Billing and receiving payments are central to running a successful law firm. Yet, many lawyers struggle with clients delaying payments — or worse, not paying at all. The issues that flow from this can create cash flow challenges, disrupt operations, and even strain attorney-client relationships.
Fortunately, there are steps you can take to avoid these problems and make timely payments the norm. Below are seven actionable tips tailored for lawyers to help you get paid faster and without hassle.
Start with clear communication about your fees. During the initial consultation, explain how your firm charges — whether it’s hourly, flat fee, or any other structure — and when payments will be due. For example, if you charge interest on late payments, highlight that upfront. If you require a retainer, explain how retainers work and how you will apply those funds.
Also, avoid using overly complex language in your engagement agreements. Consider having a trusted, non-legal friend read through your agreement template and give you feedback on sections that are difficult to understand.
And although a well-drafted engagement letter that lays out your policies is a must, a verbal explanation during the first meeting can go a long way toward building trust and avoiding misunderstandings. Because — let’s be honest — clients don’t always read everything thoroughly, so discussing your policies both verbally and in writing helps make sure you and your client are aligned.
Lastly, don’t overlook follow-ups. Once clients sign the engagement letter, reiterate your policies in a welcome email. To make sure this step — and the rest of your law firm intake process — happens smoothly every time, you can use workflows in legal practice management software to keep tasks on track and avoid missing important details.
Clients appreciate flexibility when it comes to how they pay. Traditional checks may work for some, but many clients now prefer digital options. Offering payment via credit cards, eChecks, and online platforms can remove barriers to timely payments.
Make sure the payment options you choose comply with ABA and local bar regulations, especially when dealing with trust accounts. Platforms designed specifically for law firms are often a safer choice, as they understand the unique compliance rules lawyers face. For the best results, consider using legal practice management software with a native payment processor. Connecting your payments directly to your cases like this simplifies the billing process.
For instance, if your firm uses an evergreen retainer model, online payments through your practice management software makes replenishments seamless. You can even send clients automated reminders and process payments directly through a link via text or email, saving everyone time.
Retainers are an effective way to secure payment before work begins. Whether you’re handling a family law case, drafting contracts, or managing ongoing litigation, a retainer minimizes risk.
For larger cases, consider splitting the retainer into manageable portions. For instance, instead of requesting $20,000 upfront, ask for an initial retainer of $10,000 and schedule incremental payments tied to specific case milestones. Using this approach can ease the client’s financial burden while keeping funds flowing into your firm to support your ongoing work.
You must also be diligent about keeping clients updated on retainer balances. Many firms have faced complaints from clients who claim they didn’t realize their retainers were running low. Regularly sending balance updates or low-retainer alerts can prevent these misunderstandings and give clients time to replenish funds.
Accurate time tracking is one of the simplest ways to avoid billing disputes. Lawyers who wait until the end of the week — or even the month — to log their hours risk losing billable time or forgetting important details.
To avoid this, track your time as you work. The easiest way to do this consistently is using legal-specific software that allows you to record time with a click, directly from your computer or mobile device. Detailed records also help clients understand exactly what they’re paying for, reducing pushback when it’s time to collect.
For example, if you spend two hours researching case law and another hour drafting a brief, log these tasks right away with clear details. While it’s fresh in your mind, you can include what you researched, why it’s relevant, and the purpose of the brief. The more specific and transparent your invoices are, the fewer questions you’ll get from clients about the value of your work.
One of the biggest mistakes law firms make is inconsistent billing. Sending out invoices late — or at random intervals — can create confusion and delay payments. Clients are more likely to pay promptly when they know when to expect your bill.
Monthly billing is a common standard, but for clients with shorter-term matters, weekly or bi-weekly invoices might make more sense. Regular invoicing also keeps clients from being hit with large, unexpected bills they might struggle to pay.
Legal billing software can make this process much easier by allowing you to quickly generate detailed invoices based on the time and expenses you’ve already tracked. Instead of taking hours to manually piece together invoices — which makes it even harder to send invoices regularly — you can create polished, accurate bills in just a few clicks.
Clients want to feel involved and informed about their matters, especially if they’re paying significant sums for legal services. Send clients regular updates on case progress, breaking down what’s been done and what’s next. This keeps them engaged and reinforces the value of your work.
Additionally, clients who feel in the loop are less likely to dispute charges and more likely to pay on time. For instance, If you’re handling a complex litigation matter, the client would probably appreciate a monthly progress report summarizing key actions taken that month, like depositions completed or motions filed.
An attorney-client portal can make this process even simpler. Portals allow clients to securely access updates, documents, and billing information in real time, eliminating back-and-forth emails and keeping everything in one place.
The easier it is for clients to pay, the more likely they are to do so promptly. Simplify the payment process by using a secure online payment system. Include a direct payment link in your invoices and email reminders so clients can pay with just a few clicks.
Additionally, for clients who struggle with large payments, offer installment plans. For example, you might allow a client to pay $500 per month instead of a $3,000 lump sum. Structured plans like these reduce financial stress for the client while improving your cash flow.
Strong payment practices do more than keep the lights on — they also enhance your relationships with clients. When billing is clear, consistent, and convenient, clients feel respected and valued. In turn, they’re more likely to trust you, refer others to your firm, and come back for future legal needs.
If managing payments feels overwhelming, legal practice management software can make the process easier. Platforms like PracticePanther allow you to track time, automate billing, and accept payments online — all while staying compliant with the legal field’s numerous regulations.
Want to simplify your firm’s billing process? Schedule a free demo of PracticePanther today and see how easy it can be to get paid on time.
