how to do billing for an attorney

• Bill for All Your Billable Work. Many young lawyers only bill for “big ticket” items, like performing research and writing memos. ...
• Enter Time Daily. Some firms require that lawyers enter their billable time daily or weekly, though bills usually go out monthly.
• Break Down Your Entries. As for the billing entries themselves, break down what you do into discrete entries so that the client can see the value of the time spent.
• Break Down Research and Writing. Similarly, break down research and writing into things like: “Perform research under South Carolina law as to elements of fraud claim,” “Perform multijurisdiction research on ...

Full Answer

How often will I be billed by my lawyer?

How Often Will I Be Billed By My Lawyer? Unless you have a contingency fee agreement, you will probably be billed monthly. If you are paying an hourly fee, you may want the lawyer to get your permission before spending more than a certain amount of time on your case. You have a right to get itemized bills that show how the lawyer has spent time ...

How do lawyers Bill their clients?

• Hourly Rate
• Contingency Fee
• Flat Fee
• Retainer

What is attorney billing?

The Client's Guide to Law Firm Overbilling

• Introduction to the Unkillable Billable. It seems that scarcely a week goes by without an article appearing in a newspaper, journal or blog that proclaims the death of the billable ...
• One Block Billing. ...
• Two the Hoarders. ...
• Three Hour and Half-Hour Incremental Billing. ...
• Summary. ...

How do lawyers bill clients?

• Your expertise in the subject;
• Competitive rates in your jurisdiction;
• The type of case and matter; and
• The type of client

How do you calculate billable hours for a lawyer?

Calculating billable hours is straightforward: you take how much you've worked and multiply it by your hourly rate.

How do you bill clients?

How to Bill a ClientCreate a (Verbal or Paper) Contract. Before you even begin working with a client, it's important to have a mutual agreement in place. ... Use a Template for Your Invoices. ... Simplify the Payment Process. ... Don't Hesitate to Send Out Invoices. ... Don't Be Too Shy to Follow Up. ... Being a Professional in Billing Clients.

How do you draft a legal invoice?

What is an invoice?Start with a professional layout. ... Include company and customer information. ... Add a unique invoice number, an issue date, and a due date. ... Write each line item with a description of services. ... Add up line items for total money owed. ... Include your payment terms and payment options. ... Add a personal note.

What are billing guidelines?

Legal billing guidelines are a binding agreement between a legal department and a law firm, ensuring payment in exchange for legal work. The guidelines establish rules for legal invoicing formats, staffing, deadlines, and other important aspects of the working relationship.

How do I collect money from my clients?

These 10 steps can help you collect money from late-paying clients:Send Polite Reminders. ... Pick up the Phone. ... Go Directly to the Payment Source. ... Cut off Future Work. ... Hire a Collection Agency. ... Take the Client to Small Claims Court. ... Sue the Client in Superior Court. ... Go to Arbitration.More items...•

What are the different types of billing methods?

What are Billing Methods?Standard Rate.Single Hourly Rate.Team Member Rates.Service Rates.Flat Rate.

How should a invoice look?

What Does a Professional Invoice Look Like?The business's name and contact details with a logo, if applicable.The client's name and contact details.An invoice number.A payment due date.A detailed list of services provided with descriptions, quantities, rates and subtotals.The total amount due on the invoice.More items...•

What must an invoice include?

What should be included in an invoice?1. ' Invoice' ... A unique invoice number. ... Your company name and address. ... The company name and address of the customer. ... A description of the goods/services. ... The date of supply. ... The date of the invoice. ... The amount of the individual goods or services to be paid.More items...•

What do you say when sending an invoice?

How Do I Write a Formal Invoice?Your business details (name, logo, contact information)Invoice number.Full name and contact details of the customer.Invoice date.Due date.Due amount.Itemized list of services/products along with the breakdown of rates and prices.More items...

How do you bill time in a law firm?

