Contract types for professional services include fixed fee, hourly, recurring, non-billable, hourly not to exceed, and more.
Modern Billing Practices to Increase Revenue
Contemplating a more efficient way to capture billable hours while managing and streamlining the entire billing cycle to get paid faster?
In every law firm, there is a managing partner and administrator who continuously watches the clock and stresses about law firm finances and business operations. They are losing sleep, contemplating a more efficient way to capture billable hours while managing and streamlining the entire billing cycle to get paid faster.
Managing partners and administrators want built-in business intelligence with real-time, intuitive dashboards to provide a user-friendly, snapshot view for monitoring timekeeper performance. They also seek reports to monitor, measure, manage, and meld together the billing cycle with back-office business operations. And, most importantly, they want the ability to effortlessly capture more billable time using the features and functionality of a legal practice management solution with a fully functional mobile app.
The Billable Hour – A Core Component of Your Law Firm
Billable hours are a core component required for every law firm to achieve financial success. Capturing and managing billable time provides the groundwork for measuring and managing timekeeper performance. It also offers the ability to forecast and budget for future business operations.
Yet, for this dreaded mission-critical task, timekeepers are willing to suffer through inconsistent manual processes. At the end of the month, they are rebuilding and recreating billable hours from sticky notes, correspondence, phone call logs, and calendar entries. Not realizing that this prehistoric method of tracking billable time is time-consuming, inefficient, and wastes valuable billable hours.
When timekeepers rely on outdated server-based software with no Cloud-based technology or mobility options, they are stuck-in-a-rut. They do not have the ability to meet the modern work trend of capturing and managing billable time anytime, anywhere.
Unfortunately, management may not realize these daily inefficiencies that challenge timekeepers trying to complete even the simplest time-tracking tasks. By relying on outdated software to track and monitor timekeeper billing performance, law firms lack the modern business intelligence and real-time dashboards needed to streamline and improve workflow efficiency.
Why would management think billing is broken if the “bills go out and money comes in”?
Billable hours must be captured, monitored, measured, and managed in real-time—all day and every day as client work is done. This is essential for efficiency and accuracy. Otherwise, if billable time or client expenses must be recreated, you’re costing the firm overhead time, which means lost billable time, which means lost revenue.
Every second of every minute counts as revenue when it is time to invoice clients and get paid.
Streamline the Billing Cycle with Modern Technology
Law firms perceived as “cutting-edge” or “boutique” are abandoning on-premise servers and migrating to a Cloud platform to virtualize their law firm. These progressive, modern law firms are continually shifting with trends to seamlessly manage and meld together billing cycles and accounting processes—boosting their revenue.
They have migrated to a Cloud platform and implemented a legal practice management solution to virtualize business operations. By aligning their entire business operations with up-to-date technology, they are able to keep a competitive edge, increasing their productivity and profitability.
Business intelligence and smart tools that provide for anytime, anywhere access improve efficiency. They help your law firm efficiently capture and manage billable time and client expenses while also allowing you to generate invoices, track outstanding receivables, manage client Trust Funds, and take advantage of powerful post-billing report functionality.
Hourly Billing and Fee Arrangements
The billable hour is no longer the standard fee billing arrangement for law firms. Clients are demanding flexible, alternative fee arrangements to meet modern business trends.
Now, standard operating procedures for onboarding clients include a wide array of fee billing offerings to meet demand.
These fee arrangements include a:
- Capped monthly fee
- Recurring flat fee
- Contingency fee
- Evergreen retainer
- Value-based billing option
Diverse and alternative fee arrangements lend themselves better to practice area billing standards or mandated litigation billing guidelines. Litigation, corporate, family law, and insurance defense practice areas tend to offer hourly and retainer fee billing arrangements. Estate planning, bankruptcy, and criminal defense rely on flat-fee fee billing arrangements and entail fees paid upfront or on completion of work.
