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10 Tips for Improving Law Firm Invoicing and Billing

10 Tips for Improving Law Firm Billing and Invoicing

The ABA Journal has a full page graphic in this month’s print edition: Many small firms face big payment problems.

The graphic is based on data from a LexisNexis billing survey of small law firms published in the second half of last year.  In contrast to billable hours survey previously conducted, this survey aimed to learn about the billing and invoicing process within law firms.

The commentary in open-ended questions was especially revealing: 8 Things Lawyers Say they Would Change about Billing.

Law Firm Invoicing and Billing Tips

Certainly, technology, such as law firm practice management tools (both cloud and premise solutions) has an enabling role in efficient billing practices, but there’s also a strong demand for fundamental ideas.   To that end, here’s a sizable list of curated tips from around the web, with links to the sources which are well worth perusing:

1. Dan Pinnington | Slaw:  20 Tips to Improve the Finances of Your Practice

Many accounting and practice management software products can give you detailed reports that break down your time and billings by file, client, matter type, practice area, etc. Review these reports to better understand where your time is going and how profitable different areas of your practice are.

2. Bruce Stachenfeld | Above the Law: In Defense Of The Billable Hour

So if one looks at the billable hours as an excuse to overcharge for inefficiency, then of course that is a bad thing – no question about it. But if instead one comes at it from a different direction — namely, that the billable hour is merely something to look at to “prevent” overcharging, and a methodology to evaluate the fairness of a bill — maybe it is an excellent mechanism after all.

3. Gabriela Isturiz | Bellefield Blog: 7 Habits of Highly Effective Timekeepers

Begin with the end-goal in mind. Yes, timekeeping can be a bit of an annoyance when you are thinking about how to manage your caseload and win new business. That’s why it is important to understand the overall goal of keeping time. Timekeeping is important for the firm to get paid, yes; however, it’s not just about that. Timekeeping is important for the firm’s financials and projections and sets the stage for billing accuracy, which can play into client satisfaction and loyalty.

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4. Andrew Strickler | Law360: 5 Things You Should Never Bill For

As a rule of thumb, partners and associates should avoid billing for time they spent calculating their bills, or otherwise invoicing for anything that might look like a pure administrative task.

5. Francis Drelling | Law360: A General Counsel’s Top 10 Billing Tips

No $3.50 Invoices. Nothing makes an in-house counsel feel like they are being nickeled-and-dimed more than receiving a $3.50, stand-alone invoice. Plus, with all of the issues we have to address every day, forcing anyone to spend time on a $3.50 invoice is, quite frankly, just not cool. I understand that people need to be paid. However, when you have an extremely small invoice, my advice is to simply combine it with your next bill. Receiving one of these invoices makes me wonder if anyone is even reviewing the pre-bills.

6. Peggy Gruenke | GPSolo: Back-to-Basics Business Tips

Billing Early, Often, and Strategically. Clients appreciate the services you provide, but it is really the value that you are providing that is most important. To that end, bill when their perceived value is the greatest. As each day goes by after an event, your value gets diminished. Send an invoice to a client after a favorable result or a productive phone call. If you send out that bill two weeks after that phone call, the client will not perceive the value to be as high.

7. Sally J. Schmidt | Attorney at Work: Billing is Marketing

Be careful how you describe your time. Whether it is when you enter time or when you look at your pro formas, augment the terse computer language. Let’s use “office conference” as an example. First, clients don’t like paying for you to talk to other lawyers in your firm. Second, it provides zero insight into the value provided by the meeting. Instead, focus on what you did, for example, “Reviewed requirements for shareholders’ agreement,” “Analyzed tax issues in proposed trust” or “Met with Attorney A to discuss outstanding issues in settlement agreement.” And name names.

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Related content:
Top 10 Law Firm Collections Challenges and How to Solve Them
5 Essential Practice Management Reports for Small Law
Six Business Metrics Every Law Firm Should Measure
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8. Chris Hargreaves | Tips for Lawyers: Time Recording – A Primer on Billing “by the unit”

Make it part of every task. Time Billing is a habit – you need to get used to doing it every time you do anything. Note the start time, the finish time, and then enter the time. Doesn’t matter if you’re using paper, excel, or a purpose made system – it’s a matter of “garbage in, garbage out” – so do it as you go and make sure that you do it accurately. If you’re ever in doubt about this, picture yourself being cross examined about a particular time entry on your client’s bill, and then answering questions about its accuracy. If you’re comfortable with that, then you should be OK.

9. Stephen Fairley | The Rainmaker Blog: Tips for How to Bill Smarter

Include “No Charge” line items on your bills. Just about every lawyer does stuff for his or her clients that aren’t billed. Keep a list of those freebies as you go through your month and then include them as line items on your bill with the notation, “No Charge”. Instant added value! Genius!

10. Cindy Greenway | LawMarketing.com: Law Firm Client Billing: 5 Ways to Show Your Value

Provide Specific Details. Avoid general statements that describe the work performed. Instead, include specific details on the work that was completed – for example “Analyze pleadings and discover in order to evaluate factual and legal support for a motion for summary judgment” instead of simply saying “Reviewed case file.”

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What tips would you add?

If you enjoyed this post, you might also like:
5 Solid Tips on Law Firm Billing and Invoicing

Photo credit:  Flickr, Wystan (CC BY 2.0

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About Frank Strong

Frank Strong
Frank Strong is the communications director for the LexisNexis software division located on NC State’s Centennial Campus in Raleigh. In this capacity, he leads communications efforts in support of software products for law practice and law department management and also litigation tools – across large law, small law and corporate counsel segments. With more than 15 years of experience in the high-tech sector, Strong previously served as director of public relations for Vocus, which developed marketing, PR and media monitoring software. He has held multiple roles both in-house with corporations, ranging from startups to global organizations, and has also endured the rigors of billable hours, having completed gigs at PR firms including the top 10 global firm Hill & Knowlton. A veteran of two year-long deployments, Strong has concurrently served in uniform in reserve components of the military for more than 20 years, initially as an enlisted Marine and later as an infantry officer in the Army National Guard. Strong holds a BA in Film and TV production from Worcester State University, an M.A. in Public Communication from American University, and an M.B.A. from Marymount University. He is a PADI-certified Master Scuba Diver and holds a USPA "B" skydiving license.
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