GPSOLO June 2008
Billing and Bookkeeping
“I just want to keep track of my time and print my bills.” That was the mantra for many small firms in the early days of computerized legal billing. Today’s needs are the same but are expressed more specifically, with a high expectation for quality, usability, and affordability. I conducted an unscientific poll of several one- and two-attorney firms and found they want billing software that is:
- easy to implement;
- easy to use;
- multi-purpose; and
- cost effective.
This article provides guidelines that will help you to attain these goals when planning a billing system purchase.
First, be sure to use a billing system designed for lawyers. One respondent to my poll said, “I did everything in Word®, using tables …and entered the amount owed into QuickBooks®, but after hiring staff it got complicated; some bills were taking me 40 minutes to put together.” Since moving to legal billing software, this attorney enjoys being able to instantly see what each client owes and what has been billed in the past. If you want to spend up to 40 minutes doing each bill, use Word. Otherwise, get software designed for legal billing.
Keep track of your time electronically, while you work, wherever you work. Use the software’s timer to record all of your time—billable and non-billable, flat-fee and hourly—so that you can get a full picture of your productivity. If you use a laptop or other computer while away from the office, install the remote version of the program. The top systems also offer links to handhelds. Remote access via the Internet with Remote Desktop or GoToMyPC can also facilitate entering time while away from the office.
The client’s bill is the finished product of your billing system. When evaluating billing software, look at sample bills from a variety of sources and select your favorite style. Seattle attorney Maury Kroontje says, “Other than finding clients, I would say the most difficult immediate challenge facing a new law practice is figuring out how to get a professional-looking invoice.” Your system should present bills that are easy to read and understand. If the built-in bill templates aren’t to your liking, you should be able to modify them to make changes such as adding your firm’s logo or re-arranging the order in which items appear.
So you’ve entered your time and printed you bills. Now what? Legal billing is commonly understood as the process of tracking and billing time and expenses and receiving payments from clients. Other financial tasks connected to your billing activities fall into the bookkeeping (or accounting) category and include:
- managing trust accounts
- keeping track of payables
- writing checks
- reconciling accounts
- preparing payroll
- posting to a general ledger
- preparing financial statements
Whether you handle these functions yourself or have a bookkeeper, use your legal software for these functions. You will save data entry time, learning time, and the technical headaches of linking to third-party generic software by using bookkeeping-capable legal software. Bridge the billing/bookkeeping divide and you will have instant access to bank balances and other financial data as you bill.
One of the best connections you can have is between your billing and case management software. For example, users of Time Matters®, a popular case management program, can arrange the case list to show case name and number, trial date, judge, trust account balance, and aged accounts receivable balances—so long as these users have opted to use the system’s billing and accounting companion. Conflict checks with an integrated system will extend beyond billing data to records such as file notes and phone logs.
Take advantage of connection buttons in Outlook, Internet Explorer, and other applications so that you can track your time without leaving the Office application. For example, PCLaw has a Web Timer that lets you send time and expenses entries from Internet Explorer.
Kroontje suggests that new solos budget at least two solid weeks in the first 60 days of opening an office to get billing and accounting software up and running; he also suggests hiring a consultant to guide you through the process. Talk to your accountant to plan for reporting requirements. A consultant can help you to easily produce the reports your accountant needs and advise you on the reports you need to effectively manage your practice.
Some products meeting the guidelines set forth in this article are: PCLaw ( www.pclaw.com), Billing Matters ( www.timematters.com), Tabs3 ( www.tabs3.com), and Amicus Attorney ( www.amicusattorney.com). A two–user license for these products ranges from about $700 for stand-alone packages to $1,500 for packages with case management integration. Add an additional $1,000 to $2,000 for an annual support plan.
Arita Sims is a legal technology consultant and president of A.B. Sims, LLC, in Seattle, Washington; you may reach her at email@example.com.