United States: Make Good Billing Practices a Habit

Last Updated: October 12 2018
Article by Shari L. Klevens and Alanna Clair

While attorneys will of course typically communicate via other methods, sending regular bills is an easy way to make sure that the client is aware of the developments in a matter and, more specifically, the amount of work being performed by the attorney.

The end of the year is not the only time to prioritize billing issues. The regular billing and collection of fees not only strengthens a firm financially, it is also consistent with the ethical and professional obligations attorneys owe to their clients.

Rule 3-500 of the California Rules of Professional Conduct provides that "a member shall keep a client reasonably informed about significant developments relating to the employment or representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed." While attorneys may be generally aware of their obligation to communicate regularly with their clients, not all attorneys focus on the fact that regular billing can help ensure that the client is fully apprised as to the status of a matter.

While attorneys will of course typically communicate via other methods, sending regular bills is an easy way to make sure that the client is aware of the developments in a matter and, more specifically, the amount of work being performed by the attorney. Below are some tips for billing effectively.

Enter Time Contemporaneously

As any attorney familiar with billing time knows, it takes discipline to complete a time entry immediately or soon after completing a task. Instead, other demands can take precedence and the time may not be entered into the system until days or weeks later. Trying to recreate time entries long after the fact can result in imprecise billing. For some, it can often result in under-billing, as attorneys may forget to record certain work they performed. At the opposite end of the spectrum, attorneys may over-estimate the work they performed on a matter and bill clients in an amount that is not commensurate with the actual legal services rendered. Neither situation is ideal.

Although traditionalists may prefer paper timekeeping logs, technology has come a long way in assisting attorneys in recording and tracking billable time. These electronic resources include built-in timers, which help attorneys document their time to the tenth of the hour, the ability to store and auto-populate frequently used descriptors, tasks, matters and clients, and readily available information regarding billing data, trends and invoices. These technologies can help attorneys integrate billing into their daily routine and make the entire process more efficient.

To encourage timely reporting, some law practices choose to require that attorneys enter their time on a regular basis, be it weekly, monthly, or even daily. Some law firms even penalize attorneys financially for failure to comply with the internally-set deadline.

Descriptive Billing Descriptions

When completing billing entries, it is helpful to remember that clients are typically not themselves lawyers and thus may not fully appreciate the importance of certain work or why it is taking so much time to complete. It can be helpful for the billing entries to explain why tasks were performed and to what end. Even where the client has been briefed on the overall strategy, the client may not understand all of the tasks needed to effect that strategy. Vague billing entries can even cause unnecessary friction with the client, as they can lead to questions regarding whether the legal fees charged by the attorney were justified.

By contrast, detailed billing entries serve beneficial purposes for both client and lawyer. Not only do they convey in clear terms all of the work that was performed, they can also reflect client consent for a host of tasks, remind the client of a particular course of action, minimize or help resolve billing disputes should they arise, and serve as a defense to a malpractice claim.

Send Bills Regularly

No one likes a surprise bill. While clients generally understand that they are being charged for the attorney's services, bills are a lot easier to swallow when they are sent on a regular basis. For that reason, attorneys tend to have better success in collecting fees from clients when those clients are not surprised as to the amount of or justification for the bill.

One problem with sending bills on a less frequent basis is that it may be difficult for the client to recall why an attorney billed so much for particular tasks in connection with developments that occurred many months ago. For example, the filing of a surprise motion in a lawsuit may result in several lengthy telephone calls with the client to discuss strategy. If the bill for those calls is not sent until several months later, the client may not recall all of the telephone calls or why they were necessary. This can especially lead to problems if the case strategy has since gone in a different direction, or if the outcome of the motion was less than favorable.

Sending billing invoices out erratically is also less than ideal, as clients tend to prefer predictability in knowing when they will be asked to pay. Sending out a monthly or quarterly invoice, even if some periods may contain very little work, avoids raising any eyebrows and helps establish a routine of receipt and payment of invoices for the client.

The most obvious benefit to the lawyer and law practice of sending regular invoices is financial—cash flow holds steady and expenses, such as consultant or expert fees, court costs, and other incidentals, need not be "carried" by the law practice for an extended period of time.

Although billing is obviously necessary for law firms to survive, too many attorneys let good habits go by the wayside because they are too busy with other work. However, by treating billing as a key part of the effective representation of a client, attorneys can ensure that their billing practices work to the benefit of both the law practice and the client.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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