Things You Didn’t Learn in Law School: Billing

Billing–it’s the bane of every lawyer’s existence. Whether it’s capturing billable hours, explaining and justifying fees to clients, or trying to collect fees from non-paying clients–it’s never “fun.” Then again, we all knew when we entered law school that practicing law wasn’t all fun and games.

But, like many of the things on our list of the Top 10 Things You Didn’t Learn in Law School, billing is one of the many experiences for which law school simply didn’t prepare you.

Perhaps that’s why one wayward lawyer thought he could get away with billing a single client 29 hours in one day. At least–that’s my explanation for his outrageous behavior. It’s either a law school failure or he’s simply unscrupulous. And while I’d like to believe it’s the former, it’s more than likely the latter.

So how do you avoid becoming “that guy”? For starters, take heed of the advice below to ensure that you: 1) bill effectively and efficiently, 2) avoid billing problems by keeping the lines of communication open with clients, and, 3) by ensuring that you comply with ethical guidelines when collecting overdue fees from clients.

Effective billing tips

First and foremost, the easiest way to avoid falling into the trap of succumbing to billing pressures and over billing your clients is to ensure that you capture all of your time. Here are a few tips to help you do just that.

  • Detail, detail, detail! Provide detailed descriptions of billable items. Clients will appreciate it and will have less questions about invoices.
  • Don’t bill in blocks. Break down your tasks and avoid billing large blocks of time all at once. So instead of billing 2.5 hours for “responding to discovery demands,” instead reduce the task to its elements and bill separately for “reviewing demands,” “reviewing file to locate responsive documents,” “phone call to client to ascertain location of missing documents,” and “prepare draft of response to discovery demands.”
  • Enter your time often. Bill as you go or enter your time as frequently as possible. That way you won’t forget billable time. Mobile billing tools, such as MyCase’s mobile app with built-in billing features are great for capturing billable time.
  • Use simple language. Your clients aren’t lawyers, so whenever possible, avoid legalese when describing billable activities.

You can learn more about 21st century billing techniques from our billing infographic, below. Click here to see the full infographic and feel free to share it on your blog or on social media as well!

Today's Legal Clients Prefer Online Billing

Today’s Legal Clients Prefer Online Billing

Communicating with clients about billing

Another way to avoid billing issues with clients is to communicate clearly and often with your clients in order to avoid confusion about bills and to ensure that you have happy clients. Here are a few pointers, some of them gleaned from an ABA GPSolo eReport article about billing, to help you accomplish that important goal.

  • Be clear from the outset. Discuss the fee agreement prior to beginning work on a case and put it in writing, if possible.
  • Establish a reasonable fee. Doing so will prevent problems down the road and result in happier clients.
  • Earn your retainer fee. Don’t expect your client to pay you if you haven’t done your job.
  • Put yourself in your clients’ shoes. Make sure that your fee arrangements make sense, are set forth in an understandable manner, and that your invoices–and your description of legal work performed–are easily understood by a lay person.
  • Avoid unexpected rate increases. Discuss rate increases, added expenses, or additional fees with your clients beforehand. No one likes to be surprised by invoices that are higher than expected.
  • Send bills on a regular schedule. Don’t let your invoices build up. Instead, bill your clients frequently on a regular schedule, whether it’s bi-weekly or monthly. That way your clients will understand the work that you’ve been doing on their case and won’t be unpleasantly surprised by a large bill comprised of many month’s worth of legal work.

Billing and collecting fees ethically

When clients fail to pay for services rendered, it can be incredibly frustrating to try to collect monies due while still acting within the boundaries of your ethical obligations. That’s because there are a number of ethical issues to consider when trying to collect delinquent fees.

Below are a just a few of those issues gleaned from a recent webinar with Ed Poll, “Collecting Your Fees Within the Lines of Ethics.” You can learn even more about effective and ethical billing practices by watching the video of the entire webinar, which can be found at the end of this post.

  • Charging interest on delinquent accounts. This is generally allowed, but you must inform the client of that possibility at the outset of representation and some jurisdictions require written client consent as well.
  • Withdrawing from representation if non-payment. It is wise to include this possibility in the retainer agreement. Withdrawal from representation is often permitted if doing so will not have a materially adverse effect the client’s case.
  • Liens on client property. Rules vary by jurisdiction, but generally speaking you cannot withhold the client’s file for nonpayment, but you may withhold a portion of the file, including work product, even if doing so may prejudice the client.
  • Reporting a client to a credit agency. Check your jurisdiction’s rules, but be aware that many don’t permit this. See, for example, NYSBA Opinion 684.

So now you have some additional tools in your arsenal to help you bill more efficiently and effectively. To learn more even about billing and collecting fees, don’t forget to watch this webinar – 5 Billing Best Practices From Top-Performing MyCase Customers.

–Nicole Black

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