Going Digital: The Why and How of Legal Billing Software
The Typical Billing Process
Billing is a vital part of any business operation. As such, law firms are expected to have a standardized and streamlined billing process to make it easy for both the firm and their clients. However, many firms still end up having trouble billing their clients and chasing down payments. Too often what should be a straightforward process may become tedious, repetitive, and time-consuming.
Generally, a law firm’s operations and billing process follows these basic steps:
- Acceptance of client and opening of the case;
- Logging of billable time and other fees throughout the case;
- Drafting the bills and expenses for the case at the end of the month (or at the end of a short case) by the staff or attorney;
- Adjusting the costs and approving the bill;
- Creating the final bill and sending it to the client for payment;
- Client pays for the bill through accepted payment methods;
- Law firm accepts and acknowledges payment; and
- In case of late payment, the firm sends follow-up reminders to the client.
Despite its simplicity, there’s just so much room for errors, delays, and avoidable costs — the attorney may take too long to edit or approve the bill, or a bill may even be sent to the wrong client, to name a few.
It’s not enough to establish a streamlined billing process and policy to minimize these issues, a dependable legal billing software can save your firm valuable time and money, while making things easier for you and your clients.
Is It Worth Investing in a Legal Billing Software?
Many lawyers see law firm billing software as an expensive “optional” tool rather than an essential asset. While it’s true that a firm can operate and survive using a traditional billing process using paper, spreadsheets, and calculators, a billing software can save any firm a lot of valuable time.
In order to help you determine if getting a legal billing software is worth the investment, it’s important to determine the amount of time your firm spends on. This involves: (a) computing and creating invoices each month, (b) reviewing and editing bills, (c) sending bills to the clients, (d) processing payments, and (e) tracking and following-up on late payments.
Regarding late payments, the longer bills are left unpaid, the less likely that they’ll be paid. Moreover, these unpaid bills can stack up and become much more difficult to track and manage, especially when you consider the varied payment plans for each case and client.
This is where traditional billing fails and where an attorney billing software becomes an invaluable asset.
Advantages of Using Legal Billing Software
The main purpose of a legal billing software is to save your firm valuable time and money and minimize errors in your firm’s billing process. Although there are a handful of available legal billing software options in the market, they generally offer the following advantages over traditional billing:
- Save time and money. A legal billing software can significantly cut the time needed in creating, calculating, reviewing, updating, and approving of bills. Moreover, it streamlines the process of sending out of bills and updating payment records, as well as tracking and following-up outstanding invoices. What may take hours (or even days) may only take a few minutes and keystrokes.
- Consistency and Customizability. Billing software often includes a myriad of ready-to-use templates which can easily be modified, as well as scheduling for bill delivery and reminders so you won’t have to worry about manually sending out the invoice to every client each month. Additionally, most legal billing software allows for billing customization to fit various payment plans for each client.
- Transparency and Trust-Building. Legal billing software often utilize e-billing standards such as LEDES or Legal Electronic Data Exchange Standard that make it easier for the firm to track and enter the expense entries for the case, and also for the client to see what they’re paying for. This improvement in transparency increases client trust and minimizes the possibility of disputes, knowing that their bills are consistent with the agreed-upon billing guidelines.
- Improved Management of Outstanding Invoices. As mentioned earlier, unpaid bills can accumulate and become a challenge to manage, and the longer an invoice is unpaid, the less likely it would be paid. A legal billing software can help firms manage payment records and late payment with just a few mouse clicks.
- Provide Law Firm Analytics. Billing software can keep track of the firm’s client turnover and payment data. As such, this can help law firms come up with better decisions on future pricing models, payment options, and strategies.
Some billing systems offer other features and advantages such as cloud-based access, mobile integration, high-end encryption and backup, or even full management solution (scheduling and other administrative tasks on top of billing).
How to Choose the Right Billing Software
We’ve established how important a lawyer billing software can be, but since there’s no shortage of options to choose from, it becomes a problem of which one is the right fit for your law firm or practice.
A quick google search using the keywords “best billing software” shows numerous results, with each billing software claiming to be the best in the market. And while aggregate reviews and testimonies can help you narrow down your options, it’s integral to note that choosing your firm’s legal billing software should not be a one-size-fits-all approach.
You should take note of the following considerations when picking the perfect legal billing software for your firm:
- Price and Payment Options. It goes without saying that you should choose a software within your firm’s budget. Oftentimes, when it comes to any software, you get what you pay for and the most affordable solution may not always be the best. Additionally, most billing software nowadays offer subscription-based payments (monthly or annually) but there are those that offer a (often-huge) one-time fee. For small to medium firms and solo practitioners, a subscription-based payment option would be the most practical choice.
- Size and Scalability. Choose a legal billing software that fits your size but can also scale with your firm’s eventual growth and expansion.
- Integration and Ease of Use. You’ll want to check user reviews and demos to check how easy it is to transition your current billing process, and also the software’s user-friendliness.
- Support and Maintenance. It’s vital to pick a software that offers 24/7 support in case something goes wrong with the software. For bigger firms with more large-scope legal billing software, check if the company offers training, integration, and maintenance services.
- Accessibility and Server Setup. There are generally two options when it comes to the software servers: on-premise (requiring a physical server within the office) and cloud-based. Bigger firms that have their own IT team can afford and maximize the benefits of an on-premise server, while small to medium firms are better off choosing a cloud-based system which also allows authorized users and devices to access data anytime, anywhere.
How LegalMatch Can Help
LegalMatch’s legal marketing services provides member lawyers with an excellent lead generation system to ensure a steady flow of local clients. With LegalMatch’s attorney-client matching platform, lawyers are able to obtain relevant information that’s normally acquired during initial consultation. This allows attorneys to assess whether the potential client’s legal concerns fall within their area of expertise, even before any actual communication happens.
LegalMatch also offers in-house training for industry best practices. This includes the use of the LegalMatch web and mobile app, as well as other third-party tools used by our best-performing member lawyers such as legal billing software in order to maximize their law firm’s productivity.