How to Fix Your Law Firm’s Billing

Why billing is the backbone of a growing firm

Billing is more than administrative overhead. It’s a critical touchpoint in your client relationship and one of the primary drivers of your firm’s growth.

When billing is broken, the consequences ripple across the firm:

• Time worked never becomes time billed. Inefficient processes result in billable work that is never recorded or invoiced.
• Invoices go out late. This signals to clients that paying you isn’t urgent.
• Client trust suffers. Unclear, surprising, or delayed invoices can undo months of good work and goodwill.

The specific challenges often depend on your firm’s structure:

• Solo attorneys often sacrifice billable hours to handle their own invoicing, creating a feast-or-famine cash flow cycle.
• Mid-sized firms see bottlenecks where invoices sit in internal review or on partners’ desks for days or weeks, delaying the entire collection cycle. For many firms, it can take close to 30 days just to get most bills internally approved before they ever reach clients, stretching out lockup and choking cash flow.
• High-volume practices (e.g. criminal or family law) carry the administrative burden of generating hundreds of invoices at once, often leading to errors if done manually.

Fixing your billing isn’t just about getting money in the door. It’s about respecting the value of your work and ensuring your firm has the resources to serve clients effectively and sustainably.

It is also one of the most direct ways to reduce “lockup” the number of days that your revenue sits either as unbilled work or unpaid invoices instead of in your operating account.

Building a modern payments workflow: 4 key components

The solution is to move away from manual, ad hoc billing and toward a modern payments workflow. One that uses technology to remove friction for both your firm and your clients.

1. Flexible payment options

A modern system offers multiple ways to pay without creating extra work for your team:

• Credit card
• ACH/bank transfer
• Digital wallets

Why it matters: Our research shows that 66% of clients expect firms to accept online payments, and that 57% of invoices paid via online payment methods are paid the same day and 85% within a week. Faster payment directly reduces collection lockup and makes cash flow more predictable.

To go further, offer:

• Payment plans for clients who can’t pay in full upfront
• Subscription-style billing where appropriate

This makes your services more accessible while keeping revenue more consistent.

Firms that pair flexible payment options with clear, predictable fee structures (for example, flat fees for common matters) often see fewer disputes over invoices and less time spent re working bills

2. Integrated trust & retainer management

Manually reconciling trust accounts is a compliance risk, a time sink, and a recurring bottleneck. Modern legal billing software handles this automatically.

The fix:

• Implement evergreen retainers so funds are replenished before they run dry.
• Set up automatic notifications when balances drop below a threshold.
• Make it easy to generate trust requests tied to specific matters in just a few clicks.

The result: fewer surprises, less manual tracking, and stronger compliance.

When trust, billing, and payments live in one system, your team spends less time jumping between tools, and you reduce the risk that work sits unbilled because someone is waiting to check a trust balance or issue a separate request.

3. Smart billing processes

If you’re generating invoices one-by-one, you’re burning capacity.

Modern systems go beyond simply “creating an invoice” and, instead, support more advanced capabilities, such as:

• Bulk billing: Generate and send invoices across multiple matters in just a few clicks.
• Flexible fee structures: Combine hourly, flat, and hybrid arrangements without chaos.
• Split billing: For family or multi-party matters, automatically divide costs so you’re not doing math (or re-issuing invoices) by hand.

Smart billing is also about how drafts are created and reviewed. Instead of building every invoice from scratch, some firms are turning on AI capabilities in their practice management systems so that draft invoices are generated automatically from recent time and expense entries, with clear narratives and fewer errors to fix.

Those drafts can then be routed to the right approvers and nudged with reminders, which shortens the internal review cycle and helps prevent bills from getting stuck on someone’s desk.

The goal is simple: less time spent issuing bills, more time doing work that actually moves matters forward.

4. Automated follow-up

Chasing payments is high emotional labor. It drains staff, causes anxiety, and can strain client relationships, especially when your team has to send every reminder manually.

Modern systems automate the follow-up for you.

The fix:

• Set up scheduled, automated reminders for unpaid invoices.
• Use clear, respectful messaging that reminds clients what’s due without feeling aggressive.

This keeps your receivables moving without relying on your team to initiate every tough conversation.

In many firms, there is actually a double chase: first, chasing internal approvers so invoices can be sent at all, and second, chasing clients for payment. By automating both sides of that chase for example, routing invoices for approval, sending internal reminders, and then sending polite client reminders once bills go out you reduce the number of manual touchpoints and the amount of revenue trapped in lockup.

Why billing is a capacity issue, not just a finance issue

We’re used to thinking about billing improvements in financial terms: better cash flow, fewer write-downs, more predictable revenue.

But billing is also a capacity issue.

