In any law firm, there is a divide between the work performed for clients and the billing process for getting paid. This is a matter of split expertise. Lawyers specialize in helping clients with specific types of cases. They work well with people, research, and court rooms. Lawyers may be skilled at drafting documents, leading negotiations, and crafting legal strategies to help clients achieve their goals. None of these skills include the talents necessary for accurate and consistent billing.
This is why many law firms experience a plethora of billing issues, from irregular invoicing to late client payments and everything in between. Addressing these issues carefully and with the right tools can help to streamline your law firm’s billing practices and improve your revenue flow. The best place to start is with the top three most common law firm billing issues and how to overcome them.
The Top 3 Billing Problems for Law Firms
Law firms face several regular billing problems. There is a laundry list of issues that individual law firms may struggle with. However, the top three often represent the overall concern for the firm’s cash flow. These top three billing problems are:
- Lost Time – missing billable hours due to inaccurate record keeping
- Late Payments – clients pay late or inconsistently, damaging your cash flow
- Complex Invoicing – when sending an invoice isn’t a simple process
Lost Time
How do your lawyers keep track of their daily billable hours? Many are keeping notes by hand in a planner, on nearby scraps of paper, or in the corners and margins of legal pads. Others are keeping a simple spreadsheet but fill out the details at the end of the day. Each manual time tracking method has a high likelihood of lost time due to missing notes and unrecorded hours. This isn’t just an oversight or inconvenience; it also means your legal team is doing work for which they won’t get paid.
Lost time is a major concern for legal practice billing because you can’t bill for time that isn’t recorded. In many practices, the greatest amount of time lost is from smaller work sessions, a few minutes at a time spent on client cases that add up to hours every week. Waiting until the end of the day often assures that these smaller time records are lost and forgotten, and filling in details any later can omit entire hours of work. If your team isn’t accurately tracking their time, it isn’t getting invoiced.
The Solution: Streamline Legal Time Tracking
The good news is that time tracking has become much easier with modern software solutions. Automated time tracking built into your legal practice workflow can even help your legal staff accurately record small work sessions so that every minute is recorded. The best time tracking software integrates smoothly into a busy legal schedule, including a mobile app to record billable hours on the go.
The easier it is for your team to accurately record their time on cases and tasks, the more complete your invoices will be.
Delayed Payments
Your law firm relies on on-time payments from clients to secure a stable cash flow. Unfortunately, clients do not always pay in full, on time, or sometimes at all. Unpaid invoices are a primary source of financial stress for any legal practice, especially when you want to maintain a cordial relationship with clients and avoid sending bills to collections.
Overtly, there are only so many ways to remind clients to pay their bills. However, there are strategies that can increase the rate of on-time payment from legal clients.
The Solution: Automation and Accessibility
The best ways to prevent delayed payment issues are through invoice automation and payment accessibility. These two strategies combined can make payment a more routine response for clients and remove obstacles from pay completion.
Invoice automation collects your lawyer’s time tracking data at the same time every week/month and issues invoices in a routine fashion. Every invoice looks the same and arrives at the same time in the client’s weekly/monthly routine. This makes legal invoices feel more like normal bills and, psychologically, will fit into the client’s “bill payment” routine instead of floating as an unanswered letter or email that is all-too-easily forgotten.
Payment accessibility introduces methods of payment that are easy and familiar to your clients. Providing an online payment portal make it possible for clients to pay their legal bills using the same methods or routine as they pay other bills. It also removes hurdles that might stop clients from completing payment when the payment method is familiar and simple to complete.
Complex Invoicing
Not every legal client is easy to invoice. Some cases and clients are more complicated than others. You may have multiple lawyers and legal support staff on a single case. You may be working for a corporation and need to invoice through their internal Accounts Payable department to receive timely payment. The more complex the invoice requirements, the more likely a law firm will run into any number of problems building the invoice, submitting the invoice, or getting paid on time.
The Solution: Advanced Billing Software
The good news is that many complex legal billing issues can be streamlined with purpose-built billing software. Many law firms work with corporations or on large cases, and these patterns can be anticipated with more complex billing features and automation.
Solving Your Law Firm Billing Concerns
In all three cases, the best answer is legal software solutions crafted to address the time tracking and billing needs of your law firm. LawBillity offers automated time tracking, invoice templating, invoice automation, and advanced billing management to minimize the biggest problems most law firms face in billing and client payments. Let us improve your billing efficiency and cash flow performance through our legal-focused time and billing solution. Subscribe to Lawbillity’s 14-day free trial to explore the features and possibilities for your law firm time and billing solution.
