Choosing new billing software from among the many available options can be complex. Start by answering the questions below.
What are your billing goals? Your goal may be simply “get paid.” However, you should also consider the bill as a vehicle for communicating with your client and showing the value of the relationship. The invoice reflects what was done and can help keep the client informed of developments in the case. Because it may be a regular communication with the client, it must be clean and without spelling errors. It can also show work done without charging—revealing value added for the client.
What is the environment for the software? Does your firm want a desktop-based solution, or do you prefer to operate in the cloud? Your answer may be influenced by the locations in which people work, along with current hardware available. There is also the option to run “desktop” software in the cloud using a hosted solution. All options should be explored. The environment also involves other programs being run by the firm with which the billing software may need to share information. This could be links to accounting software or practice management software. Minimizing the need for double-entry between products will make the firm more efficient and reduce the chances of missed or incorrect billing.
How do you send bills? If your firm wants to send bills via e-mail, make sure the software you pick will work with your e-mail system. Some software will only work with MAPI-compliant e-mail programs, such as Outlook, while others will work directly with e-mail programs such as Gmail. Also make certain that the e-mailed bill will look the way you want and be easy for clients to open and read. Depending on your practice area, you may need to prepare e-bills in various forms. If you need Ledes98 or LitigationAdvisor capability, make sure the software you choose can handle this. It’s important to investigate this area carefully as some firms require Ledes98 formats that are not standard. If you are already working with clients that require Ledes98 or other custom formats, make sure you get the exact field layout, including any handling of adjustments. Then make sure the software can create the file to match the requirements.
If you have clients to whom you send bills using snail mail, some billing companies will actually print and mail the invoices for you. While there is a charge for this, you may find it is more economical than doing it yourself.
How does the firm want to be paid? Firms that accept credit cards must have a billing program that makes this process easy. You may want a billing program that can send an invoice with a link for clients to log in and pay your firm. If you accept credit cards for interest on lawyer trust accounts (IOLTA) and operating expenses, make sure that the payments can be properly handled and recorded to avoid bar association problems.
How should the bill look? Make sure the solution you choose takes into account what you want shown on the bill. If different clients need bills with different information fields, it is important to pick a product that can do this automatically, without the billers having to make changes when running bills.
What billing process are you used to? Consider your firm’s workflow. How should pre-bills look? Some firms like to review a bill as it will go to the client, but others want a more detailed pre-bill that they can review. Consider the ability to put bills in draft and make changes and how easy it is to make changes at different stages of the billing process. Some programs allow bills to be undone regardless of what has been done already, while other programs are more limiting.
What security restrictions do you want? There are lots of elements to security, not only who can see the billing data but the ability of different people to have different limits in terms of visibility of client or timekeeper data. Also consider if you need limits on when data can be entered—can I enter a billing item for last month? Security may also encompass an approval process for time and expenses as well as approval on the bills themselves. Think also about what reports will be run and who will have the ability to run them.
What are your most important billing reports? Look at the bigger picture and determine what reports you need. If your firm policy is to allocate a percentage of fee revenue based on originating attorney for the matter, make sure the software will support that. Similarly, if you pay attorneys based on collections or you need to track when costs have been reimbursed, make sure you can get these reports easily.
I recommend making a list of the reports you currently run and what is missing. Think also about what your firm should be measuring to understand the firm performance. These reporting requirements should be a part of your evaluation.
How efficient are the steps for entering time records? If your firm bills by the hour, you want to capture all your billable time. For attorneys and other fee earners, timekeeping is necessary but bothersome. Your software should make it as simple and fast as possible. Make sure you understand each of the actions required to enter and save a time record. Pay attention to features that make it easy to select a matter and that automatically fill in other information based on this selection. Are there links to recently used matters? Is the billing rate automatically assigned based on how you bill your clients? Especially in a cloud-based billing system, how long are the delays involved in selecting choices and saving a record?
