how to do billing for lawyer

• 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 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 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 is billing format?

Billing Format means the format identified by the State in the applicable addendum. Each service must be included in a separate line item and include individual taxes.

How do I bill someone?

How To Send An Invoice Step-By-StepDenote at the top that it is an invoice.Add an invoice number.Add the date you are sending the invoice.Add your name, address and contact details.Add your client's name, address and contact details.Include a brief description of services rendered.More items...•

How many hours should I be billing?

As a general rule, if you bill between 36 and 40 hours in a week, you're likely going to be okay. Over the long run, the expectation is that you should be averaging 40 billable hours a week - assuming you have productive work to do.

How many hours a week is 2000 billable hours?

40 hoursFor example, if you want to reach a goal of 2,000 hours annually, you would need to bill for roughly 40 hours each week, or eight billable hours a day. You may not work exactly eight hours each day, but this breaks down what you should average in a day, week, and month to reach your annual goal.

How can I improve my billing process?

Here are 9 ways to improve your billing processStart with an easy-to-understand invoice. ... Test your invoice design to identify problems. ... Use specific payment due dates. ... Write clear calls to action (CTAs) ... Follow-up with reminders and late notices. ... Design a process that fits your business.More items...•

How do lawyers bill their clients?

For the most part, lawyers charge for their time based on an hourly rate. So, they take the amount of time it takes for them to complete a task on your matter and then multiply it by the hourly rate.

What is a lawyer invoice?

A lawyer/attorney legal invoice is a document that would be used to bill a client for legal services rendered.

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.

Is Rocket Lawyer a lawyer?

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Can a lawyer charge contingent fees?

For example, a lawyer cannot charge you contingent fees if you're being charged in a criminal case, as you will not be awarded damages. Whichever fee agreement you select, make sure you understand it up front and get the parameters in writing.

Do attorneys charge by the hour?

Some attorneys charge by the hour. Although the actual rate varies dramatically depending on location, experience, and case type, it's important to note that you will not only pay for the hours your lawyer spends in court, but the time he or she spends researching, writing motions, meeting with opposing counsel, reviewing discovery, etc.

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 .

What does standardizing your billing process mean?

Sending detailed and accurate invoices becomes easy: Standardizing your billing process means you won’t be scrambling to gather the information you need.

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.

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.

When did lawyers start billing hour?

It surprises most lawyers to learn that the “billable hour” is relatively new and wasn’t in widespread use until the 1950s. In the late 1800s , the “billable hour” was not only rare, it was almost universally deemed to be “unethical”. And where it was permissible, the billable hour had a maximum cap based upon the type of work. These “caps” were established by bar associations for the benefit of clients to ensure that a client would pay no more than a set amount for a particular service, much like ordering from a menu. Based upon these restrictions, the default standard for client billings became the “fixed fee,” which provided attorneys at least a theoretical upside if their work proved to be efficient and valuable.

How much of attorney fees are billable hours?

While firm data is hard to come by, it has been estimated that “billable hours” now represent in excess of 80% of all attorney's fees generated.

What types of legal services are good candidates to be charged as a flat fee?

What makes a flat fee successful and profitable for lawyers is when you can employ consistent and standardized workflows. Examples include contracts (with regular and consistent terms), leases, corporate documents (like operating agreements), deeds, estate planning documents and routine business agreements. However, with sufficient volume (scale in the technology world) any time of work can profitably be turned into a flat fee candidate.

What is base fee?

With a base fee, a minimum amount is due from the client regardless of the actual time invested by a lawyer for a particular matter or project. This practice became so successful that many bar associations began requiring attorneys to charge base fees pegged to pre-determined rate charts they established. In fact, state bar associations went so far as to fine attorneys who deviated from the pre-determined base fees. In an opinion that seems unimaginable in the modern context, the ABA found it to be unethical for attorneys to charge too little for their services. The stated goal of many bar associations was to increase the income of their members.

Why is the billable hour so slow?

The first is that the billable hour is incredibly profitable! Lawyers are very smart people, and they are unwilling participants in any “evolution” designed to take money out of their own pockets. While the amount of time spent on a matter is becoming an increasingly poor way to measure value, it has served lawyers well for generations.

What practice groups have flat fee services?

There are obvious practice groups that have successfully sold flat fee services for years: family law, corporate law, estate planning and criminal work. But its use is expanding. For example, in the context of litigation (a practice in which flat fees have historically proven difficult) forward thinking firms are turning to flat fee arrangements for research memos, document review and discovery - areas that have historically been the domain of hourly billing.

How to give a small firm flat fee?

The smart way for a small firm to give flat fee billing a try is to dip your toe in. Decide that over the next 12 months you are going to convert 10% of your firm revenue to flat fee billing. As time progresses you will get better and more efficient, and you will see the profit margin on your flat fee billings exceed those of the billable hour.

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.