According to the Thomas Reuters 2020 Report on the State of US Small Law Firms, attorneys in small legal firms only spend 60% of their time practicing law. The other 40% of their time they spend on administration, marketing, and developing their firms. Unfortunately, this means they are losing out on a massive chunk of potential revenues.
Unfortunately, small law firms do not have the resources to hire extras staff to manage their billing and marketing, and it is often up to the lawyers themselves to handle them. Despite being aware of these challenges, more than half of the report respondents have still not planned how to resolve the issue.
Making meaningful changes
Besides being time-consuming, billing inefficiencies can cost your law firm a lot of money. The time you spend on administrative work means a lot of lost income since you cannot bill your clients. Many small legal firms are handling this problem by adopting technology to tackle office admin tasks. These are some tips on how you can also optimize your billing process.
1. Make sure your clients are aware of your billing process and policies
Depending on the legal specialty, legal fees vary, and some fields of law like intellectual property and bankruptcy are costly. A bill is more than just an account that your client must pay. A straightforward billing process and policy is a valuable communication tool that allows you to communicate your services’ value.
By setting down your firm’s billing process and policies, you set clear expectations and ensure your clients don’t have any nasty surprises when they receive an invoice. Part of being a good lawyer means you must make sure your clients know how your invoicing works, how often they can expect to receive an invoice, and how they will pay you.
2. Ensure accurate billing by keeping track of your time
As a busy attorney, you can’t possibly remember how your time was spent at the end of a hectic workday. The best way for you to keep a billing record is to use a timekeeper and keep notes. This allows you to make sure all billable hours are recorded and that every entry is accurate and correct. It is also the best way to ensure your clients are aware of the value your services provide.
3. Adding clarity to bills
Clients need invoices that are detailed yet easy to understand. For example, billing for a 15-minute phone call must state the context of the call to avoid confusing the client about the charge. In addition, this type of detail in bills helps create trust, which makes clients more willing to pay.
4. Don’t delay billing
Sometimes, a huge workload and an unorganized billing system may result in your small legal firms sending out a bigger bill to clients less frequently. This is the wrong approach because the more consistently the invoices are sent out, the smaller the charges. This ensures your clients are not shocked by a considerable amount, and you provide your legal office has a regular flow of incoming revenue.
5. Taking advantage of automation
Automating routine office tasks is made easy by plenty of legal software providers. For example, if your small legal firm has a good billing process, it is straightforward to implement it into a software program. This will immediately free up more of your time to see clients, answer their questions and get on with your legal work. In addition, legal office administration software can generate bills, send bill reminders, makes payments faster by accepting credit cards, and so much more.
An optimized billing process is the best investment for small law firms wanting to mitigate the risk of error.