If you want your legal practice to be as successful as possible, you need an effective billing process. You also need to move beyond traditional paper billing and adopt ebilling for law firms. Thanks to advancements in technology, law firms can easily leverage legal ebilling software to save time, improve invoice accuracy, and offer a client-centered billing experience.
In this blog post, we will outline the key benefits of legal ebilling for law firms—from streamlined workflows to faster payments, and more. We’ll also offer tips for how to successfully implement legal ebilling systems at your firm, and provide examples of ebilling software that can help you bill electronically in the most efficient way. To start, let’s look at the concept of legal ebilling for law firms.
What is ebilling for law firms?
While traditional legal billing requires manually creating and sending paper invoices, electronic billing—or ebilling—for law firms is a system of legal billing where law firms can create, review, and deliver invoices to clients electronically.
When working with large organizations and corporate clients that require specific invoice-related formatting guidelines, legal ebilling systems also allow law firms to submit bills electronically. Firms can then review these electronic bills for violations. For example, some organizations require electronic bills to follow specific guidelines for standard billing formatting, like the Legal Electronic Data Exchange Standard (LEDES). LEDES is a standard format that allows organizations to handle a large volume of files and assess invoices by all using the same coding. If an organization uses LEDES formatting (which can also be paired with Uniform Task-Based Management System (UTBMS) codes for further clarity), it will reject invoices with errors or incorrect formatting.
Benefits of ebilling for law firms
Legal ebilling systems can make a law firm’s billing process faster, more effective, and more accurate. Key benefits include:
Save time and money while improving billing accuracy
Ebilling for law firms optimizes workflow by automating many of the traditionally manual tasks related to billing. These tasks include (such as time tracking, invoice generation, and invoice delivery). Whether your law firm uses legal ebilling to send invoices electronically to individual or corporate clients, legal ebilling software saves law firms time.
When lawyers and staff spend less time on manually managing invoices, law firms save money. Also, by using software to automate legal billing, firms also improve accuracy by reducing the chance of manual error or oversight.
Get paid faster and improve cash flow
According to the 2020 Legal Trends Report, lawyers don’t collect on 12% of the hours they invoice. Pair this figure with overdue invoices, and it’s clear that the speed and effectiveness of collections impacts law firm cash flow.
Billing electronically can help close the gap between invoicing and collections in a couple of key ways:
- More accurate, clear bills get paid faster. Clients are less likely to reject or dispute invoices that are easy-to-understand and error-free. Clear and accurate invoices also save your law firm from unnecessary back-and-forth communication to explain line items or correct formatting errors.
- Bills sent (and paid) electronically are more convenient for clients. Sending bills electronically removes delivery delays that can hold up payment. And, if firms allow clients to pay legal invoices by credit card, clients can settle and pay their invoices even faster. Legal software like Clio allows firms to send a secure payment link so clients can pay online via credit card.
Make data-driven business decisions
When it comes to making the best business decisions for your law firm, data is key. Ebilling for law firms captures billing data, tracks key legal analytics, and creates legal billing reports so you can accurately understand your firm’s billing-related key performance indicators. For example, here are some of the billing reports you can generate with Clio.
Armed with billing data, you can make decisions based on what’s working, and what areas you firm can improve.
Provide a client-centered experience
As Jack Newton explores in his book The Client-Centered Law Firm, today’s legal clients expect law firms to prioritize the client experience. Law firms can leverage legal ebilling to offer clients a better client experience through increased transparency and clarity in their bill structure—which can lead to increased trust.
How? Whether firms use ebilling to create invoices through LEDES standards or another coding system, electronic billing standards offer an opportunity for clearer, more consistent bills. When law firms standardize bills, the bills become easier to understand, and clients spend less time trying to decipher their bills. Instead, the heightened transparency allows clients to increase trust in their lawyer—especially if they have a consistently smooth billing experience over time.
Better for alternative billing arrangements
While the billable hour is still the norm, many law firms are also adopting alternative billing arrangements. These billing arrangements include flat fees, unbundled legal services, and sliding-scale fees. Clients seeking greater cost predictability or access to legal services would benefit from having these alternative arrangements most.
The 2020 Legal Trends Report notes that 78% of consumers say that lawyers should adopt pricing and payment models to make legal services more affordable. While these alternative billing arrangements help meet client demand, billing can become very complex for your law firm if you’re still using traditional paper billing workflows.
