Legal Tech & Practice Management Part 2: Transform Solo- and Small-Firm Billing with Software

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During a recent consultation, a lawyer shared that they regularly did not bill the clients until the end of representation. Fortunately, most clients paid after their case had concluded. Unfortunately, one client stiffed the firm on a $50,000 bill for a multiyear-long matter that even proceeded to trial. To make matters worse, the firm had not sent any bills until the matter concluded, and the large outstanding balance enraged the client. After multiple failed efforts to collect the fees, and not wanting to risk a bar complaint, the firm elected to accept its losses and walk away from the fees.

The lawyer I consulted with was seeking practice management help to learn about billing software solutions and best practices. I further learned that the firm was struggling to get bills out on a regular schedule, which delayed its own timekeeping and contributed to an overall time-consuming billing process.

Stories like this are not uncommon among solo and small practice legal practitioners. However, billing software can substantially alleviate common pain points by offering tools to help with general accounting, trust accounting, time and expense tracking, alerts/notifications, automatic billing, billing and invoicing, billing portals, customizable invoices, electronic payments, online payments, expense tracking, invoice management, and reporting analytics.

Want more? Check out more of this blog series: “Legal Technology and Practice Management, Part 1: Practice Management Software as a Hub for Your Practice.”

Billing Software Can Help Law Firms

Many solo and small practitioners struggle with billing and get into trouble when they opt to record time “later” or not at all. The solution, obviously, is to record time contemporaneously with the work performed. A cloud-based system will help immensely.

Cloud-based billing software streamlines concurrent timekeeping by allowing a lawyer to enter time and costs from anywhere, either manually or automatically. Gone are the days of spending time with a client only to forget to input the time when you return to your computer or office. The same goes for older billing processes that tend to be clunky and inefficient.

Modern billing software not only makes it easy to enter time and track expenses at the time they occur, but some software can auto-capture time you’ve logged across multiple other applications. The automatically tracked data serves more purposes than just accurate billing; it can help track billable time and help you gauge productivity and profitability.

Send Bills to Clients More Consistently

Failing to provide the client with regular bills leads to unhappy clients who are substantially less motivated to pay you, resulting in unpredictable cash flow for your firm.  

By utilizing billing software, your firm will increase the likelihood that bills are sent out on time. Not only does the software make concurrent timekeeping substantially easier, but it provides more efficient processes for creating, sending, tracking, and following up on bills. This means your firm can spend less time on billing and more on client work and business development.

Make Your Bills Clear So Clients Better Understand the Charges

Do your clients understand their bills? Do they call you asking for an explanation of the work done? Clients who do not understand a charge are less likely to pay, or they may require more of your time to explain it.

The descriptions for each charge should be detailed. See RPC 1.5(a), (b), and Comments 1, 10, and 11; and RPC 1.4. Billing software helps you to easily draw up bills that communicate the amount owed and the work done to earn it, the attorney or paralegal who did the work, the amount of time spent, and the billing rate.

Provide Multiple Electronic Means to Speed Up Payment

When clients have to complete too many additional steps to pay their bill, it can easily result in delayed payments. For example, paying by check or with a credit card over the phone creates a friction point in the billing process and creates more work for your client and you. Check payments require the client to find their checkbook, write a check, and then physically transmit it to you. Additionally, once your firm receives it, you have additional payment processing steps to take. Even a credit card payment taken over the phone requires your firm and client to connect during business hours.

Make it easy for clients to pay you! Billing software provides multiple ways for clients to electronically pay such as credit card, QR code, and eCheck processing.

Use Software to Simplify and Properly Maintain Trust Accounts

Lawyers can be disciplined for failing to properly handle client funds. [1] Simplify the trust accounting process to ensure compliance with ethical obligations by utilizing end-to-end billing software, including three-way account reconciliation with your trust. For more information regarding managing a trust account, see the Washington State Bar Associations’ Managing Client Trust Accounts booklet.

[1] For information regarding last year’s disciplinary actions, checkout the 2021 Washington Discipline System Annual Report