Don’t make the mistake of assuming being hired on a general retainer means you don’t need to track your expenses. Clients want to know they are getting value for their money. You should use billing software for lawyers to produce expense reports to assure clients your retainers are not too high — and to assure yourself that your retainers are not too low.
We all know what a general retainer is: the client pays a flat sum of money to engage the attorney for a period of time, typically for a month. The retainer payment covers all work the attorney does, though some contracts may have provisions to address time periods with high or low expenses. Attorneys love clients who offer generous monthly retainers because this is predictable cash flow.
Clients love the predictability as well but also want to see itemized billing. Without it, clients may start to question if the attorney is really providing the level of service being paid for by the retainer. This is where legal time and billing software like CosmoLex comes in handy.
Even if you are working on a general retainer, you should be tracking hours and expenses associated with that client and matter. If the client ever questions how much work the firm is putting in, the attorney simply produces a report and demonstrates to the client that the practice has been providing fair service for payment.
These reports are good for the practice as well. You may realize that you are providing far more service than the general retainer covers. You either need to increase your retainer or cut your fees — or possibly just eat the extra cost to keep a valuable client, though that is a dangerous precedent to set. Accepting a 5% overage today becomes a 10% overage next month and a 25% overage a year from now.
This kind of tracking is easy with CosmoLex legal practice management software. Enter time and expenses on any matter — cloud-based software means you can enter these fees from anywhere you have internet access. Mark the costs as unbillable and they will not show up on invoices. You can produce itemized billing when necessary but still charge only the monthly retainer to the client.
Tracking true expenses while using a general retainer business model is easy. Sign up for CosmoLex today and get control of your practice’s finances.