When it comes to your law firm’s finances, your practice is defined more by the billing model you choose than by your legal specialization. Your bookkeeper doesn’t care if you sue drunk drivers or practice corporate law, but rather whether you bill hourly or on contingency.
Your legal billing and accounting software has to meet the billing needs of your practice, not the needs of some generic law firm. CosmoLex handles the three common types of legal billing models — hourly, flat and contingency — plus it can handle a hybrid billing system that includes elements of all three!
CosmoLex law practice management software gives you the billing capabilities your firm needs, combined with the flexibility and productivity of cloud-based software. Enter hours and expenses from anywhere so you can be sure to generate complete invoices — you can’t collect what you don’t bill!
Hourly Fee – The classic “billable hour” is still used by many legal specialties including family practice, civil and commercial litigation, commercial bankruptcy and estate planning. Attorneys and other staff need to be able to enter their hours quickly into time and billing software, bill multiple rates based on the work done, track expenses. Hourly arrangements often use retainers to pre-fund the matter, so your software has to be able to manage retainer balances.
Flat Fee – Consumer, rather than commercial, bankruptcy firms typically run on a flat fee basis as do practices that handle real estate. Other specialties may also use flat rates for simpler cases. For example, a family law practice might charge hourly rates for most divorces but a flat fee for collaborative divorce that involves filing a few simple forms. Flat fee arrangements are very simple but the attorney time and billing software should allow you to track hours and expenses so you can confirm you are charging a profitable fee.
Contingency Fee – Personal injury and debt collection are the classic contingency practices. As with flat fees, attorneys should be able to track hours and expenses to measure how profitable the case is. The settlement will be routed through a trust fund, so contingency-based firms need a built-in trust accounting system.
Large law firms that handle multiple specialties need a product that can handle all three of these systems. However small and even solo firms may use hybrid billing systems that combine billing models, such as a flat fee case that incurs hourly rates for unusual amounts of work.