Accurate legal billing is essential to any successful law practice. Many law firms depend on legal billing software
to track the billable hours of their staff. But often using law firm billing software isn’t enough to capture all the nuances of legal billing for the diverse clients and cases with which many law firms are involved. While the legal billing software is effective in a large percent of cases, the complex tasks law firms sometimes perform sometimes require using supplemental system in order to be accurate. Otherwise both the client and the law firm may be unsure exactly how many billable hours it took to handle a complex case.
Creating detailed descriptions of the tasks involved in handling a case is an excellent supplement to legal billing software. A clear description of the tasks performed makes it easier to create a well-drafted invoice when it’s time to bill the client. The description should contain enough detail so the client can judge the nature and importance of each task performed. It must also be brief enough to eliminate ambiguity and make it easy to understand. It should quickly explain what task the firm performed and why they did it.
Sometimes law firms list several tasks into a group, provide a block summary and enter it into their law firm billing software as a single time entry. This raises questions for some clients. They see block billing as a way to disguise inefficiency. Some courts don’t accept block billing because it hinders accurate and effective reimbursement of the fees an attorney is due after a judgement is rendered. Itemizing each activity separately along with the amount of time it took is a more effective billing method.
Another tip for keeping your billing accurate is to immediate record your time when you complete a task. Trying to go back after-the-fact and fill in what you did on a specific day, week or month is very difficult and can lead to guestimates and clients may accuse you of padding the time spent on the task. If it is impractical to enter the time into the legal billing software upon completing a task, record it in a notebook and add the exact amount of billable hours to the timekeeping software as soon as possible.
The billing procedures and policies of each client can vary greatly. They may have unique budgetary guidelines, staffing limitations, specific timekeeping guidelines and special disbursement policies. These are commonly listed in their engagement or retention letter. Being aware of the ground rules from the beginning can help you keep the required accounting of your time and better meet client expectations.
5. Consider Your Audience
When recording your time entries and billing report, consider that the document may be reviewed by in-house counsel, accountants, third-party auditors and other individuals that may not have legal training. Even though you were trained to do it a specific way in your Harvard Law School Case Management class or at the University of Georgia, avoid complex jargon, abbreviations or slang. While you should use concise legal terminology, make sure it’s clear enough to be understand by someone with simply a legal assistant certificate.
6. Make Precise Time Entries
Whether you are a partner, associate, paralegal or a member of the litigation support staff, you may be required to record your time in increments of five, ten, fifteen or thirty minutes. In some cases the client has some specific time recording directive they want you to follow. Regardless of the length of the interval, it’s important to be precise. Corporate clients are increasingly using task-based billing and coded invoices that are sorted, analyzed and paid electronically. In these systems, imprecise time entries can end of costing law firms lots of money. So accuracy is vital.
Proper billing practices can make the difference between success and failure for a law practice. Billable hours is a law firm’s life blood. As the billing systems being used by clients becomes increasingly complex and sensitive it is essential that everyone at a law firm that is involved with doing tasks that are billed to a client take every step possible to ensure their legal billing is prompt, accurate and easy to verify. With many clients now using computerized bill paying systems and specialized software, making sure that legal billing in done properly is more important than ever.