How a Legal Billing Software Will Help You Turn Expenses into Invoices

LEGAL-BILLING-SOFTWARE-26
23 Oct

How a Legal Billing Software Will Help You Turn Expenses into Invoices

LEGAL-BILLING-SOFTWARE-26

Using a Legal Billing Software for Cash Flow

The typical law firm will operate with a relatively simple formula. They will hire young lawyers who are mentored and monitored by partners in the firm and other experienced staff members, will pay their salaries and attract clients for their business. Salaries to lawyers are often projected to represent about a third of revenues, with another third for overhead and the remaining third for profits. Law firms major costs therefore are mainly the salaries that they pay and the overhead costs that they cover. Finding ways to improve on this formula can greatly improve on revenues.

Using a Legal Billing Software to Increase BillingsĀ 

A law firm billing software program operates by lawyers capturing their billable hours and attributing them to the various clients that they work on. Each line item that they input, which can be as small and minute as ten minutes, will have information that lets the client know what they were working on to avoid any potential refutation of charges. Many clients will have some real sticker shock when they get an legal invoice because, lets face it, legal expenses are not small. A law firm billing software program can help to avoid these issues and allow your firm to charge clients appropriately for the services incurred and turn the largest expense item in your firm, the cost of hiring, paying, and retaining employees into revenues.

Law firms can also find employees who aren’t contributing to the firm through billable hour printouts and finding ways to focus on improving their performance or replacing them with more productive alternatives in the firm. In the long run, replacing unproductive lawyers can help a firm to turn their payroll expenses to revenue and invoices.

Keeping Track of Expenses Incurred on Behalf of Clients

Lawyers will often pay or incur costs on behalf of their clients which they can then pass through with reimbursable expense charges. Keeping track of these expense reimbursables can be a real challenge for a law firm and sometimes may not be worth the effort without a well designed system such as those that are available through law firm billing programs or expense reimbursement programs that allow a firm to automate the invoicing of these expense items.

Some typical client related expenses that you can probably recover through charges may include:

– travel costs relating to the clients case
– costs associated with obtaining and retaining specialists to represent the client and testify on their behalf
– meals and entertainment costs incurred on behalf of clients
– filing and court fees incurred
– printing and report fees created on behalf of the client

A Legal Billing software program can help you to properly accumulate these charges so that you can bill them back to your customers appropriately and not lose track of them. While being able to pass on these costs is part of any standard contract with a lawyer, many firms will simply lose track of them and miss charging them. Studies by the Washburn University and the Florida State University Law Practice discussed how improved efficiency of charges can greatly improve on the total charges that you can often pass on to your clients in this way.

Integrating a Legal Billing Software With Your Finance Software

It is also a good idea to try to integrate your legal billing software with whatever accounting ERP that you use as your law firm can then quickly and efficiently send out invoices and not spend money on expenses for clerical accounting work that is really no more than data entry. Automated accounting systems that integrate with your billing software are more than just efficient ways to lower your cost structure with the creation of invoices, but also a way to avoid clerical mistakes that may end up resulting in you having to revise invoices and potentially miss out on being able to charge for these amounts.

Billing software programs that are designed specifically for law firms can therefore provide some real valuable services for firms that are looking to improve on their efficiency and to turn what are and could be expenses, into invoices and revenue. Look for an billing software that allows your employees to efficiently and effectively capture their time and which integrates with software that allows you to charge your clients seamlessly. Even though the legal industry isn’t a technology driven field, there is no reason why technology cannot make your law firm more efficient and effective in the business world and help you to grow your profits.

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