Unless someone told you otherwise, bill all the time you spend on a task, even if you know some of it will be marked down. At most firms, you will still get credit toward your billable hour goal for all the time you enter into the firm's billing software, even if not all of that time is billed to the client.

How many claims does a biller have?

Industry-wide, the median number of claims processed annually by a biller is 6,700; some can work more. Just be sure that the demand for speed does not lead to reduced accuracy. You certainly can also do a more intense analysis of your billers.

What are legal invoices?

Legal invoices contain privileged and confidential information which is not subject to disclosure to the membership. As the court in the Laguna Sur case noted: It is no secret that crowds cannot keep them [secrets].

What can you bill for in a law firm?

But at most firms, you can and should bill for tasks like reading and sending emails; taking and making phone calls; reviewing accident reports, medical records, and discovery documents; and speaking to clients, opposing counsel, and witnesses.

How often should I bill my lawyer?

Some firms require that lawyers enter their billable time daily or weekly, though bills usually go out monthly. Even if your firm doesn’t require you to enter time daily, this is the best approach to ensure you capture all the billable work you perform. Any lawyer will tell you that this is easier said than done, but I promise that you will lose time if you put it off, especially as a young lawyer. You’ll forget about emails you sent, phone calls you took, and other “small ticket” items that add up over a month. This hurts the firm and your progress toward your billable-hour goal.

What is double billing?

Double billing is simultaneously billing two clients for work performed during the same block of time. The temptation to do this occurs most often when lawyers travel. Say the lawyer spends two hours flying to attend Client 1’s deposition. While the lawyer is on the plane, she uses that time to work on projects for Client 2. Some clients don’t allow lawyers to bill for travel time, and under that circumstance, the lawyer could only bill the time spent working for Client 2 anyway. But when clients will pay for travel costs, the lawyer may be tempted to bill Client 1 for the time spent traveling and simultaneously bill Client 2 for work on their projects. Voilà—the lawyer has magically made four hours of billable time out of two hours. While none of the comments to Rule 1.5 or Rule 8.4 explicitly address double billing, legal ethics experts agree that double-billing violates these rules.

How many hours can a lawyer bill?

Don’t short yourself that billable time. But be realistic about how many hours you can bill in a day. Not everything lawyers do is billable; an 11-hour day at the office might only yield eight billable hours. And that is OK.

Why do you need to know what you can and can't bill for?

You need to know what you can and can’t bill for so you can avoid both spending excessive time on work that clients won’t pay for and entering time for unbillable tasks.

Do summer associates get good at billing?

Most seasoned lawyers recognize that summer associates and young lawyers generally are not good at billing. Most new lawyers don’t get comfortable with billing until they are third- or fourth-year associates.

Can a lawyer bill for travel time?

While the lawyer is on the plane, she uses that time to work on projects for Client 2. Some clients don’t allow lawyers to bill for travel time, and under that circumstance, the lawyer could only bill the time spent working for Client 2 anyway.

How to improve legal billing process?

Another way to improve your law firm’s legal billing process is to use software that allows you to set up automated invoice reminders. With this built-in tool, you can schedule reminders when you send out the very first invoice to a client. If the invoice isn’t paid, a follow up invoice will automatically be sent to the client, reminding the client that the billed amount is still outstanding.

How to increase billable time for lawyers?

For starters, make sure that lawyers in your firm are able to track their billable time using multiple timers and enter billable time no matter where they happen to be, whether in your firm’s desktop case management software or on a mobile device. Another way to increase billing efficiency is to simplify the steps needed to convert billable activities into billable time on an invoice. Oftentimes, the billing software that your law firm uses can accomplish this goal in any number of ways. For example, with the click of a button you can convert events or tasks into billable time. Another timesaver is the ability to take advantage of default billing activity descriptions when entering billable time. The easier it is for your attorneys to create a time entry, the more likely they are to do it.

Why is it important to have streamlined processes in your law firm?