Legal ebilling software features make it simple to track and bill clients when using alternative billing arrangements. For example, Clio’s flat fee feature immediately adds a billable amount under the Work In Progress area of a Matter—making invoicing simple when it’s time to bill.
Legal ebilling workflows
The general workflows for legal ebilling are similar to those you’d find in a traditional billing process—you need to track time, create invoices and send them to clients. Then, clients pay the bill. However, ebilling for law firms automates manual tasks so you can send bills to clients (and clients can pay) online.
For example, a law firm’s ebilling could follow this general workflow:
- Software automatically records attorney time, fees, and expenses.
- Legal ebilling software automatically generates bills, which firms can review and share with clients electronically.
- Once clients receive their bill, they can easily pay their bill—ideally, online. For example, a firm using Clio lets clients pay online by using Clio Payments.
- The law firm’s accounting team sends reminders automatically via legal ebilling software.
How to implement legal ebilling systems
While the specifics of how your law firm implements legal ebilling systems will vary depending on what your clients need, it’s essential to start with a clear, consistent ebilling policy.
Create a clear ebilling policy for your law firm
Just as you would create a policy for any type of law firm billing, you need to establish a policy for legal ebilling. With a clear ebilling policy, lawyers, staff, and even clients are on the same page about how your firm handles electronic billing.
Outline your billing process
How well do you and your law firm staff your firm’s billing workflow and process? A good place to start your ebilling policy is by articulating your overall billing process—from start to finish. Then, look at how new ebilling systems will fit into this process. When moving from manual workflows to ebilling, you will eliminate certain manual steps. That’s why creating a standard process now can ensure consistency and avoid confusion moving forward.
Establish ebilling guidelines and billing templates
While legal ebilling software will provide certain billing templates, be sure to either create or establish the preferred templates for each aspect of your billing process. This could include:
- Billing-related communication templates (for example, you can create a bill message template in Clio Manage).
- Guidelines for when to send invoices to clients in certain situations.
- Language guidelines for billing line descriptions.
Set invoice review requirements
Whether clients have requested specific invoice requirements like LEDES billing or not, establish a standardized review process for lawyers at your firm when ebilling. While ebilling software automates much of the billing process, make sure everyone knows what review steps to take before sending an invoice to a client.
Include the finance team in your ebilling process
How will you include law firm accounting and financial staff in your ebilling process? Consulting with your accountant or financial team can help when creating your ebilling policy. Getting a professional’s point of view will ensure they’re able to access any necessary billing information when you bill electronically.
Establish a standard dispute and collection process
While ebilling can help reduce errors and make it more convenient for clients to pay their legal bills faster, disputes and collections issues can always occur. When creating your ebilling policy, create a set process for what to do if a bill is:
- Rejected (for example, due to incorrect invoice formatting).
- Disputed (for example, if a client disagrees with a line item on their invoice).
This process should include guidelines for who will review and follow up on these issues, and when. In some instances, technology can help. For example, with unpaid bills, you can use Clio Manage to send automated bill reminders.
Sharing your ebilling policy with clients
Your law firm’s legal ebilling policy shouldn’t be a secret—it should be the opposite. If you inform your clients about your ebilling policy from the start, they will know what to expect, how they can pay, and when they’ll need to pay by. Once you’ve created your policy in writing, be sure to share it with clients at the beginning of their client journey (for example, after their initial consultation).
Legal ebilling best practices
Ebilling allows firms to streamline their billing process while ensuring it’s more effective, clear, and accurate. To make the most of ebilling for law firms, consider the following best practices:
Follow standard invoice requirements
No matter what size or type of client organization your firm is working with, it’s important to set up—and stick to—a set of standard, consistent invoicing requirements. These invoice requirements will provide consistency for your firm (for a more efficient billing process) and your clients (for a better client-centered experience).
However, as previously mentioned, it’s also important to consider standard invoicing requirements larger companies may require when ebilling for law firms.
When creating a standardized invoicing system for your law firm billing, consider:
- Law firm billing codes. Let’s say your firm uses an internal system (such as codes like “Meeting” or “Research”) to describe the activities that a client is being for. Or your firm may need to use standard billing codes—like LEDES formatted bills with UTBMS codes. Either way, your billing codes should be consistent, clear, and compliant with any applicable invoice requirements.
- Billing templates. Using a billing template can bring consistency to your invoicing, without the manual effort each time you bill a client. Legal ebilling software may offer options to make this simple. For example, Clio’s legal billing software, lets you choose from bill themes to accommodate your clients’ reporting requirements.
