When things go wrong with your firm’s billing operations, your response will likely be one of these:
- “No problem. We can handle it.”
- “This is a problem, but with a little help, we can recover quickly.”
- “This is a serious problem. It will take weeks to recover.”
Problems with the billing process are inevitable in all law firms. Your staff, systems, and software can fail. The purpose of this article is to provide some tips that, if followed, will enable your firm to better handle the unexpected. The article presents six common occurrences that interrupt or slow down a firm’s billing process. Each event contains hypothetical situations illustrating different levels of preparedness and responses to the event.
The sudden loss of key billing staff will set a firm’s billing process back days, weeks, or even months depending on the firm’s approach to preparedness for such an event. The three scenarios below describe how a firm may handle the loss of the firm’s key billing person.
Firm A. The firm’s billing administrator abruptly leaves the firm and cannot be reached. No problem. The firm has other staff trained on the firm’s billing and accounting software. With the help of the firm’s billing procedures manual and bill status log, the backup billing administrator can handle the bills until a new key billing administrator is hired. The outgoing billing administrator has kept the billing procedures manual current with step-by-step instructions for producing the firm’s bills, including how to log in to the system and whom to contact for help, if needed. The firm has maintained a status log for each billing cycle showing where each billable matter stands in the current billing cycle (e.g., draft bill under review, on hold, final bill mailed or e-mailed, etc.). Whatever the circumstances that caused the loss, Firm A can get its bills out on time.
Firm B. The firm’s billing administrator abruptly leaves the firm and cannot be reached, and no one has a clue about the billing system. A billing procedures manual doesn’t exist, but the firm has file copies of bills, deposit records, and a current accounts receivable report. However, because the outgoing billing administrator kept things locked down, no one has the login credentials for the billing software, not even the firm’s IT consultant. And, if they did have access, they would have to struggle to figure out how to produce bills because no one has been trained to serve as a backup billing administrator. This is a problem, but the firm has a support plan with the billing software company. The company can help the firm log in to the program and put the firm in touch with a consultant who can analyze the data and train new staff. The firm moves quickly to hire and train new staff. It will take some time, but with help, the firm can still get bills out, although a little behind schedule.
Firm C. The firm’s billing administrator abruptly leaves the firm and is nowhere to be found. No one has a clue about the billing system, there is no billing procedures manual, and there are no copies of bills. Before exiting, the billing administrator locked all users out of the system. No one can log in to the software, and the firm has no vendor support plan. There is a stack of recent bills on the billing administrator’s desk but not for all the clients. It’s not clear where the rest are: Already mailed? Not run yet? Who knows? The bank account shows recent deposits, but it is unclear whether they were entered into the billing system. The most recent deposit slips on the billing administrator’s desk are from two months ago, difficult to read, and unaccompanied by copies of checks. The firm had a work-from-home arrangement with the billing administrator, and some of the records may be off-site. It will take considerable time to recover from this situation. The firm may have to contact the billing administrator’s family or associates in an attempt to retrieve the missing records. The firm may even have the uncomfortable task of contacting its clients concerning the status of their bills.
Clearly, Firm A is best prepared to handle the loss of key billing staff. Organized systems don’t just fall into place automatically. Without detailed, well-maintained written procedures, things will go wrong, and the billing process will be delayed. And when the process is finished, the firm may be uncertain that it was done correctly. Firms like Firm A also send most of their bills via e-mail. E-mails have a sent status, and optionally a read receipt. The top legal billing systems feature a built-in e-mail bills function.
Firm B can get its bills out, but it is back to square one, constructing a new version of the procedures that the outgoing administrator kept in her head. This time the firm will put the procedure in writing and make it available to everyone. Learn. Document. Share.
Billing will be delayed for months at Firm C as it tries to find the former billing administrator, engage help from the software vendor to gain access to the software, and engage a consultant to analyze the data.
System problems may occur from time to time. These scenarios illustrate the best and worst approaches to handling them:
Firm A. The billing software displays an unusual message when starting up. Your billing administrator consults the product’s online knowledge base for an explanation. He’s not comfortable following the prescribed steps to correct the message, so he calls the firm’s software consultant for advice. They work together to resolve the issue in a matter of minutes.
Firm B. The billing software has been displaying an unusual message for weeks, but the billing administrator clicks “OK” each time, and the program continues to work. Because it’s working, he doesn’t want to take the time to investigate. He has too many things to do.
Firm C. The billing software displays an unusual message, and every time the billing administrator tries to run a bill, the program locks up. So, he decides to restore the data from last night’s backup. After the restore, the message is gone and the bills are running. A month later, the billing administrator attempts to run the bills, but there are no time entries to bill. On investigation he discovers that when he restored the backup, he created a new database but the timekeepers were still entering time into the original database. He now has the challenge of joining the two databases.
When approaching system problems, first acknowledge that something is wrong. If your software has been displaying an unusual message for weeks, something is wrong. Don’t ignore it. Call the vendor’s support line and stick with them until the problem is resolved. Alternatively, contact a consultant certified on your software who can help to resolve the problem. Always get help before making critical changes to your data, such as restoring from a backup.
