Effective billing practices is essential to the success of any law firm. Accurately capturing all the time spent working on cases and turning them into billable hours is important to every law firm. While using law firm billing software
can help with accounting
for the hours spent on legal projects, legal billing software alone isn’t the answer. There are a number of other steps law firms can take to make billing smoother and more accurate.
There are several proven methods and techniques law firms can use to get a handle on their billing. The following are a few many successful law firms have used to improve the accuracy and effectiveness of their billing practices.
1. Create Clear and Simple Invoices
2. Record Billable Hours Promptly
3. Use Legal Technology
4. Good On-Going Communication
Many billing problems are rooting in misunderstandings between the law firm and the client about exactly what tasks the billing invoice covers. In some cases the person on the client’s staff responsible for checking and paying the invoices may not understand some of the technical legal terms used in the invoice. In other instances they may be confused by block billing and what tasks were done during the block of time for which the client is being billed.
The solution is to avoid block billing and instead include a clear description of each task performed and how long it took. The law firm should also make sure not to use too much ‘legalese’ when creating invoices. Often the people charged with paying the invoice have no legal training and when complex legal terms appear on the invoice, they put it aside until they get further clarity. This creates bottlenecks and delays payments. Using clear, simple terms can solve this problem and keep the payments for the billed hours flowing.
One of the keys to keeping an accurate record of the hours spent working on a client’s behalf is to develop the habit of entering the length of time it took to complete a task into the law firm billing software or on a note pad as soon as the task is done. Taking a moment to do this not only ensures the firm will be paid for all the time it spent on the case. It also helps the client understand what was done, when it was done and how long it took. Most clients appreciate this and it also helps to speed up the length of time it takes for the legal bills to be paid.
When legal staff wait until the end of the day, week, or month to record the amount of time they spent working on a particular task or project, it can lead to inaccuracies and ‘guestimations’. To some clients that is equivalent to perjury. In actuality waiting too long to document the number of billable hours it took to complete a task can end up hurting both the law firm and the client. It can lead to overestimations, underestimations and confusion. Recording the time right away eliminates that problem.
There are many types of law firm billing software and other technological tools available that law firms can use to improve the accuracy and flow of their billing processes. These are designed to meet the unique needs of attorneys. These types of legal billing software can make it much easier for attorneys to record the amount of time they spend on each task related to a case. The software and other tools also enable the attorney and other staff at the law firm to compute the number of billable hours spent on a case by simply pressing a few buttons.
Some firms use the Longshore Case Management System while other firms use different systems that they find better suited to their needs. The key is to find one that’s easy to use and improves billing accuracy.
4. Good On-Going Communication
Clear communication between a law firm and their clients right from the start can usually prevent billing problems from occurring. If the law firm establishes a reasonable fee agreement and puts it in writing before they begin to work, that can help to avoid confusion and billing issues. The firm should also provide a clear description of the legal work they will perform and agree on a billing schedule. Any additional fees, added expenses or rate increases should be discussed with the client before implementation.