That’s why it’s so important to have streamlined processes in your law firm that: 1) reduce the repetitive tasks associated with tracking and entering billable time, 2) simplify the invoice creation process, 3) make it easy to send invoices to clients, and 4) standardize the steps required to accept, receive, and account for payments.

How to reduce legal billing inefficiencies?

There are a host of ways to reduces legal billing inefficiencies, but one of the easiest is to reduce the number of steps needed to create and send out invoices. One way that legal billing software accomplishes this goal is by automatically providing necessary billing information , such as LEDES billing codes . Additionally, the built-in ability to customize invoices allows you to easily determine what information appears on your firm’s invoices, such as which time or expense entry columns you would like to appear on an invoice. For example, with the click of a mouse, you’re easily able to remove all time entries during the invoice creation and generate an expense-only invoice.

How to set up a payment plan for a client?

The simplest way to do this is to use your firm’s legal billing software to set up a payment plan using the built-in payment plan features. You can create the payment plan, establish the amounts due and due dates, and share that information with your client, who can then instantly pay via e-check (ACH0 or credit card using your firm’s legal billing software with built-in online payment tools You can then set up invoice reminders for the amounts due, as discussed above. That way, your client has all the information needed to make regular payments under the payment plan, and will receive convenient reminders when the payments are due.

What happens if a law firm doesn't pay an invoice?

If the invoice isn’t paid, a follow up invoice will automatically be sent to the client, reminding the client that the billed amount is still outstanding. This convenient tool will save your law firm time and money. The initial invoice needs to be sent just once; after that, the software follows up with your client.

How many days are overdue on an aging invoice?

Aging Invoice Report: A report will of overdue balances grouped into 1-15, 16-30, 31-60, and 61+ days overdue.

Retainers

A retainer is an upfront fee you pay when you hire an attorney, according to the American Bar Association (ABA). This is relatively common, however, the amount varies greatly depending on the firm and your case. Some attorneys ask for a few thousand dollars upfront based on the likelihood of your case being lengthy and complex.

Hourly rates

Many attorneys bill based on an hourly rate, commonly broken down into tenths of an hour or quarters of an hour, which means you could be billed for every six or 15 minutes spent on your matter.

Contingency fees

Personal injury cases almost always rely on a contingency fee. This means your attorney’s fee is contingent on their winning your case, explains the ABA. You agree at the beginning of the matter to pay your attorney a certain percentage of whatever settlement or court award you receive.

Alternative billing methods

In recent years, some firms have become more flexible about the hourly rate and have started offering alternative billing methods, according to Lexicata.

Planning your Budget

You and your attorney should decide on the details of the payment structure and billing method before he or she begins work on your case. Having clear guidelines on what you can and cannot afford—and what they can and cannot do with the resources available—will save you both trouble down the line.

Victoria Langley, Contributor

Victoria E. Langley is a legal content writer living in the Pacific Northwest. She holds a B.A. in philosophy from Northern Illinois University and a J.D. from the John Marshall Law School of Chicago. She strives to combine her passion for the law and writing.

Why use a legal billing template?

Using a legal billing template helps bridge this gap, which means more potential revenue coming in for hours already worked.

How does billing help you get paid?

Billing consistently ensures clients know when to expect your invoices and helps you get paid faster .

Why use a template in billing?

Even if you have established a billing process from memory, using a template can reduce redundancies and human error. Here are a few other benefits:

How to make bills understandable?

Ensure your bills are understandable by writing in plain language. Also, you need to send invoices early or right after a case is closed. By making it easy for clients to pay you, you can help streamline your collections processes.

How to improve cash flow in a law firm?

One of the most important ways to improve your law firm’s cash flow is diligent record keeping. Knowing where your time is going and ensuring that it’s appropriately billed to the correct client is the foundation for a healthy collections process.

What is a clear and detailed law firm invoice?

