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September/October 2021

Simple Steps: Seven Ways to Improve Your Billing and Collections

Allison C. Shields Johs

Nobody likes to talk about money, but your law firm cannot run properly without it. Tightening up your billing and collections can improve your cash flow, reduce friction with clients and reduce time spent on administrative tasks so you can spend more time serving your clients.

Here are seven ways you can improve your billing and collections.

1. Consider Charging for Your Initial Consultation

While it may not be feasible in all situations, if you offer clients value during your initial consultation, and if you have never charged for an initial consultation, now might be the time to consider doing so. In many cases, a free consultation simply sets the stage for clients to ask for more free advice in the future.

Charging for your initial consultation helps weed out tire-kickers or clients who are unlikely to pay even after they retain you. Once you’ve held a consultation with a potential client, you may be conflicted out of representing other paying clients in the future, whether or not you were retained by the first client.

Adding a fee to your consult shows clients that your time and advice have value from your first encounter. You can choose to refund the initial consultation fee if the client isn’t right for you or apply the fee to the retainer if the client decides to hire you.

2. Have a Frank Conversation About Your Billing Practices

It may be uncomfortable to talk to clients about billing and fees, but it is crucial to ensuring that you get paid on time and in full. Talk to clients not only about your rates and how you charge (hourly, flat fee, contingent, etc.) but about all your other billing procedures as well.

Tell clients how often they will receive an invoice, what the invoice will contain, when the client is expected to pay and if there are any penalties for late payment or failure to pay. For example, will you charge clients a late fee? Will you stop work if the client fails to pay their invoice on time? Will you seek to withdraw from the client’s case? Tell the client the potential consequences for failure to pay upfront; don’t wait until the client fails to pay one of your invoices.

Explain how the client will receive your invoice. Will it come by regular mail? Will the client receive the invoice by email? Will the email come from your office or from an outside service? Discuss how the client can pay the invoice. Do you accept checks by mail? Should the client pay by credit card through a link or through your client portal? Give the client an opportunity to ask questions.

If your firm represents larger institutional clients, such as large corporations or insurance companies, you may be required to adhere to the client’s billing guidelines and electronic billing system. Take the time to understand them. Ask questions about how the client reviews and audits invoices, what they are looking for, and how much detail should be included. Asking these questions upfront can help avoid delays in payment or unnecessary reductions in payments, and reduce administrative time spent appealing the client’s invoice audits.

3. Make it Easier for Clients to Pay

The easier you make it for clients to pay your invoice, the faster you will get paid. Provide clients with several payment options. Cash-strapped clients may like the option of a payment plan or a discount for early or upfront payments.

While payment for legal fees by check was the most common method of payment years ago, it is the slowest method. Allowing clients to pay by credit card provides both faster payment for you and convenience (and possibly reward points) for the client. Credit cards can also be a way for clients to finance a larger retainer payment if they don’t have the funds available to pay your retainer. Although credit card fees can reduce the total amount you ultimately receive, the overall convenience is well worth it.

The shift to more virtual interaction with clients, combined with the proliferation of digital payment methods, has resulted in more clients being comfortable with—and even expecting—online payment systems. Giving clients the option to make automated clearing house payments, to pay through a client portal or with a payment link allows them to choose which method of payment makes the most sense for them and makes it fast and easy to do so.

You may even consider accepting payments, particularly for flat- or fixed-fee services, through peer-to-peer payment portals such as Zelle, Venmo, Apple Pay or Google Pay—but do your research and check the ethics rules in your jurisdiction first.

4. Send Invoices That Are Easy to Understand

Invoices are a communication tool. The easier your invoices are for the client to understand, the quicker you will get paid and the less friction there will be between you and the client.

Use plain language instead of legalese or jargon in your invoices. Develop guidelines for everyone in your firm so that all attorneys and support staff use consistent style and phrasing in their billing entries so clients won’t have to guess.

In addition to the fee for work performed, each billing entry should succinctly communicate:

  • What was done
  • Who did it
  • When it was done
  • How long it took (if billing hourly)
  • Why it was done  

5. Communicate Consistently

Communicating with your clients continuously throughout the engagement is one of your paramount responsibilities as a lawyer. This includes communication about your fees and billing.

If you’ve told your client you will be sending them an invoice monthly, it is a good idea to send a status report monthly, even if there is no fee owed in a particular month. Let the client know you haven’t forgotten about them; tell them why no work was done (you are waiting for the court to decide a motion, for documents from a third party, etc.) and when you expect activity to resume. This will reduce the client’s anxiety about why they haven’t received a bill that month, while keeping them informed, reducing calls or emails to your office.

If a client hasn’t paid their invoice on time, don’t wait until it’s time to send the next invoice to reach out. Develop a follow-up system to remind clients their payment is past due; this could be a combination of telephone calls, emails or notifications from your client portal.

6. Automate

Look for ways to reduce the time spent on billing and collections by using technology to automate repetitive tasks, improving productivity and increasing predictability. Add alerts or reminders to your billing and collections system that trigger specific actions, such as sending out a past due notice or following up for a retainer payment. Develop templates and scripts to ensure consistency and make it quick and easy to send monthly bills, follow up with clients on late payments or replenish retainers.

Use billing and accounting software that integrates with your case management system to eliminate duplicate work and ensure that client contact and case information is complete, accurate and up to date.

If you must bill hourly, use time-tracking software or timers within your billing or case management system that can help you accurately track and record time contemporaneously. Install apps that remind you to bill for phone calls and emails from your mobile device.

7. Review Billing and Collections Regularly

Review your bills, accounts receivable and collections regularly. Do clients routinely dispute your bills or cut your invoices? Do you regularly discount your fees? Are there bottlenecks in your billing system? Are your invoices being sent on time? How quickly do your clients pay?

Regular review can help you recognize problems in your billing system and highlight additional improvements that could be made, while also helping you identify problem clients. Making continuous improvements in your billing and collections system can help keep your firm financially stable and improve relationships with your clients.   

Allison C. Shields Johs


Allison C. Shields Johs is the president of Legal Ease Consulting, Inc., where she works with lawyers and law firms to develop strategies to improve marketing and client service, and increase productivity, efficiency and profitability. She is the co-author of several books, including LinkedIn in One Hour for Lawyers (ABA 2013) and How to Do More in Less Time: The Complete Guide to Increasing Your Productivity and Improving Your Bottom Line (ABA 2014). [email protected]

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