4 Ways Legal Billing Can Kill Your Practice

Aug 6, 2018 | Blog

For many solo lawyers and small law offices, legal billing is one of those tasks that may fall into the “I’ll do it later” pile. This can lead to clients receiving bills that aren’t accurate or with a total amount due that they did not expect. Legal billing ethics is a common reason why clients file complaints with the bar. In this post, we’re going to focus on 4 ways that legal billing can kill your practice.


Lack of Documentation

An accusation that you violated legal ethics billing can create quite a dilemma if you failed to stay on top of your billing. It makes defending against the allegation much harder because you don’t have the documentation that you need to prove that the charge against you isn’t true. The absolute best defense if you’re under investigation because of your billing practices is to have this documentation. And you’ll only have it if you make a concerted effort to stay on top of your billing. Relying on your memory and a set of notes simply isn’t enough.

It’s important that your billing has the appropriate amount of information. Detailed notes can make or break your defense. Yet, this brings us to the next way that legal billing can kill your practice.

You’re Not Adhering to State Rules

Every jurisdiction has legal billing ethics. When you read those rules, you’ll learn about just what sort of detail you must include in your bills. Of course, your client-base is also important. For example, if you’re appointed by the court as an estate administrator, you’ll need a different level of detail when compared to standard bills for private clients. Some private clients may want a minute-by-minute break down. Compare what your clients want to what is required in your jurisdiction to determine just how much information you must include to avoid a legal billing ethics complaint.

Even if your jurisdiction doesn’t require a great level of detail, it’s perfectly fine if you want to create detailed invoices that give your client peace of mind about how their money is used.

You’re Not Recording Time Every Day

Of course, we’re not referring to you billing time on every single open matter you have on every single day. We mean you take time each day to update your invoices. With technology, this is very easy to do. There are many legal billing solutions that you can use to automatically track and log time to what you’re working on. You can even set rates for legal staff, such as a paralegal or legal assistant, and set rates for items such as phone calls, copies, and filing fees.

If you have a legal assistant who helps you with administrative tasks or if you have someone dedicated to legal billing, you can use a notebook and write down your time spent on every billable matter each day. You could even do this in an Excel spreadsheet that you share with your assistant. Regardless of whether it’s a physical notebook or a digital file, you should include the date that you’re billing time on, the name of your client, the case number from the court (if there is one), the file number, the amount of time you spent (or time started and time ended), and a succinct description of what you did during that time. For a physical list, provide it to the person who handles your billing every day at roughly the same time. They need enough time to update invoices for that day. If you’re using an Excel file that is shared between you and the other person, agree on a time every day that they should check the file so that they may update invoices.

Understand That Some People Are Never Happy

All lawyers deal with at least one client who complains about the rate they agreed to pay. It doesn’t matter if that rate is $75 an hour, $250 an hour, or $500 an hour. They could be upset that they owe you $1,000 for a project or $10,000. And that can cause them to file a legal billing ethics complaint against you. We’ve already discussed the importance of keeping your billing up to date so that you have appropriate documentation. This is an example of why you need to do just that. In this instance, you’ll use the documentation to show the work you did along with what you charged. It will also show whether you were honest with the client about your rate and your billing practices.

You can’t always stop a complaint from happening, but you can build a solid defense with the right documentation. If you’re facing an ethics complaint, first read this post. Then, decide whether you should explore both limited scope or full scope representation. You can schedule a comprehensive consultation with Zavieh Law by clicking here.