4 Essential Legal Invoicing Best Practices

By Adrian Aguilera

Your client is signed on, the legal work commenced a few weeks ago, and now it’s time to prepare legal invoices. The problem is, you’re constantly busy working on multiple cases. You might not remember all the billable work that was performed a couple of days ago—let alone in the last few weeks. 

Legal billing is frustrating as it requires time-consuming manual entry of all billable work, approval processes that can create bottlenecks, and unpaid invoice follow-ups. According to the MyCase 2021 Legal Industry Report (which surveyed over 2,000 legal professionals), 52% of respondents identified invoice creation as a top billing struggle. 

Fortunately, law firm billing procedures and legal invoicing software can turn the usual “run of the gauntlet” into an efficient, productive system. In this article, we unveil four key tips for building an invoicing operation that enhances your firm’s productivity, captures more billable hours, and accurately/clearly lists all billable work. 

1. Re-evaluate Your Rates

Pair MyCase invoicing software to best prepare your invoicing rates and legal invoices. Visit MyCase.com today to get started.

 

While there is no definitive way to evaluate your hourly rates against all competitors, re-examining your rates ensures that you’re charging a fair price that’s profitable. This is the base point of building an effective invoicing procedure. 

You don’t need complicated algorithms to figure out legal billing rates and retainers. All you need is the marketplace. 

Firstly, the geographic location of your firm can determine rates. If your firm is located in a major city, such as Los Angeles, New York, or Chicago, you can charge a higher hourly rate and/or retainer compared to (for example) a small town in the midwest. So, if your firm has recently relocated or expanded business across states, you may be over or undercharging your clients. 

Also, rates might depend on your firm size. Larger firms typically charge more, so you may need rate adjustment if your firm has grown from a small to midsize or midsize to a large business. 

Lastly, experience influences hourly rate. If an attorney was recently promoted or has practiced law for an extended period of time, this obviously warrants charging higher rates. For additional details on staff hourly rate arrangements, check out this guide

Once you’ve determined that all attorneys’ hourly rates/flat fees/retainer charges at your firm  are up to date, you can begin building more efficient invoices. Invoicing software can help by allowing your firm to preset every attorney’s hourly rates and retainer/flat fees. Once a new case is opened, it’s easy to assign specific attorneys and begin billing based on their presets. 

2. Ensure You’re Accurately Charging Clients

MyCase invoicing software can easily integrate all billable client work automatically into each invoice for every case. Visit MyCase.com to learn more.

 

Law firm billing accuracy is pivotal for ensuring your firm maximizes the profit of its services, while fairly invoicing clients. Recalling all billable work is a challenge due to the sheer amount of multi-tasking and volume of tasks. 

Start by setting clear expectations on your billing procedures with clients when they first sign on. This kicks off the lawyer/client relationship on a trustworthy note as each party understands how billing will occur. There are no surprises. 

Next, have a system that helps you track your time as you work. Law firm case management software provides each attorney with the power to track time accurately by setting up to three simultaneous timers during work. So, if you’re in a meeting for a case, but then receive a call from a client, you can simply stop one timer and start the next. The software also automatically attributes all billable time (at the attorney’s rate) into the invoice when it’s time to bill. This helps ensure timely bills. For more on time tracking, check out this overview on the average billable hours for attorneys.

Third, consider invoicing more frequently. Instead of one large bill at the end of a case, smaller legal bills sent throughout a client’s case can improve billing accuracy while encouraging more cash flow—since payments are more incremental. This also reduces the client’s shock of one all encompassing expensive bill. 

3. Have A Clear Billing Policy

MyCase invoicing software can aid in the implementation of your legal invoices and billing policy. Visit MyCase.com to learn more.

 

Arranging an attorney billing policy will help your team efficiently assemble invoices while eliminating bottlenecks during the invoicing review process. 

  1. Start by forming the lifecycle of the law firm invoice from beginning to end. Create a written process detailing who reviews each invoice, the order of reviews, and each attorney’s deadline (keep this unchangeable). 
  2. Include an immovable send date for each invoice. 
  3. Also incorporate your accounting team into the process by setting a time for notifying them on when legal invoices are sent, as well as the number of invoices that are overdue. 

This offers two solutions. First, it eliminates confusion about where the invoice is located during the review process. Second, if there are delays, it pinpoints who’s slowing down the approvals. Overall, this will help speed up invoice delivery. 

Next, create invoice templates to shorten the attorney billing process—freeing up more time for casework. Templates should include minimum and maximum description length, which expenses to add and write off, and when invoices should be sent. 

Finally, consider adopting invoicing software for your billing policy implementation. This software makes it easy to assign lawyers to specific cases/invoices and facilitate reviews/approvals. 

4. Automate Your Invoicing 

 

Invoice automation eliminates redundant non-billable invoice tasks, so your team can focus more on billable casework. 

Advantages of law firm invoice automation include:

  • Reduced human error from the elimination of typed or hand-written invoices
  • Auto population of attorney tracked time/digital notes into each invoice when it’s time to bill the client
  • Greater cash flow and timely bills from electronic sending options
  • Auto-generated reminders for overdue bills

Also consider implementing online payments and payment plans, as they’re becoming a part of law firm billing best practices. Clients will appreciate the convenience and your firm will receive payments quicker and more often.

Get Started Today With MyCase Legal Invoicing Software

Try MyCase legal invoicing software risk-free with a 10-day free trial. We offer affordable monthly and yearly subscriptions. Plus, there’s no commitment required, and you can cancel anytime. 

Learn More About MyCase

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