A smooth billing cycle is the lifeblood of a law firm. With a steady cash flow, a law office can maintain its bottom line and lawyers don’t have to spend time and energy chasing down the next infusion.
But is an improved billing process really possible? The short answer is yes. Below, we dive into steps lawyers can take to improve their firms’ billing processes—and earn themselves and their staff a little breathing room.
Save staff time with automation
Automations are an underutilized resource for law firms. Although attorneys might view automations as complex, labor-intensive tools to set up, they can be as easy as a few clicks once you’ve determined what your goal for using them is.
Routine tasks are prime candidates for automation. They regularly take up your team’s time and they tend to be a little boring. In fact, that repetitive nature is the very thing that makes them easy for technology to handle. The following are a few of the most common law firm automations.
Bulk invoice generation
In billing, generating and sending out invoices are both excellent choices for automation.
Any good practice management program should allow you to gather and organize the information you need to create an invoice in just a few minutes. Doing in seconds what used to take hours is what automation is all about.
What’s more, a practice management software like CosmoLex will allow you to customize templates for your invoices, making them specific to your clients’ needs and your law firm branding.
Regular reminders to clients—whether to re-up the balance of their trust account or to remind them that an invoice payment is due—help your clients stay on top of outstanding payments. A lot of lawyers put these off because they take emotional energy to compose, but that strategy can quickly make the situation worse.
Instead, consider using automated reminders. With a single-platform billing and accounting system, it’s easy to know when a retainer balance is getting low or a client bill is past due. Set a threshold balance amount or past-due date, and the system will send a reminder to the client as soon as it’s needed. No more hemming and hawing on your end.
Offer electronic payment options
With changing technology comes changing client expectations. One of the biggest shifts in recent years has been the client expectation to pay for services via credit card.
It’s no secret that law firms have historically avoided accepting credit card payments. The reasons for this stance include compliance concerns, processing fees, and professional perception of credit cards as less appropriate for law firms. But there are good reasons to accept credit card payments—and many of them tie into improving your billing process.
Clients value convenience
Face it: your clients are used to paying for almost everything in their lives online and with a credit card. They’re often surprised that not all law firms can handle the kind of transaction they’re used to employing when doing something as basic as buying groceries or floss.
Paying for goods and services electronically is convenient and doesn’t take much effort. Offering electronic payment options allows you to meet your clients where they’re at. Your practice management program can send out electronic invoices, allow clients to pay by credit card, and even store their card information for next time if they so choose.
Because credit card payments are more convenient, you’re more likely to receive payments in a timely manner, which reduces the amount of time and resources your billing department needs for collections.
Legal-specific software for credit cards
Trust accounts are important to law firm operations, but they require careful handling. The money in a client trust account belongs to the client, but credit cards make that tricky. Specifically, it’s not the client’s responsibility to pay credit card charge fees—that obligation lands on the lawyer.
But the way generic credit card companies operate involves depositing the payment into the same account they withdraw the charge fee from. When this charge withdrawal occurs on a client trust account, it’s an ethical violation.
And the obvious solution of depositing the client’s payment into a law firm’s operating account before re-routing it to the client trust account is also an ethical violation. The client’s money has to go straight into the client’s trust account.
The solution is to use legal-specific software for your electronic payment system. A legal-specific program can deposit a client payment into one account and withdraw a charge fee from another.
Use a single platform for legal billing and accounting
Using a single, fully-integrated practice management software for your legal billing and accounting needs streamlines your billing process on numerous fronts. Here are several of the biggest advantages.
Avoiding double data entry
First, if your legal billing and accounting are part of the same system, then you only need to enter financial data once. This takes less time and reduces the number of chances you have to accidentally enter the wrong number—and then spend even more time fixing the mistake.
The other major advantage of a legal billing software is that it can significantly simplify certain financial tasks.
For example, three-way reconciliation has long been viewed as a frustrating and time-consuming hassle, but it doesn’t need to be. With a little input from you, your practice management system can now run three-way reconciliation for you.
Since regular reconciliation and three-way reconciliation is an ethical requirement, increasing the process’s accuracy and reducing how long it takes are real benefits.
Leverage good tech for streamlined billing
Ultimately, the path to better billing lies through leveraging modern legal tech.
The right practice management program can save lawyers and their staff time by automating routine tasks, improving accuracy, and streamlining required financial duties. It can also make consistent and timely invoices more achievable and help alleviate any collections and cash flow issues.
And by supporting electronic payment options and allowing law firms to ethically accept credit cards, modern tech can help boost client satisfaction, too.