In a law firm, timekeeping and billing are vital elements to its success. Just like in any business, timekeeping and billing work hand in hand. Keeping timekeeping organized and ensuring that you bill is a necessary evil.
For lawyers, the primary responsibilities include providing legal guidance and services. In most instances, being a good attorney means that you have to dedicate a lot of your time to your clients' needs.
For those who are managing a law firm, the responsibilities grow beyond the practice of law. If you aim to become a successful law firm manager, then it is vital to dedicate your attention to your law firm's overall health and best business practices.
As I have mentioned earlier, an essential aspect of managing a law firm is billing and timekeeping. When a law firm does not meticulously keep track of time, it can be a stressful ordeal to bill your clients effectively.
If there are issues with the billing, the law firm will not get paid. Understandably, if not paid, your law firm will not last long in this highly competitive field.
These seven action steps can help your law firm to establish a more robust and successful name in the legal field and help you gain more clients in the long run.
There is no secret that law firms work under the "eat what you kill" mentality. In simple terms, you get paid for the tasks or services you perform. I believe that it is vital that the timekeeping and billing aspects must work hand in hand throughout your business.
A law firm should note every service, email, and activity as "billable" or include a time card precisely to these to maintain accurate recording.
As for the billing, I suggest looking for a system that allows you to post expense cards, matter costs, and draw payments from retainers while at the same time ensuring that the operational and trust account balances are regularly updated and compliant.
Remember that communication is key to this aspect of your practice.
Separating the timekeeping and billing from the accounting by utilizing multiple systems can be a big mistake for your law firm.
Today, lawyers are working while on the go – trains, planes, buses, and cars. I know it can be a hectic week, even up to the weekends. Generally, work happens in any location and at any time. With this in mind, I highly recommend considering a legal billing and timekeeping system that supports this.
Listing your time and expenses on a piece of paper is not a practical approach and will surely increase the risk of lower billing in your law firm.
It might be time to look for a legal CRM that has billing and timekeeping system functionality.
This lets you closely monitor your activities and expenditures on any device to make sure that you have a record of every single billable activity as it happens.
Depending on your law firm's specific requirements, I suggest that you consider Naartjie Legal - "LAW PRACTICE MANAGEMENT that is Easy to Use!
This is an intuitive software that allows law firms to manage the timekeeping and billing aspects of the job efficiently. Lawyers designed this software and it has a user-friendly interface along with a fast learning curve.
There is a high likelihood that your bills are not the only ones your client receives. Once your bills are not readily identifiable or hard to understand, they are often overlooked and unpaid.
The Naartjie Legal billing system allows your law firm to create customizable invoices to ensure a clear reflection of your brand and business. Match the logo of your law firm and contact details with customized messages for every client. This is a sure way to let them know whom they are paying and what they are paying for.
Although I have to say that this can take up some of your precious time, it is a breeze to handle with the help of today's technology. You can easily send personalized invoices to all your clients with just a single click.
When it comes to the invoices that you provide to your clients, I suggest making one that is easy to understand but contains all the pertinent details. Include information that justifies the need for the completed task without using many words.
Avoid overusing general terms that cannot adequately explain the services or the necessity of a particular task. Make sure that you are specific with the billing descriptions. Take note that the invoice serves as a representative of how well you operate to accomplish a task.
Do not forget to itemize every activity and the extent of time labored. Steer clear from "block billing" in which a series of tasks are grouped in single time entry. I know that the majority of clients complain about this form of billing.
For those who are eager to take the next step to improve the image of their law firm, I recommend using a client portal. The client portals which can be labeled can be readily added on the website of your law firm. An advantage of this portal is that it simplifies the communication process and the dealings with clients.
With a single, secure portal for your clients to check the statements, share documents, and present payments, it not only boosts the reputation and professional image of your law firm but also increases the cash flow.
If your law firm has not been accepting payment via credit cards, it might be time to switch – accept credit card payments. By accommodating credit card payments, it allows your law firm to cater to more clients. By making this payment option available to your clients when billing them, they are more likely to pay your law firm on time for your services.
Based on the latest industry statistics, it shows that law firms who accept payments via credit cards from clients have a 30-40% improvement when it comes to cash flow.
However, accepting credit cards might result in issues if it is not implemented correctly. Always make sure that your law firm sets up an efficient and secure billing system in place with the following considerations:
• All fees must not automatically be subtracted from your trust account.
• Capable of managing large deposits
• Uses a credit card retailer that presents complete deposits into trust accounts
Although billing your clients ensures a steady flow of income for your law firm, you will not generate any earnings if you solely focus on managing the billing system.
I know that this can be a challenge for smaller firms since there is not enough staff to handle the task. In such cases, I suggest looking for a system that enables your law firm to handle payments readily, send invoices, accept credit card payments, and even deliver past due notices with just a few clicks.
When you have a useful timekeeping and billing system in place, you can switch your focus to practicing law and catering to your clients' legal needs.
In a law firm, it is also important to encourage personal responsibility among young associates when discussing the business practices to be observed.
Lawyers should accurately monitor their time. You can then analyze their contributions to the firm, whether it is chargeable hours, marketing or promotional activities, client development, and many more.
Create a work culture where all staff understands that their contribution to the firm will significantly help make the billing process an efficient one. This must be a main priority. Working together with an efficient timekeeping and billing system in place will be the key to the success of your law firm.
Managing a law firm requires proper organizational and managing skills, especially when it comes to billing and timekeeping issues. With these Seven Action Steps, lawyers can improve their timekeeping and billing; it can make the process a lot more manageable while providing superior services to your clients.
If you need to make changes now – make it happen. Always make sure that the billing and timekeeping system of your law firm has all these essential elements, and you will be in good shape in no time. With the right elements in place, your law firm will eventually become a leader in your chosen field.