Level Up Your Law Firm Billing Policy
While billing policy might not be the most exciting topic, it’s essential. After all, law firms need to be paid for their work at the end of the day!
If you haven’t already developed a billing policy at your law firm, now is the time to start. By documenting your law firm billing policy, you can save time, generate more revenue, and ensure all members of your team (and even clients!) understand the process.
Developing your law firm billing policy
While billing seems straightforward, unfortunately, there’s lots of risk for miscommunication which can lead to bottlenecks, unpaid bills, and wasted costs. For example, attorneys taking too long to approve bills or adding too many edits can cause a delay in bills getting sent out. Or, the accounting team may have to spend hours upon hours chasing clients for payment. Often, these inefficiencies occur due to confusion around processes or unclear expectations. With that in mind, follow the steps below to develop an effective billing policy:
1. Document your billing process from start to finish
Become an expert in the lifecycle of your bills. You should be able to quickly answer the following questions about your firm’s billing process:
- Which attorneys on a case need to review a bill?
- In which order?
- Are bills mailed or sent electronically?
- Who should be informed when sending a bill out?
Write out your entire process from start to finish, so there’s no confusion—even if you’re a solo attorney. This understanding helps support your bottom line and helps you better understand your clients—giving you momentum to invest in the client-centered experience.
2. Develop billing guidelines and templates
Start by creating clear guidelines and a template for your invoices. These documents should include information on the following:
- How long should billing descriptions be?
- What type of expenses should be included in bills (or written off)?
- Do any lawyers have specific preferences regarding their bills and templates?
- Does the firm have any standard information that needs to be included on each bill?
- When should invoices be sent to clients?
Remember that templates and guidelines will likely need tailoring depending on your specific practice types. For example, you will probably use different procedures or templates for flat-rate and hourly transactions.
3. Standardize your disputes and collections process
Developing a straightforward dispute and collection process is integral to staying on top of your business. It’s easy to put off unpleasant tasks, which is why many firms leave unpaid bills languishing for months. Remember that the longer you wait, the less likely you are to recover payment for unpaid bills.
Some of the issues you’ll want to consider when developing this process include the following:
- How long will you wait before following up on an unpaid bill?
- Who follows up on unpaid bills?
- What information needs to be included in reminder emails for unpaid bills?
- Who handles disputes relating to bills?
You’ll also want to consider your process for dealing with chargeback requests. If you are a Clio Manage customer, Clio’s Payment Operations department will help with chargebacks every step of the way.
4. Tell your clients about your billing policy
When developing a law firm billing policy, one often-overlooked aspect is client awareness. Making your clients aware of your billing policy is crucial for getting paid and avoiding disputes.
The following information, at a minimum, should be made available to all law firm clients:
- When and how often will clients receive bills?
- What payment options are available?
- How much time do clients have to pay their bills?
- What happens when clients don’t pay their bills on time?
If possible, provide this information to all new clients during or after their initial consultation. While months (or even years!) could pass before your clients need to worry about their bill, setting expectations from the get-go will help ensure that your clients know what to expect when they receive an invoice.
Conclusion
Having a clear and documented billing policy will help your law firm set expectations, increase efficiency, and maintain good relationships with your clients. However, educating staff and clients about billing expectations is equally important. Doing so will ensure that everyone involved in the billing process enjoys a straightforward and efficient billing experience.