Every hour your staff spends:

• Deciphering time entries
• Following up on approvals 
• Entering expenses
• Calling clients to take a card number over the phone
• Printing envelopes

…is an hour they’re not spending on high-value, billable work or strategic projects.

This contributes directly to cognitive load: The mental fatigue that leads to burnout, errors, and disengagement. 

The human toll is growing. Our recent survey found that 86% of legal professionals work outside typical business hours, and more than half routinely work past 5 p.m. to meet client needs. Many also report burnout and mental health challenges tied to this constant overextension.

By modernizing payments, you:

• Reclaim staff time for higher-value work.
• Reduce the stress of collection conversations.
• Lower the mental load for clients, who can pay with a click instead of treating payment as another chore.

Some firms are also using AI to further reduce cognitive load. For example, when AI is turned on in a system like Clio Manage, it can parse scheduling orders into deadlines, generate draft invoices with expenses filled in, and draft client updates from recent matter activity, so your team spends less energy on routine tasks and more on judgment and advocacy.

You’re not just improving your bank balance, you’re improving your firm’s ability to focus, perform, and deliver a better client experience.

Next steps for modernizing your payments

You do not have to overhaul your entire financial system overnight. Start with small changes that have a big impact on cash flow and team capacity. Each of the steps below is designed to chip away at both realization lockup (work you have done but not yet billed) and collection lockup (invoices you have sent but not yet collected).

Here are concrete steps you can take now:

1. Audit your speed

Ask: “How long does it take, on average, from work performed to invoice sent?” 

If it is more than a week, look for places where work is sitting in draft, waiting for review, or getting lost in email. Explore bulk billing and template based invoices so your team can move from time entries to accurate invoices in a single, predictable workflow.

Even cutting a few days from this timeline reduces realization lockup and is one of the fastest ways to shorten your firm’s overall lockup period.

For example, With Manage AI turned on in Clio Manage, you can go further by having draft invoices generated automatically from recent time and expense entries, so your team focuses on reviewing and approving bills instead of assembling them from scratch.

2. Enable online payments

Implement a payment processing solution that is built for legal and integrated with your practice management system. Make sure clients can pay by credit card, debit, or bank transfer directly from an online invoice or payment link. The easier it is to pay, the fewer awkward collections conversations your team has to have. Remember: 57% of invoices sent via online payment methods are paid the same day and 85% are paid within a week.

This is not just about convenience. Firms that adopt online payments tend to see smaller collection lockup because money moves from “owed” to “collected” much faster.

When online payments are connected to your billing and trust accounting in a single platform, payments are applied correctly, balances update automatically, and your team spends less time reconciling records across tools.

3. Automate the chase

Turn on automated reminders for overdue bills so the system takes care of routine follow up. This keeps outreach consistent and removes much of the emotional weight of chasing money from your team.

For many firms, it can take up to 30 days to get 76% of bills internally approved and ready to send, which means a month of work is locked up before clients even see an invoice.

Every extra day an invoice waits for internal approval adds to realization lockup, and every extra day it sits unpaid adds to collection lockup. Together, these delays increase your firm’s total lockup, which means more of your annual revenue is tied up as unbilled work or unpaid invoices instead of cash in the bank.

AI-driven workflows can generate draft invoices, populate expense details from receipts, route bills to the right approvers, and send internal and client reminders automatically. In that model, humans still review and approve, but they no longer have to remember every follow up themselves.

Use workflows and reminders on both sides of the process so invoices move from draft, to approved, to paid with minimal manual tracking. Even small reductions in delay at each step compound into faster cash flow and a meaningful drop in lockup over time.

4. Review your pricing and options

Ask whether flat fee or subscription arrangements could simplify billing for parts of your practice, reduce disputes, and improve client expectations around cost (like they did for Temple Law). Consider where you can standardize common matters, bundle services, or include payment plans so clients face fewer surprises and your team spends less time renegotiating every bill.

Research from the Legal Trends Report also highlights a growing interest in predictable pricing and alternative fee arrangements, particularly in consumer-facing practice areas, and firms that align with those expectations often see fewer write downs and faster payment.

Use your matter and billing data to spot patterns: Where do clients frequently question bills, and where are you repeatedly doing similar work? Those are strong candidates for flat fees, bundled services, or subscription-style offerings that make billing simpler and reduce back and forth.

Billing doesn’t have to be a burden. With the right technology and consistent processes, your billing function can become a competitive advantage supporting more time, better cash flow, and happier clients.

Turning on AI capabilities in a system like Clio Manage is one example of how firms are reclaiming time and reducing stress. By eliminating manual invoice creation, speeding up approvals, and reducing errors, they are shortening billing cycles and freeing lawyers and staff to spend more time on client work and less on administration.

When the average lawyer only bills a fraction of the workday, every hour you recover from billing and collections is meaningful capacity you can redirect toward client outcomes and firm growth.