As a lawyer, your main duties are to represent your clients and practice law. Most likely, being a good attorney means that you dedicate a substantial amount of your time practicing law for your clients. When you decide to hang your shingle and manage your own firm, your responsibilities grow beyond just the practice of law. If you intend on being a successful attorney and business owner, it’s important to also dedicate your attention to the health of your business and your firm’s business practices.
One area of responsibility that is particularly important for attorneys managing their own practice is billing and timekeeping. If your firm does not accurately track time, you’ll have a very difficult time effectively billing your clients. If you can’t effectively bill your clients, you won’t get paid. And of course, if you don’t get paid, your firm isn’t going to be around for very long.
Here are 5 key legal billing and timekeeping practices that will help you build a stronger and more successful law firm:
1. Stop separating billing from the rest of your practice
It’s no secret that the legal profession operates under the “eat what you kill” mentality. You get paid for the tasks you carry out. For that reason, it is important that your time tracking and billing capabilities are integrated across all aspects of your business. Your firm should be able to mark every task, email, and event as “billable” or add a time card directly to these items in order to keep accurate records. When it comes to billing, look for a system that allows you to post matter costs, expense cards, and draw payments from retainers all while ensuring that your operating and trust account balances are properly updated and compliant. Communication is key in this aspect of your practice and separating timekeeping and billing from accounting through the use of multiple systems can be a crucial mistake.
2. Use a system that fits the way you live and practice law
Now more than ever, attorneys are working while in planes, trains, and automobiles. Work happens anywhere, at any time. Your legal billing and timekeeping systems need to support this. Recording your time and expenses on a cocktail napkin isn’t effective and it’s a surefire way to increase leakage (missed billing) in your firm. Find a billing and timekeeping system that allows you to track all of your activity and expenses on any device to ensure that you capture every billable activity as it happens.
3. Build your brand while catering to your clients
Chances are your bills aren’t the only ones your client receives. When bills aren’t easily identifiable, or hard to understand, they get cast aside and often go unpaid. Utilize a billing system that allows your firm to customize invoices to have a clear reflection of your brand and business. Pair your firm’s logo and contact information with customized messages for each client so that they know who they are paying and what they are paying for. While this sounds like it could be time-consuming, with today’s technology it can be a simple task to send personalized invoices to all of your clients in a single click.
If you’re looking to take the next step to strengthen your law firm’s brand, consider utilizing a client portal. Client portals which can be branded and easily placed on your website can make communications and transactions with clients exponentially less complicated. A single, secure portal for your clients to view invoices, share documents, and submit payment not only increases your brand and professional image, it increases your cash flow.
4. Accept credit cards
This reinforces catering to your clients. The easier your firm makes it for clients to pay when billing them, the more likely it is that your firm will be paid, and paid on time. Industry statistics have shown that firms who accept payment via credit card from their clients show a 30-40% improvement in cash flow. With that being said, accepting credit cards can open up a can of worms and compliance issues for your firm if it isn’t done appropriately. Make sure your firm puts a billing system in place that:
- Ensures all fees are not deducted from your trust account
- Can process large deposits
- Utilizes a credit card merchant that makes full deposits into trust accounts.
5. Focus On Practicing Law Not Billing Clients
Easier said than done, right? Billing your clients provides your firm with the fuel it needs to survive — CASHFLOW! The problem is that you aren’t going to generate that cash flow if you spend all your time managing your firm’s billing system. At smaller firms, this can present a challenge because often, they simply do not have the personnel on staff. Find a system that allows your firm to easily process payments, send invoices, accept credit cards, and even send past due reminders through a simple click. Only once an adequate system is in place, can you get back to practicing law
No one ever said being an attorney is easy, but you certainly don’t need to make it harder on yourself. Make sure your firm’s billing and timekeeping system includes these key elements and you’ll be in great shape! If you’re looking for a unique, practice management system that also includes legal timekeeping, billing, and accounting, try CosmoLex today.