Be clear and detailed: Adding clarity and details to your legal bill will ensure your client understands the value you provide. With a clear and detailed law firm invoice, your client will understand exactly what they’re paying for.

When refining your collections processes, always make sure to do your best to provide clients with a client-centered?

When refining your collections processes, always make sure to do your best to provide clients with a client-centered experience. For example, consider accepting credit cards to make payment easier. People are paying for services differently now, and nearly every major retailer currently accepts credit cards. Giving your clients an easy and convenient payment experience that they expect will reduce friction on both ends.

How many minutes does a law firm bill?

Partners, associates, paralegals, litigation support staff, and other timekeepers bill their time in six, ten, or fifteen-minute increments, depending on firm policy and client directives. If you fail to bill your time, the firm cannot invoice the client, and the firm does not get paid. Thus, knowing how to bill time in a law firm is important for your and your firm's success.

Why do courts not allow block billing?

Moreover, many courts do not permit block billing because it hinders effective reimbursement of attorney fees following a judgment. A more effective way of billing is to itemize each independent activity and its corresponding time.

What is task based billing?

Corporate clients are making increased use of task-based billing. Task-based billing tracks a firm’s billing by litigation task. Each substantive activity is assigned a computer code that is pre-selected by the client. The coded invoice is then electronically sorted and analyzed, allowing an in-depth analysis of an invoice. Part of familiarizing yourself with client billing policies is learning and properly applying the myriad of specialized task-based billing codes unique to each client.

What happens if you fail to bill your time?

If you fail to bill your time, the firm cannot invoice the client, and the firm does not get paid. Thus, knowing how to bill time in a law firm is important for your and your firm's success. As legal fees increase, clients have become more cost-conscious and tech-savvy. Consequently, clients are examining legal bills more closely ...

What is block billing?

Block billing is the practice of listing a group of tasks in a block summary under a single time entry. For example: “Draft interrogatory requests; telephone conference with Dr. Brown re: expert report; summarize deposition of Mr. Smith; review and revise correspondence to opposing counsel. 7.3 hours.”

Who processes invoices?

In many cases, an invoice is processed by a number of individuals at various levels inside and outside the company, including legal professionals, accountants with the client corporation, and third-party auditors. In recording your time, it is best to avoid abbreviations, slang, and complex jargon.

Do you have to keep your audience in mind when recording time entries?

Like any document you prepare for another’s review, it is important to keep your audience in mind when recording time entries. You may know the individual reviewing your bills, such as the in-house counsel assigned to the file. Understand, however, that the review may not end there.

What percentage of lawyers are block billed?

Approximately 90 percent of law firm clients who are billed on an hourly basis are “block billed.” Block billing is an accounting technique whereby lawyers aggregate multiple smaller tasks into a single "block" entry, for which a single time value is assigned. In theory, the total time charged equals the sum of the duration of each discrete task. For example, after spending five minutes on a phone call, 35 minutes revising a junior associate’s draft motion and three minutes dashing off a brief e-mail to the client, the attorney should bill the client for seven-tenths of an hour. Unfortunately, in far too many cases, the final block-billed entry for these tasks will end up looking something like this:

Why block billing?

Another court observed that block billing allows lawyers to "claim compensation for rather minor tasks which, if reported individually, would not be compensable" and precludes the client "from determining whether individual tasks were expeditiously performed within a reasonable period of time because it is impossible to separate into components the services which have been lumped together." In re Leonard Jed Company, 103 B.R. 706 (Bankr. D. Md. 1989).

How to minimize billable hour inflation?

In order to minimize billable hour inflation, every client should implement outside counsel guidelines that prohibit block billing, billable "hoarding" and excessive incremental billing. However, these are just a few of the practices that lead to overbilling and should cause clients to carefully scrutinize their monthly statements. Please visit our website (www.litigationlimited.com) to learn more about these and other types of law firm overbilling, and the strategies clients can use to help outside counsel improve billing practices and rein in billable hour inflation.

What is overbilling law?