Regardless of the law firm practice areas or flexible alternative fee arrangements offered, clients are mandating more complicated fee structures. Without tools in place that automatically assign fee structures or fee arrangements, on a client or case basis, errors will be made during the billing cycle and appear on invoices.
Errors on invoices lead to disgruntled clients and unhappy timekeepers. In addition, staff must waste overhead hours and billable time to immediately research, resolve, and respond to fee billing issues. Time and hours that could have been spent on projects or billable client work are now lost revenue.
Without a time, billing, and accounting software that generates accurate and error-free invoices, payments are delayed and clients may be lost.
Now more than ever, to stay on the competitive edge, it is imperative to implement an innovative solution designed and engineered with business intelligence. With fresh modern technology, your law firm will efficiently manage complicated fee arrangements to meet legal industry billing standards, litigation billing guidelines, and client demands.
Billing Cycle Challenges
The first step forward …. is to take a step backward!
Before a law firm can fine-tune inefficiencies, steps must be taken to identify, pinpoint, and understand the time capturing and billing cycle, along with current technology challenges. This will give your law firm the necessary knowledge to support the management team and technology committee. It will allow them to analyze processes and procedures to identify the weak links. Then, once identified, it will help your law firm evaluate and implement a fully-integrated time, billing, and accounting solution to streamline the billing cycle.
As you begin to identify these challenges, complicated billing requirements, and internal operation loopholes, ask yourself the following question to jump-start the evaluation process.
Are your timekeepers spending too many hours capturing and managing billable time and client expenses?
Capturing and managing billable time and client expenses must be quick, easy, and intuitive—a pain-free process. Timekeepers must have anytime, anywhere access to the billing solution and a fully functional mobile app. Modern legal practice management solutions provide powerful business intelligence tools and real-time dashboards to monitor performance and increase billing efficiency.
As timekeepers work client cases and attend court hearings, billable time and expenses must be captured immediately and in real-time. If timekeepers do not have access to billing software, and time is not entered as work is completed, revenue is lost.
It is a proven fact that when timekeepers have access to enter and review time and expenses as they work client files, billable hours increase, and more expenses are captured.
Law firms that rely on manual procedures and antiquated time, billing, and accounting software are working in the stone age—wasting overhead hours and losing revenue. Without tools to maximize efficiency, timekeepers cannot efficiently track billable hours and client expenses.
They are frustrated by being forced to create time-consuming work-arounds to capture and manage billable time and client expenses. Capturing and managing time in Excel, using sticky notes stuck to files, or on an incomprehensible handwritten timesheet staff is a worst-case scenario. It only offers a scattered attempt to recreate billable hours at month-end.
The bottom line is if your timekeepers are mandated to use outdated, server-based software to capture and manage billable time and expenses, overhead costs go up and revenue goes down.
This antiquated way of managing your law firm financials and business operations will not survive in the current work trend. If your law firm does not adopt a state-of-the-art technology platform with Cloud-based solutions and a mobile app to streamline processes, it will never be “cutting-edge” or “boutique.”
Here are questions to ask:
- Is your technology locations on a Cloud platform to provide timekeepers with full mobility options?
- Can your timekeepers capture and manage time and expenses anytime, anywhere?
- Does your mobile app have artificial intelligence, making it capable of providing financial data in seconds?
- Does your time tracking technology provide a crisp, fresh, intuitive, real-time user interface?
- Do firm procedures mandate time and expenses be current and entered when doing client work?
- Do real-time dashboards for managers and timekeepers provide tools to monitor performance?
- Are billing staff constantly harassing timekeepers to get time in the system?
- Does the software provide reminders for timekeepers when billable time is missing?
- Are pre-billing and post-billing reports accurate and comprehensible?
- Are practice area workflow processes in place to seamlessly capture billable time?
If your answers to any of these questions are NO, then there are major inefficiencies within your law firm and the outdated software you are using does not off the functionality for capturing and managing time and expenses that you need. Internal processes and procedures must be streamlined for efficiency and your law firm must migrate to the Cloud platform, implementing a fully-integrated legal practice management solution to improve profits.