How should my law firm handle our billing?

Misbah Jalal Siddiqui

How should my law firm handle our billing?

You are here:

Law Firm Billing

Legal billing is a distinct practice with nuances and complexities that distinguish it from billing in other industries. Legal billing can be complex for clients to understand because of rate structures, retainers, and invoicing practices[1].

When determining your billing practices, you should look at rates, time tracking, and payment methods to find your best options[2].

Hourly Rate

The most common billing practice of lawyers is the standard hourly rate. At the hourly rate, attorneys may bill in increments of 1/10th of an hour or 6 minutes. 1/6th of an hour or 10 minutes. 1/4th of an hour or 15 minutes.

Some attorneys, depending on circumstances, may provide a discount to their hourly rate. For example, regular clients or those who have multiple matters to be worked on may be offered a discounted rate in honor of the volume.

Blended Rate

Blended rates provide a discount via an alternate formula. Blended rates create an average of all rates for those who worked on the case.

Flat Fee

If an attorney is handling a certain type of project on a regular basis, they may consider a flat rate for the work. For example, an attorney who handles trademark searches and applications frequently may find this billing model effective.

Contingent Fee

Other billing rates include a contingent fee in which the attorney agrees to accept a percentage of any settlement, award, or judgment that is ultimately rendered; and if there is no settlement, award, or judgment, no attorneys’ fees will be paid. This fee arrangement is most often used, but not limited to, in personal injury matters.

Some clients use what is known as a reverse contingent fee in which the attorneys are paid based on a percentage of the amount they save a company in defending a lawsuit[3].

Time tracking

If you’re billing at an hourly rate, you’ll need a method of tracking time. (And even if you’re not, it’s a good practice so you understand your productivity levels better.) Some firms prefer to track time manually while others prefer to use software to track their work. While manual tracking may work for small or solo firms with detail-oriented attorneys, it can be challenging to keep up with accurate record keeping.

Time tracking software, on the other hand, lets firms automate time tracking, invoicing, and billing practices. It also streamlines managing client records and documents.

Sending Invoices

Utilizing a program to create and send invoices can significantly cut down on the amount of time you spend sending out invoices and following on them. Check for programs that offer batch printing or sending to make it easy to deal with multiple invoices at once. With the right tool, you can cut off hours from your monthly handling of billing.


It’s also important, no matter how you manage your bills, to offer clients multiple ways to pay. In addition to old standbys of cash and check, credit cards are standard. Note that while there is discussion about newer options like PayPal or bitcoin as a method of payment, there are ethical considerations that haven’t been fully worked out at this time.


1. The Five Best Billing Practices For Profitable Law Firms
2. Understanding Billing by Attorneys
3. Importance of Time-Tracking and Legal Billing Software for Lawyers

Sign up now to get more tips and news from CosmoLex

How can CosmoLex improve your law practice?

Book A Demo

Search Resources

Recent Articles

Table of Contents