How can our law firm avoid a billing dispute?
Billing disputes are stressful for everyone. They’re time-consuming, stressful, and can hurt your reputation. However, there are a number of ways you can avoid disputes over billing and collection. By implementing these best practices, you may be able to head off conflict before it begins.
Focus on transparency
Be clear and honest with your clients about costs, timelines, and possible results from the beginning. This gives your clients a better understanding of what goes into the estimate you provide them. It also starts your relationship from a place of trust rather than false expectations.
As part of this process, your client agreement should include all this information, including:
- Fee schedules for when payments are due
- Budget for anticipated costs and expenses
- Provisions for additional fees and what circumstances they’d be required under.
Know the rules and follow them
What are the rules in your state for communicating fee arrangements? What are the rules surrounding excessive fees? Your billing practice needs to make sure the rules of professional conduct are integrated into billing practices. (And, of course, compliant)
Provide detailed billing
When it comes to billing techniques, use detailed billing over block billing. While block billing might be faster on your end, it leaves more room for a client to question it. By giving them plenty of information, you’re making it easier for them to trust you.
In your billing, you should account for delegating tasks and administrative support as they impact fees. Don’t charge a client the partner rate for the work a paralegal did. Not only is it unethical, but it’s a recipe for billing disputes.
Finally, as part of your billing process, make sure that you’re tracking your expenses as well. It’s better to have a solid paper trail of how you’ve spent money than to be scrambling at the last minute.
Communicate, communicate, communicate
No one likes a billing surprise. Communication is the key to successful client relationships. Keep your invoices regular, offer to walk through expenses and fees with them, and always be upfront about unforeseen costs.