What’s the best process for creating a law firm invoice? This is definitely not a topic that will be answered by the typical class in law school or any other training for legal professionals. And yet, billing and receiving payments are some of the most fundamental challenges for the survival and success of any firm.
Just consider the many difficulties with law firm billing. It can be a huge burden for law firm staff, where lawyers, paralegals, and other legal professionals spend more time creating invoices and chasing down clients for bill payments than they do on actual legal work. Invoice tracking can also be cumbersome, especially where there may be different law firm invoice templates for different practice areas or client arrangements—hourly rates versus flat fees, for example.
On top of these challenges, add on shifting client expectations for payments. In a world where so many payment options are now digital, many clients will shudder at having to mail a check or even provide in-person payment. In addition, they often seek payment flexibility, such as payment plans which allow them to pay large legal bills over time.
Now we can get a sense of why it’s so important to optimize and streamline your legal invoicing process. We can also see why law firm invoicing can be made simple with Clio Payments, the legal payment solution built within the Clio Manage infrastructure.
How do I make a legal invoice?
The legal invoicing process typically begins when lawyers and staff log their billable and non-billable time working on a client file. At the appropriate time for billing—perhaps on a monthly basis, when the legal matter comes to an end, or some other milestone event—the lawyer responsible for the file will review time entries, revising or removing entries when necessary. Finally, a staff member will prepare an invoice detailing the work done and the amount owing, then send it to the client.
A note on law firm invoice templates
Firms can immediately streamline the billing process by having invoice templates in place. It bears noting there are many free law invoice templates available, such as this billing template provided by Clio. While these templates will save time for your staff, they are still not a perfect solution, since they cannot perform many of the key functions provided by legal billing software such as Clio Payments.
How can legal billing software help my law firm?
The traditional billing process is time-consuming and can pull legal professionals away from more productive work. This is where legal billing software can help by saving time and reducing inefficiencies in the billing process.
One example of a specific area where billing software can make a difference is online payments. According to Clio’s research, growing firms are more likely to adopt online payment processing and use online payments with clients. These firms are using legal billing technology to implement these changes.
We can see some excellent examples of how billing technology can assist firms with Clio Payments. Clio Payments will automatically record payments, post them to the appropriate matter or client account, and sync its records with your firm’s accounting platform. It also allows your firm to provide clients with customized payment plans, as well as accept online payments in a variety of forms, including credit, debit, and eCheck.
We can get a better look at how Clio Payments streamlines the invoicing process by examining that process step-by-step.
How a law firm invoice is created
By reviewing each stage of the legal invoicing process, we can see even more clearly where billing technology becomes essential.
Creating a law firm invoice template
Creating a law firm invoice template will save a great deal of time during the billing process. Your firm may need different versions of that template for different practice areas, types of matters, or billing arrangements. One advantage of Clio Payments is that it provides users with “bill themes” in the form of law firm invoice templates that are customizable and easy to create.
Setting up your billing rates
It’s imperative for law firms to set their billing rates and decide how they will be charging clients. There will likely be a great deal of variation in billing rates and arrangements, depending on different practice areas and types of client relationships. While billable hours may be the standard billing method, other options such as flat fees and contingency fees may better serve your firm and its clients under certain circumstances. With Clio Payments, your firm can easily create customized billing plans based on alternative billing arrangements.
Tracking your time
Another critical element for an efficient billing process is the ability to easily track your time and record your activities. The best practices are to log time as soon as activities are completed. In addition, clearly describe activities so both you and your client know what has been done.
Clio Manage includes extensive time tracking features that allow users to account for all their activities. Time entries can be added directly from a variety of sources, including calendar events, tasks, documents, and even your phone. You can also record time spent in real-time and instantly add time entries for communication via email.
Approving a draft bill
The next step in the billing workflow is to create and approve a draft bill for your firm’s services. Many lawyers bill at the end of the legal matter or on a periodic basis, such as monthly. The draft bill must then be reviewed by the appropriate attorney or staff member and revised as necessary. This could involve removing entries, reducing time amounts, or editing descriptions. With Clio Payments, it’s easy to review and approve bills—even multiple bills at once.
Sending law firm invoices to clients
After reviewing, approving, and finalizing a bill, it must then be sent to the client. The traditional methods of sending law firm invoices to clients are by mail or email. Mail delivery has the obvious drawback of taking more time and not allowing for confirmation of receipt by the client. But even email delivery of invoices can involve a lot of administrative time if it involves manual processes.
Legal billing technology can greatly streamline invoice transmission. With Clio Payments, your firm can send bills electronically using Clio’s secure client portal. This saves your staff the trouble of searching for email addresses or physical addresses. Sending the bill on Clio Payments is no more difficult than clicking “Send.”
Once the invoices are sent, your firm must also be able to manage and track those invoices. Clio Payments is able to generate financial reports which give you a real-time view of any outstanding client balances. One example is Clio’s Invoice Payments Report, which provides an overview of all outstanding bills with details such as payments made, refunds, overpayments, and the legal professionals responsible for specific line items.
Getting paid for your work
Finally, you need payment for your work. In the modern digital era, it will serve your firm well to accept payment in a variety of ways, specifically using online payments. Many clients will prefer flexible payment plans in order to pay their bills in full. And even better is if clients can make their online payments in different forms, such as credit, debit, or eCheck. A simple step like accepting credit card payments can not only get your firm paid faster, it can improve client service by ensuring clients get what they want.
Clio Payments can help clients pay their bills easily with the methods they prefer. Customizable payment plans can allow clients to pay large bills in small, manageable amounts on a pre-scheduled basis. Payments can be made by simply clicking Pay Now buttons in electronic bills. In addition, clients can make payments over the phone, via secure links embedded in emails, or even with QR codes. Clio Payments allows clients to pay in the wide variety of ways they are accustomed to outside the legal industry. Clio Payments will also send automated payment reminders.
Streamlining your invoicing with Clio Payments
All of these innovations will better serve your firm’s bottom line. Attorney Jodi Donato summarizes the benefits she has received from implementing Clio Payments:
“My accounts receivable is the lowest it has ever been in my 27 years of practice, and I haven’t had to institute collections actions against any clients this year.”
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Law firm invoices made easy with Clio Payments
Legal billing comes with many challenges. These challenges often stem from the time-consuming nature of invoicing and traditional billing methods. The use of invoice templates can improve your firm’s billing system, but even more effective is the use of those templates with the right legal billing technology. Clio Payments streamlines every aspect of the billing process, all the way from recording time to ultimately receiving payment.
We published this blog post in August 2022. Last updated: .