Can you record time outside the billing software? Are you able to enter time records on mobile phones and devices? This can be tricky. Your device must have all your matter and rate information stored within, in a secure cloud service, or accessible across the Internet; or the process for bringing in data must adjust the rates. How bothersome is the time entry process on your device? A good mobile app can pay for your entire billing system by capturing billable time that would otherwise be lost as a result of the all-too-common decision, “I’ll enter that time back at the office,” without consistent follow-through.
Does the billing software link well to your practice management system? Products from different vendors might have some limitations or synchronization issues. Sometimes even products from the same vendor can have problems working together. Dig into the details of what information is shared between the billing software and practice management software. If you have a meeting or teleconference entered in the calendar, can you create a time record that inherits the matter, amount of time, and timekeeper so you don’t have to re-enter this information? Wide variations exist in how much and how well the characteristics of your matters can be integrated into reports generated by your billing software.
How much time and money will it take to convert to the new billing system? Billing software typically has a long list of functions, options, settings, and types of entries. Setting up the system so that it produces invoices according to your needs, classifies billing entries, inserts standard service descriptions, and works with your accounting system or handles your accounting takes time and outside assistance. You can learn a lot about the process by talking with another firm that has gone through it. An independent consultant who has worked with multiple firms can give an even more informed view of what needs to be done and how long it will take.
Are there options for all the billing arrangements you need? Beyond the basics—hourly, flat fee, retainer, contingent—does the software support alternative billing arrangements you use now or want to use in the future? Check to see if you can do a la carte billing involving some fixed fees for particular services or service bundles plus hourly charges for other services. This approach can be a win-win for you and your clients, giving them more predictability and choice while allowing you to profit from your investment in document automation.
What type of support and training do you need? Too often a firm will leave it up to one person to learn the new system on his or her own and then train others on what they need to do. More formal training will pay dividends by sparing you from the wasted time and frustration of avoidable mistakes.
How do you learn? If you want to watch videos to learn about the program, make sure they are available. If you want someone to come on-site and provide training, customization, or follow-up support, find out if there is someone nearby certified on the software. Flying in someone for training will add to the expense of getting started. In today’s environment most vendors or consultants can provide training remotely, but the training should fit your needs.
Support can vary both in terms of the availability and the amount that is included. Do you need a support contract to get help, or can you get support “as needed,” either directly from the vendor or from a certified consultant? What are the hours of support? If you are in Hawaii and support is from 8:00 am to 5:00 pm Eastern Time, this may significantly impact your access. Support can be phone, chat, or e-mail, depending on the vendor. You should verify that support is available in a way you are comfortable with and find out what the typical response time is. If you are seriously considering a software program, try calling or e-mailing support and see how long it takes to get through.
What historical billing information will and will not be transferred to the new system? If you have extensive historical billing, you can either keep the information for reference in your old system, if that is practical, or convert as much as possible to your new system. Another option is to print out multiple reports containing historical information that cannot be transferred. Printing reports to PDF will often give you some search capability and saves trees.
What are the costs of the software? If your budget were unlimited, then the costs would not be a factor. However, this is rarely the case. Software can be priced based on the number of timekeepers, number of computers where you are going to install, number of simultaneous users, or other factors or combinations. Make sure you know the pricing model so that you are making an informed evaluation. When you look at pricing, consider all these components:
- first-year software cost;
- conversion price (how expensive it will be to get your data from your current program into the new software) and what will be converted;
- customization by a consultant;
- training costs, including the soft cost of lost time;
- costs for support and upgrades; and
- labor costs after the first year for changes and upgrades.
Where can you get other opinions and advice on choosing a billing system? Software recommendations can come from your bar associations, trade publications, colleagues, and consultants. The American Bar Association Technology Resource Center Buyer’s Guide is an online source of information. Once you know your needs, you can narrow the field and test to identify the program that will help your firm get paid and grow.