Law firm overbilling - whether described as the euphemistic "bill padding" or simply "billing fraud" - is a serious problem that is seldom discussed and even less frequently addressed. But rare is the legal bill that does not include at least some "padding." In fact, according to the California State Bar, most bills are inflated at least 10-30 percent. This article describes three common ways legal bills are inflated and provides tips to help clients identify problematic billing practices.

When billing by the hour, should they not use increments greater than one-tenth of an hour?

When lawyers bill by the hour, they should never use increments greater than one-tenth of an hour. Glover v. Heart of America Mgmt. Co., 1999 WL 540895 at *7, fn 8 (D. Kan 1999) (quarter hour billing... has been virtually extinct for some time"). Yet it appears that anywhere from five to ten percent of lawyers bill clients in unacceptably large chunks of time - usually in one hour or half-hour increments. This is neither honest nor reasonable, and constitutes outright billing fraud, as courts have held that “professional persons who charge their clients fees in excess of $80.00 per hour, based upon time spent, cannot, in all honesty and reasonableness, charge their clients for increments in excess of one tenth of an hour.” In re Tom Carter Enterprises, Inc., 55 B.R. 548, 549 (Bankr. C.D. Cal. 1985). By way of illustration, consider these billing entries from a $750 per hour partner:

How long does a lawyer have to submit a daily submission?

Now consider that, at least according to the California State Bar and nearly every state and federal court in the country, most lawyers' daily time submissions contain anywhere from thirty minutes to three hours of time billed to clients that was not actually worked.

Do lawyers double bill?

However, two-thirds of lawyers admit that "bill padding" occurs at their firms, one-third of lawyers openly double-bill clients, and more than half of all lawyers perform work not because the client or case demands it, but because the lawyer needs to bill more hours. See William G. Ross, Professor of Law, Samford University, Attorney Billing Ethics Survey (2006-2007). Clearly, clients must be proactive when it comes keeping billable hour inflation under control. This article summarizes some of the most common billing practices that lead to billable hour inflation.

How to dispute a bill from an attorney?

If you’ve received a bill from your attorney that you feel is unjust, then you can dispute the bill without having to take your lawyer to court. Before disputing your bill, review your initial fee agreement, which should include details on how often you’ll be billed and what the rates will be. Then, review your bill in light of the fee agreement, your own records, and your understanding of what your attorney has done. Try to pinpoint areas where you feel you were overcharged or discrepancies in times or services. Instead of formally disputing your bill right away, call your lawyer and ask them to review and explain the bill. If you still disagree with your bill, write your lawyer a formal letter explaining which fees you're disputing and why. If this doesn't work, check with your state or local bar association to see if they offer free arbitration services. To learn how to prepare for an arbitration hearing, keep reading!

How to dispute a bill?

If there is more than one item you want to dispute, you may want to format them in a bullet-point list. Identify the charge you dispute specifically and provide a brief description of why you dispute it.

What to do if you are allowed to have an attorney represent you during an arbitration?

Look for an attorney who is experienced in handling attorney's fees disputes. Make copies of any documents related to the fee dispute to take with you to the hearing.

What is the difference between arbitration and mediation?

With mediation, a neutral third-party works with you and your attorney to come to a compromise on the dispute, but he or she doesn't make any decision on the matter. If you choose arbitration, on the other hand, you will go before an arbitrator – typically another attorney or a retired judge – who will listen to both sides and make a decision.

What should be included in a fee agreement?

Your fee agreement should include details on how often you'll be billed, how costs will be computed, and the rates at which the attorney will bill for work completed.

How does wikihow mark an article as reader approved?

wikiHow marks an article as reader-approved once it receives enough positive feedback. In this case, 95% of readers who voted found the article helpful, earning it our reader-approved status.

What should be included in a letter to dispute a bill?

On the subject line of your letter, include the date of the bill you're disputing and the case name, if any, that relates to the services for which you were billed.