For lawyers who are expected to be always efficient, precise, and accurate, it is surprising how often their business administration remains in disarray. That is the story for many firms that still rely on manual administration such as billing and invoicing.
The era of timesheets and manual billing is not gone yet. Attorneys are still rushing through their day, dealing with client emergencies, flitting from meeting to meeting, all the while telling themselves that they will handle the billing and invoicing in the evening.
That is why 14% of law firm billing ends up not being collected, according to a 2017 Clio Legal Trends Report.
In 2019, the same report showed that on average, lawyers only claim 2.4 hours of billable time out of an 8-hour workday (31%), which results in terrible utilization rates.
In 2020, the report presented a more positive outlook. From the law firms surveyed, 85% are now using software to manage their practice, 73% allow clients to pay invoices electronically, and 96% plan to use practice management software beyond the pandemic.
What these trends tell us is that law firms are now embracing software to reduce administration workload and time. Since billing and invoicing operations take up most of that time, here is how legal invoicing software can help law firms achieve better utilization of their time.
Legal Invoicing Software Depends on Accurate Time Tracking
Invoicing software for law firms is dependent upon accurate, digital time tracking. When you use the billable hour to charge clients, you need to have a time tracking solution that allows you to allocate time slices for every matter you attend to during the day.
Manual time tracking would force you to revert to manual billing procedures. You would need to enter time blocks for every lawyer in the firm manually, get those hours approved, and then generate and send the invoices. In a large firm, this process could easily take weeks.
That is why all legal billing and invoicing software platforms, such as our own LawBillity, come with built-in time tracking functions. Accurate and automated legal time tracking is what enables convenient invoicing for you and the clients.
How Does Legal Billing and Invoicing Software Work?
Legal invoicing software takes the time tracking data and automatically collates it into time blocks for every lawyer by matter and by client. It then uses that information and your hourly rates for each client to calculate the charges due.
To generate the invoice, the software includes all other information including client expenses, taxes, and itemized accounts of how time was spent. The best software also integrates with accounting software such as QuickBooks so that law firms can sync other accounting operations such as payroll.
When the invoices are generated, the software allows review, editing, and approvals before they are sent. Some of the more advanced options such as LawBillity also include online payment links so that clients can make payments immediately.
There is a lot more work that goes into generating legal invoices, including compliance checks and reporting. This simplified explanation will help to make it clear just how powerful invoicing software can be in reducing the administrative workload for law firms.
How Does Legal Invoicing Software Increase Administrative Efficiency?
- Invoicing in a Few Clicks
With time tracking information and expense tracking, invoices are easy to generate. Instead of manual checks and balances, all it takes is running a few reports and sending them off to clients.
Law firms also have the option of automatic invoicing, where these reports are run every period (such as weekly) and sent for approval. For those attorneys who are often too busy to stop and charge for that period’s work.
A LexisNexis internal survey found out that lawyers lose out on 40% of billable time through sluggish billing procedures, and could actually raise revenues with timely, accurate, and complete billing. Digitized and automated billing with LawBillity can get you there.
- Automatic Compliance Checks with LEDES and UTBMS
Getting invoices approved is another major administrative procedure that eats time and resources. Due to inaccuracies, errors, and violations of billing guidelines, non-compliant invoices are more likely to be late or get rejected.
Legal invoicing software allows continuous compliance checking to be carried out and flagged when errors or violations occur. With LawBillity you can export invoices into LEDES and LSS formats and easily import into other legal applications to allow customers to receive the invoice electronically.
It also allows trust accounts management, application of late fees, and other invoicing procedures to cut down on time spent on invoicing.
- Automate Invoice Tracking to Chase Unpaid Bills
With the ongoing economic crunch, clients are more reluctant than ever to make payments on time. The same report also found that in 44% of these cases, it’s due to lack of funds while 31% had money but still made payments late. Other times, clients simply think law firms charge too much.
Whatever the reason, law firms often have to take expensive and time-consuming follow-up and collection measures. This makes administration more time-consuming and difficult. Invoice tracking software like LawBillity, with their free Invoice Tracker add-on, has invoice tracking features to help with invoice follow-up on overdue payments. Administrators can reduce time on having to send demand emails, letters, or calls.
- Online Payments Made Possible with Integrations
One of the key takeaways from several Clio trends reports is that making it easier for clients to make payments is one of the best ways to improve collection and realization rates. LawBillity is one of the more advanced legal invoicing software that integrates with electronic payment platforms such as LawPay.
Clients only need to follow a link on the invoice to make payments by credit card, bank transfer, or other preferred methods immediately on receiving and approving the invoice. And better yet LawBillity is waiving the $20/month LawPay subscription fee, only pay the transaction fee!
- More Efficient Expense Tracking and Reporting
When law firms have no consistent legal expense tracking tools, billing becomes a time-consuming nightmare. Receipts get lost, small expenses go unnoticed, and tracking expenses after the fact is highly unreliable.
One of the more convenient ways of tracking expenses is through software. LawBilliity allows expense tracking by taking a photo of receipts issued and attaching it to a matter or using pre-loaded UTBMS codes. This way, expenses are already recorded when the time comes to run invoices.
The same thing happens when law firms need to run reports. With billing, time tracking, expense, charges, and other information already available, running reports and mining for insights becomes much easier. Some other time-consuming administrative tasks such as new client acquisition become easier when there is a wealth of informative reports available.
Time to Leverage the Power of Invoicing Software to Save Administration Time
Utilization rates are one of the best indicators of successful law firms, yet it is the one metric that most lawyers struggle with. From billing to following up with invoicing, law firm administrators have an especially hard time cutting down on non-billable time.
LawBillity’s legal invoicing software is a purpose-built platform for law firms designed to help these firms digitize and automate time-consuming operations. Try LawBillity for free today and find out just how well the platform can save you administrative time.