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6 Billing Tips Solo and Small Law Firms Can Steal from Larger Firms
If you operate a solo or small legal practice, you know that your business model must account for the size of your firm. This can include positive considerations: Less overhead! More flexibility! But there are also less positive ones: Running a business yourself is a lot of work.
One thing law firms of all sizes have in common? The need to run billing every month.
However, as a small or solo law firm with limited resources, the last thing you want to sink potential billable hours into is administrative tasks and paperwork.
Except, here’s a secret you can steal from larger businesses: billing and invoicing don’t have to be a time-intensive manual process. You can use legal practice management technology to transform your process, eliminating pain points. This way, while you may not be able to sit back and relax (you do run a small business, after all!), you can spend more of your time focusing on case matters.
But it’s one thing to say “go forth and do this thing!” and another to show, step by step, how to make a process better. Let’s walk through six ways you can improve your billing process with the right tools at your disposal.
1. Stop losing money because of lost time
You don’t have to record your time on sticky notes, or a notebook, or a running spreadsheet. These aren’t the most accurate systems because:
- If you wait until the end of the day (or even the end of the week) to record billable hours, you could lose up to 25% of your billable hours through inaccurate records.
- When you record your time outside of your billing system, you then have to take additional steps to reconcile your time records and manually add them to each client’s invoice.
Automated time tracking provides a neat solution to this ongoing struggle, though. With automated time tracking, legal staff can track their time as they work, switch between client codes, and pause for breaks without missing a beat. You can then convert this data into invoices with a few clicks, review them for accuracy, and then get back to your billable work.
2. Offer alternative fee arrangements
Not every fee arrangement is going to be suitable for every type of client. Depending on the case matter and type, clients might benefit from hourly, contingency, flat fees, or scaling fee rates.
Offering different fee structures allows you to serve more clients in the ways that work for them, and it may even improve your client retention and increase your cash flow. But profitably managing alternative fee structures means strategically applying them in the first place.
To begin, analyze matter budgets. Not all legal work is suited for alternative fee structures. It’s also important to set clear payment terms in place for alternative fee arrangements and communicate them clearly with clients.
Demystifying the Billable Hour: How to Right-Size Your Rates
With prices rising so much over the last year (global inflation is forecasted at 8.8% in 2022), it’s the right time to look at your current rates and see if you’re charging enough to remain profitable.
3. Use an integrated billing and accounting system
When you’re short on time, the last thing you need is two systems that don’t talk to each other. When two different systems of record don’t integrate, you end up spending a lot of time transferring information between them.
On the other hand, when your systems are integrated, they’re designed to work together to make things easier for the user. And this applies to your billing and accounting system!
Take Rocket Matter’s billing and accounting, for example. The billing and accounting tools are integrated within its legal practice management software. This helps ensure accuracy for sensitive client data, makes it easy to track time, and enables accurate, detailed reporting that gives you information you can use to improve operations at your firm.
4. Build habitual, consistent billing practices
The more habitual a process is, the less effort it requires, and the less we have to think about it. A consistent billing practice helps not only your firm, but also your clients.
For your firm, consistent billing practices forge an optimized billing system where it’s easy to identify pain points and client bills take less time to process. For your clients, consistent billing practices let them anticipate your invoices and get in the habit of paying them upon receipt.
5. Use electronic billing
We cannot overstate this enough: electronic billing is so expected by clients that if you don’t have online payment options, your firm will seem like a bit of a dinosaur (albeit, a dinosaur that’s great at resolving legal matters).
The vast majority of people expect online payments in part because it’s a convenient option. With electronic billing and online payments, clients can keep their cards on file and pay invoices from their laptops or mobile devices. You can even set up recurring payments for your clients when the fee structure allows it, so clients don’t have to think about payment at all.
For your law firm, electronic billing also means faster payments. Electronic billing makes it much easier to process client invoices. No more printing out invoices and mailing them through the post office. It can shorten the billing process by hours each month. As an added bonus, when your client pays their invoice online, you can have that money in your account in as little as 12 hours.
6. Review reports to work through pain points
The more information you have, the easier it is to make strategic decisions that benefit your legal practice in the long run.
Regular reports are an excellent way to identify potential pain points, such as:
- Are clients using a specific fee arrangement consistently behind on payments?
- Are you spending too much time on non-billable admin tasks?
- Is your team expensing too much in one category?
- