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A Seven-Step Process for Fixed-Fee Billing

 

1. Developing the Billing Framework

  • Review existing fee-setting and estimating processes by practice group.
  • Ascertain what internal financial data is available to assist in quoting fees for the group’s work.

2. Determining the Scope of the Matter

  • Engage lawyers with the appropriate experience and skill to develop a scope document.
  • Make client input and approval part of the scoping process.

3. Quoting the Fee

  • Use past matters of similar scope to determine appropriate fees for the work.
  • If a matter has a high level of uncertainty, quote the fee in phases with fixed benchmarks as triggering points for consultation with the client.
  • Obtain client payment terms in writing, including an agreed-on billing frequency.

4. Using the Engagement Letter

  • Include the approved scope document in the engagement letter.
  • Obtain client signatory approval at the proper senior management level.

5. Monitoring the Matter

  • Determine which member of the client team has oversight responsibility for monitoring the ongoing work.
  • Monitor the work regularly (no less than semimonthly) to ensure that issues that could cause delays or cost overruns are caught early.
  • Engage the help and support of firm management if issues arise that could cause cost overruns.
  • Communicate with the client regularly. Be timely in notifying the client of issues that could cause the fee to increase.

6. Billing

  • Bill according to the agreed-on timetable for work performed within that time period.

7. Documenting the Matter

  • Document the matter in a way that will be useful in quoting future matters.
  • Send a postmortem client satisfaction questionnaire to obtain feedback.
  • Debrief with the client about what went well and what could have been done better.
  • Use the debriefing to refine your service and fee quotes and obtain further work.

Compiled by the Cleland Consulting Group, Inc.

 

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