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.
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Software Search and Comparisons
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In our rapidly changing world, disaster planning is a critical aspect for legal professionals. Whether facing natural calamities, technological disruptions, or unforeseen emergencies, law firms must be well-prepared to navigate challenges while maintaining business continuity and serving their clients effectively. Regardless of the specific threat, its impact on a law firm’s operations can be severe if adequate preparation is lacking. The consequences may include financial losses, reputational harm, regulatory penalties, and even a loss of client trust. A robust disaster plan acts as a lifeline, ensuring that firms can weather storms and emerge stronger on the other side.
Key Elements of a Comprehensive Disaster Plan
To fulfill their professional responsibilities and protect their firms, legal professionals should develop a robust disaster plan. Here are key elements to consider:
- Risk Assessment: Begin by conducting a thorough risk assessment. Identify potential hazards—both internal and external—that could disrupt your firm’s operations. Consider natural disasters, cybersecurity risks, emergent medical issues, and operational failures. Understanding these risks is essential for effective mitigation.
- Business Impact Analysis: Perform a business impact analysis. Assess the potential consequences of various disaster scenarios on your firm’s operations, finances, and reputation. Identify critical functions, dependencies, and recovery time objectives to allocate resources effectively.
- Emergency Response Plan: Develop clear procedures and protocols for responding to disasters. Establish chains of command, communication channels, evacuation routes, and regularly train employees. Safety and client well-being are paramount.
- Data Backup and Recovery: Implement robust data backup and recovery systems. Regularly back up electronic data and store copies securely offsite. Develop procedures for restoring data swiftly in case of a data loss incident. See the Washington State Bar Association’s Law Firm Guide on Cybersecurity for additional assistance with cybersecurity issues.
- Communication Strategy: Establish a comprehensive communication strategy. Designate spokespersons to liaise with clients, employees, regulators, and the media. Maintain up-to-date contact lists and alternative communication channels.
- Continuity of Operations Planning: Create a business continuity plan. Define roles for key personnel, identify alternate work locations, and outline procedures for resuming normal operations promptly. You can download a form plan here.
- Training and Testing: Regularly train employees on disaster protocols. Conduct tabletop exercises and simulations to test the effectiveness of your plan. Review and update it as needed to adapt to evolving threats.
Designating a Custodian
Consider designating a custodian (sometimes called an “assisting attorney”) responsible for implementing and maintaining the disaster plan. The custodian should have the authority to make critical decisions during a crisis and coordinate response efforts across the firm. Memorialize the custodian’s role and responsibilities in a written document to ensure clarity and accountability.
Disaster Planning and Professional Responsibility
Licensed legal professionals in Washington State bear a solemn duty to competently represent their clients. This duty extends beyond routine legal work; it encompasses the responsibility to prepare for unforeseen events that may disrupt normal practice. Let’s delve into specific aspects of these professional obligations:
- Reasonable Diligence and Promptness. Rule 1.3 of the Washington Rules of Professional Conduct (RPC) emphasizes the need for legal professionals to act with “reasonable diligence and promptness” when representing a client. Unreasonable delays can cause needless anxiety and erode confidence in the lawyer’s reliability.
- Protecting Confidential Information. Confidentiality lies at the heart of the attorney-client relationship. Under RPC 1.6, legal professionals cannot reveal information related to a client without their consent. This rule necessitates reasonable precautions to safeguard client information from inadvertent disclosure—even during times of crisis. Losing access to critical documents or data due to a disaster could compromise client confidentiality and trust.
- Document Retention Requirements. Document retention is more than administrative housekeeping; it directly impacts a lawyer’s ability to serve clients effectively. RPCs 1.15A and 1.15B mandate the maintenance of records and documentation related to trust accounts and property for at least seven years.
A Call to Action
The legal profession thrives on preparedness. Disaster planning isn’t a mere checklist; it’s our duty. As we navigate the unpredictable, let us equip ourselves with robust plans, protect client trust, and emerge stronger.