The Training Gap
Even the easiest-to-use billing systems require training. You may figure out how to print a bill without training, but what happens next is not always obvious. Consider these scenarios:
Firm A. The firm’s hourly rates are changing next month. The billing administrator has gathered all the pertinent information and has entered the new rates into the system to take effect on the first of the month. When the first of the month comes, all the draft bills contain the correct hourly billing rates.
Firm B. The firm’s rates have changed, but several draft bills contain the old rates. The billing administrator checks her notes from the training session and figures out what went wrong, makes a change to the rate tables, and reruns the draft bills.
Firm C. The firm’s rates have changed and the billing administrator isn’t sure how to make entries default to the correct new rate. He spends hours editing entries one at a time to reflect the new rate. After editing the entries, he runs the draft bills and discovers that several bills contain time that was already billed last month.
I can’t tell you how many firms I’ve encountered firms where the billing administrator has been on the job months or even years and says “I haven’t had any training on this system.” I must admit that I, too, use software such as Facebook and iTunes on which I haven’t had full training, but a law’s firm software is different. Full training on the firm’s billing system is key to preventing problems that slow down the billing process.
Changes in Client Requirements
Are you able to quickly handle changes to your clients’ billing requirements? Consider these scenarios:
Firm A. The client says that in 30 days all bills must be submitted electronically. The billing administrator has taken the training webinar provided by the bill auditing vendor but is not sure how to create an electronic bill with the billing software. She browses the software vendor’s knowledge base and finds step-by-step instructions for this process and prepares a trial electronic bill. With the help of the bill auditing support line, she uploads a trial bill and makes tweaks in the software needed to create an acceptable electronic bill.
Firm B. The client says that in 30 days all bills must be submitted electronically. The billing administrator is just returning from vacation and doesn’t have time for training and configuring the electronic billing herself, so she contacts the firm’s billing software consultant, who configures the program for handling the e-bills and runs and submits the first month’s electronic bills. After the billing administrator has caught up from the post-vacation backlog, she has a training session with the consultant and takes care of the next cycle of electronic bills herself.
Firm C. The client says that in 30 days all bills must be submitted electronically. The billing administrator contacts the software vendor regarding how to configure the program to create electronic bills and discovers that the firm needs to upgrade its years-old version in order to get help with this. The firm does not want to incur the expense of the upgrade, so the billing administrator enters each bill manually on the bill auditing website, copying and pasting descriptions for each entry from the billing program.
In its reluctance to upgrade its software, Firm C has added hours to the billing process each month. Firms A and B have made a one-time investment in the time and training needed to meet the client’s requirement. Without delving too deeply into the particulars of electronic billing, even in firms like Firm A, this requirement will increase the time it takes to complete the billing process because it adds another layer of tasks to the process. Submission, validation, acceptance by the automated review, and acceptance by the live reviewer (including correction, resubmission, and possibly appeal) are some of the hoops firms must jump through to get electronic bills approved for payment.
The task of billing your clients, as any other, requires attentiveness. Do not ask your billing administrator to work on other tasks during the billing cycle. Take time to proofread your bills before they are sent out. Again, consider these scenarios:
Firm A. The billing administrator works in a quiet area and is left alone when working on billing tasks. He has no other jobs at the firm other than billing-related tasks.
Firm B. The billing administrator may be interrupted at any time to put on his paralegal hat and draft a legal document. He had hoped to complete editing and finalizing bills by the end of the week, but paralegal work took precedence.
Firm C. The billing administrator frequently stops work on billing to answer his cell phone or talk to the secretary sharing the same work area. Last month he put a bill in an envelope addressed to the wrong client.
In a busy office, it is tough to stick with a single task, start to finish, before moving to another. If you don’t give your billing administrator the time to focus on billing, the bills (and payments) will be late. If you cannot carve out sufficient time for billing, consider outsourcing this task. Firm C needs to set some rules workplace rules and, for any bills that can’t be sent by e-mail, use window envelopes.
Even the best billing software cannot guarantee timely use. If the timekeepers don’t enter their time promptly, the bills will be late. Automatic time capture programs can help to capture what has been done, but timekeepers must diligently review, assign, and send that information to the billing software.
Firm A. All timekeepers enter their time contemporaneously using billing software.
Firm B. Most timekeepers enter their time contemporaneously using the firm’s billing software, but one uses handwritten time sheets. These time sheets are completed daily but transcribed weekly.
Firm C. Some timekeepers spend a lot of time at the end of the month reviewing files and calendars to construct time entries that they didn’t enter into the billing system as they were working.
There is no excuse with today’s technology not to enter time contemporaneously. A firm like Firm A equips timekeepers with web-based time entry so that they can record their time anytime from anywhere. Firm B may get bills out on time, but it will take more time to bill because of the transcription of handwritten sheets. Firm C’s billing process is held up waiting for timekeepers to construct and enter their time after the fact. Not only will Firm C’s bills be late, they will be inaccurate because the time will be estimated rather than actual.
If you don’t have a billing procedures document, start one now. It’s as simple as having your billing administrator write down everything he or she does, in detail, from the beginning through the end of the billing cycle. Have someone who does not normally run bills use the billing procedures manual and try running the bills to test its effectiveness. Keep your systems and support plans up-to-date. Help your clients by billing them regularly, consistently, and accurately.