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June 29, 2015

4

The ‘2xFISTed’ Bill

by contributor

 

The “2xFISTed” acronym turns legal billing into effective marketing and helps ensure bills are paid promptly.

A bill is a communication with a client, which means it is a marketing opportunity. Use this “2xFISTed” acronym to remind you how to make your bill shine and increase the likelihood that it will both get paid promptly and speak to the value you offer your client when she looks at it.

Friendly and Formal
The bill should look professional, be consistently branded to your firm, and be friendly in tone. Have you ever gotten a check from a restaurant server who hand-wrote “Thank you” or something else pleasant? A personal touch leaves a big impression. Think about what positive message you would communicate to this client about her account, such as, “Thank you for choosing me to represent you,” and add it to your bill.

Itemized Invoice
The bill must be itemized precisely. When you track time, try to do a separate time entry for each task so that you can list each one distinctly as a line item on the bill. For example, if you worked on a petition, a deposition, and a parenting plan for a client in one sitting, log them and list them in separate blocks.

Do not acronym your client to death. The client will not know your shorthand (e.g., “depo,” “rogs,” “rads,” and “pet” were a few of mine). If you use them frequently, consider having them explained in an easy-to-locate legend on the bill — but it will be easier for your clients to understand if you take an extra minute to type terms out.

Simple and Sensible
The bill should be simple to understand and for a sensible amount. It is often a reality check for the clients. Legal services can add up quickly; some verbal communication to over-communicative clients should occur beforehand, so they are not shocked when the bill is more than they expected.

But it’s also necessary that the bill be a reasonable amount for the work you did. If you spun your wheels in research before you came up with the right search terms or concept, or if you had to research something that a seasoned lawyer would not have, you might not charge for this amount.

Be warned, though, that this is a danger zone for new lawyers. I often see over-discounting from new lawyers who think seasoned lawyers would automatically know everything. Seasoned lawyers need to do a fair amount of research and thinking on their cases, too. Also, remember that you already charge a lower rate because you have less experience, so discount sparingly. If you find that you have a propensity for over-discounting, have someone you trust — maybe a mentor or colleague — look over your bill before you send it out. Then adopt their advice into your billing system.

When you apply discounts, do not remove the line item from the invoice. Just note the discount or tag it “no charge,” so the client knows the full extent of the work done. This is both good communication and good marketing.

Timely and Transparent
A timely bill is one that is not at the very end of representation or after months of representation. A timely bill is sent out monthly, or bi-monthly at the most if the case is inactive. Try to time your bills for when the client is most engaged and prepared to pay. (If the client stops paying, do not ignore the fact and continue to work on the case.)

Transparency is something lawyers are often accused of lacking, so set yourself apart in this regard. Do your best to make sure the bills accurately reflect the work you did — nothing more and nothing less. I know of a law firm that has an “adjustment line” or “write-in line” on every bill they send out to clients, where the client can actually write in what she wants to pay for the services. She can write “$0” or she can cut the bill in half. She could even write in more than what she was billed and pay that amount.

This may sound scary, especially to solo and small practitioners, but think of it as an opportunity to improve client relationships. Without the write-in line, you have a disgruntled client who pays the bill and silently curses the firm every month — until it boils over and she suddenly fires the firm. Instead, you can have a discussion with her early on. The conversation could start something like this: “I see you think the bill was too high and that you feel it should be half the price. Let’s talk about why that is and how I can help. If you do not see the value of my services as I see them at the end of this talk, that will absolutely be your fee.” This is just one way to make your bill a transparent tool for communicating with your clients.

With 2xFISTed bills, you will find that clients respond positively to paying for your legal services. (And if they don’t, you have important information that you need in order to repair or end that relationship earlier on.) Clients who don’t pay because they don’t have the money are a different issue — but that’s a topic for another post.

Want to learn more? I’ll be presenting on “Billing Clients Made Easy” at the 10th Annual Solo and Small Firm Conference in Spokane, July 9–11. Registration is open now. I hope to see you there!

4 Comments Post a comment
  1. Jun 29 2015

    Reblogged this on Oregon Law Practice Management and commented:
    Great advice from our friends at NW Sidebar on using 2xFISTed billing – a handy acronym to help you remember the optimum approach for preparing and presenting client bills.

    Reply
  2. Jul 4 2015

    1. With respect to timeliness: TRUE STORY – a young lawyer (not me) undertook to represent a friend in a dispute concerning a fence between two houses. Letters flew back and forth, motions were filed, legalities were lawyered with great skill. After about a year of this, the young lawyer sent a heavily discounted bill: $3000.

    Now that young lawyer is short both a fee and a friend. Perhaps if after the first month, she had sent a bill when it was only, let us say, $300, she would have both.

    2. Certainly the FF/II/SS/TT concept appears sound; however the acronym “2xFISTed” is confusing.

    Where does the “ed” fit in? What does a fist have to do with billing? What part of speech is the acronym? If it’s the adjective “two-fisted” that may carry an unfortunate connotation with respect to client relationships, but if it’s a verb, that may be even more unfortunate.

    Reply
    • Oct 12 2016

      Rewinn is right. I came up with a terrible acronym, but the main goal was that it stick in the mind.

      The True Story is all too common. Thank you for commenting!

      Reply
  3. Nov 3 2016

    It definitely sticks in the mind! and if it helps people remember the technique I suppose that’s the main thing (and finding an acronym that hasn’t been used before is …. hard 😉

    Reply

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