Reports of the billable hour’s death have been greatly exaggerated. In fact, the opposite might be true. For the first time, associates at Biglaw firms command more than $1,000 per hour. Some partners reached this threshold more than a decade ago.
Of course, there is much more to billing than sending out bills. Actions like collections and appeals often consume much of a law firm’s time. Even if your firm has a business manager, if they spend all their time on billing matters, they have nothing left to devote to strategic development, staff development, and other issues.
Your attorneys probably do not command $1k per hour. So, every penny is precious. As a result, if you do not have an efficient legal billing process, you are losing money every month. And, you probably did not become a lawyer to make money, but you don’t want to lose money either.
Invest in Top Legal Billing Software
Platforms like Clio are ideal for sole practitioners who just hung out their shingles or semi-retired attorneys who only work part-time. If your law firm does not fit into these categories, top legal billing software is worth the investment. However, be sure you are not paying for functions and services you seldom or never use.
Post Time Daily
Contrary to popular myth, lawyers are human. And, human memory degrades much faster than people think it does. On average, people forget:
- 50 percent of new information within one hour,
- 70 percent of new information within twenty-four hours, and
- 90 percent of new information within one week.
It is important for all timekeepers to post daily and not wait until the last minute. Posting from memory leads to vague time entries, and clients often appeal such entries.
Additionally, many people underestimate the time required to perform a certain task. A court hearing might last less than an hour. But many people forget to include the time spent waiting for the judge, preparation time, necessary follow-up, and so on.
Use a Web-based E-Bill System
These systems might not be the best thing since sliced bread, but they are in that neighborhood. Most people pay most of their bills online. But not any system will do. Clients expect e-billing systems to be user-friendly, easy to navigate, and secure. A system should convert invoices to LEDES files, thus reducing e-billing rejections, improving productivity and boosting profitability.
Accept Credit Card Payments
On a related note, all firms should accept credit card payments and include a payment link on emailed invoices. Payments will be made faster with the option to use a credit card for payment and a link that directs them to pay via credit card when invoices are emailed. Yes, credit card payments increase overhead, because of swipe fees and other such costs. But the convenience, for both you and the client, is worth the cost.
Delegate Administrative Functions
Once upon a time, lawyers performed their own administrative tasks and billed their normal rate. No longer. Today, clients will not pay for an attorney to file, type, and organize. On a related note, most clients no longer pay for intra-office conferences.
Pay Attention to Billing Guidelines
Corporations which regularly work with lawyers typically have billing guidelines. These guidelines usually specify the items the client will, and will not, pay for. Many guidelines also include billing deadlines. These deadlines often differ from firm timelines. Carefully reviewing guidelines and tailoring bills accordingly reduces short pays and account appeals.
Avoid Vague Billing
As mentioned, it is important to provide descriptive details when posting time. Clients will short pay invoices for vague descriptions. Additionally, specific bills arguably fulfil ethical obligations to keep the client informed of ongoing legal matters.
Stay on Budget
Most clients set budgets for specific projects. As a general rule, once the billed amount reaches 80 percent of the budgeted amount, it’s time to ask the client for a higher budget.
The Changists are dedicated to making your law firm more profitable and more efficient, so contact us today.