Set clear expectations with clients
Let clients know from the start that your firm uses electronic billing, and what that entails for them. For example, if they will receive their invoice via email. By setting and communicating clear expectations early on, you can give clients a better experience.
Track time accurately
Tracking time accurately has always been important for lawyers, but legal ebilling makes it easier to account for your time and work accurately—with less manual work. For example, with Clio Manage’s legal timekeeping features you can create time entries from calendar events, tasks, and more.
Use clear descriptions
One of the key benefits of ebilling for law firms is that it lets you give clients a more transparent and smooth client experience. So be sure to master the art of writing clear, concise billing descriptions. Follow these best practices for billing descriptions:
- Make them clear. Include enough context and necessary information so that anyone can understand what the description is referring to. For example, “Research” does not give enough detail to be useful, while “Legal research to build an argument for hearing in November.” explains the line.
- Make them concise. On the other hand, avoid being long-winded just for the sake of it. There’s no need to write a paragraph about the minutiae—just describe relevant information.
- Use plain language. Keep legal jargon and overly complex language to a minimum.
Bill consistently and frequently
Don’t let invoices—especially electronic invoices—go unsent. By billing clients regularly, you can help establish clear client expectations while avoiding larger bills that build up over time.
Legal ebilling software
While the right technology and tools are essential to unlocking the advantages and benefits of legal ebilling, investing in legal billing software is a big decision for law firms. This guide on how to decide to invest in legal software can walk you through some important questions to think about when choosing legal billing software like Clio Manage.
Clio Manage’s legal billing software offers all of the key benefits of legal ebilling—while also working with your legal practice management software for a smooth, streamlined process. Clio Manage’s legal ebilling benefits include:
- Simple time and expense tracking. Track in real-time or add time entries from communications, emails, and more.
- Faster and more accurate invoicing. Draft bills in minutes.
- LEDES billing. You can use Clio to easily generate LEDES-formatted bills.
- Flexible online payments. Send bills to clients electronically, and then allow them to pay securely online with their credit card.
To learn more about new law firm billing features in Clio, watch this webinar on new legal billing features in Clio.
Accurate Legal Billing Inc. (ALB)
Designed to integrate with a law firm’s existing billing and accounting software, ALB is an AI-powered platform that automatically processes timekeepers’ entries to ensure that they meet ebilling guidelines. For example, ALB integrates with Clio. This integration helps law firms to:
- Stay compliant with outside counsel guidelines.
- Prevent reductions by ebilling companies on invoices.
- Improve collections and revenue.
Accurate time tracking is key to ebilling for law firms. TimeBro makes it easy and simple to automatically keep track of all your computer activities. That way, you won’t accidentally lose any billable minutes. Serving as a memory aid, TimeBro automatically tracks your computer activities, meetings, and offline time. TimeBro also stores all tracking data on your device, so there’s no access or monitoring from other parties).
With TimeBros’s Clio integration, you can import your matters and tasks to create time entries directly on them, and then export time entries to Clio with one click.
For efficient timekeeping without the effort or manual tracking, WiseTime passively captures your activity while you work and creates a private timesheet. When connected with Clio, WiseTime makes your billing process even more efficient by recognizing your Clio matter IDs (from document names and subject fields) and automatically assigning the correct matter to the activity so you can review it and then send it to Clio for billing.
With legal ebilling software like BillerAssist, you can eliminate potential billing errors right from the source. With its integration with Clio, you can easily import billing entries from Clio, and then BillerAssist will flag any unusual changes and problematic entries. The color-coded flagging system makes it easy to quickly review and correct entries in real-time—so you can prevent errors.
Similarly, BillerAssist EasyCodes Edition works with Clio to streamline billing review, outside counsel billing guideline compliance, and manual UTBMS coding.
While legal billing was once exclusively about traditional paper billing, legal ebilling systems have emerged as a way for law firms to create, review, and send more accurate, clear invoices for clients (even under specific formatting requirements). By using legal ebilling software and tools, firms can save time, while delivering a more consistent and convenient billing experience for clients—even those who require certain unique coding and formatting for ebilling.
Though ebilling for law firms may carry an investment in learning new systems and acquiring new software, if your firm is still dependent on traditional paper billing, you—and your clients—could be missing out on the benefits of legal ebilling.
We published this blog post in October 2021. Last updated: .
Categorized in: Accounting