irvinebookkeeping If you use an hourly fee agreement, lawyers in your firm should record and enter their time frequently (and ideally daily). As you know, technology can help you, and it can also help your lawyers create templates with descriptions of tasks completed and invoiced. If you are using a system like SimpleLegal, describe the invoice submission process through CounselGO. Describe the process of starting a new legal billing system, set the invoice filing schedule, and provide key contacts for billing-related requests. Bend Law has found that using Clio Payments software has significantly improved the invoicing and collection process: invoicing is critical to the success of your law firm. And yet, law firm billing, including client billing and tracking payments, can be one of the longest, repetitive, and dreaded parts of a lawyer`s day. The Accounts Receivable report helps organizations determine the outstanding amounts of all outstanding and outstanding invoices per user, per customer, and per case. The report includes amounts due for approved unpaid invoices, partial payments on those amounts, and credits for invoices.