- While billing policy might not be the most exciting topic, it’s essential. After all, law firms need to be paid for their work at the end of the day!
While billing policy might not be the most exciting topic, it’s essential. After all, law firms need to be paid for their work at the end of the day!
If you haven’t already developed a billing policy at your law firm, now is the time to start. By documenting your law firm billing policy, you can save time, generate more revenue, and ensure all members of your team (and even clients!) understand the process.
While billing seems straightforward, unfortunately, there’s lots of risk for miscommunication which can lead to bottlenecks, unpaid bills, and wasted costs. For example, attorneys taking too long to approve bills or adding too many edits can cause a delay in bills getting sent out. Or, the accounting team may have to spend hours upon hours chasing clients for payment. Often, these inefficiencies occur due to confusion around processes or unclear expectations. With that in mind, follow the steps below to develop an effective billing policy:
Become an expert in the lifecycle of your bills. You should be able to quickly answer the following questions about your firm’s billing process:
Write out your entire process from start to finish, so there’s no confusion—even if you’re a solo attorney. This understanding helps support your bottom line and helps you better understand your clients—giving you momentum to invest in the client-centered experience.
Start by creating clear guidelines and a template for your invoices. These documents should include information on the following:
Remember that templates and guidelines will likely need tailoring depending on your specific practice types. For example, you will probably use different procedures or templates for flat-rate and hourly transactions.
Developing a straightforward dispute and collection process is integral to staying on top of your business. It’s easy to put off unpleasant tasks, which is why many firms leave unpaid bills languishing for months. Remember that the longer you wait, the less likely you are to recover payment for unpaid bills.
Some of the issues you’ll want to consider when developing this process include the following:
You’ll also want to consider your process for dealing with chargeback requests. If you are a Clio Manage customer, Clio’s Payment Operations department will help with chargebacks every step of the way.
When developing a law firm billing policy, one often-overlooked aspect is client awareness. Making your clients aware of your billing policy is crucial for getting paid and avoiding disputes.
The following information, at a minimum, should be made available to all law firm clients:
If possible, provide this information to all new clients during or after their initial consultation. While months (or even years!) could pass before your clients need to worry about their bill, setting expectations from the get-go will help ensure that your clients know what to expect when they receive an invoice.
Having a clear and documented billing policy will help your law firm set expectations, increase efficiency, and maintain good relationships with your clients. However, educating staff and clients about billing expectations is equally important. Doing so will ensure that everyone involved in the billing process enjoys a straightforward and efficient billing experience.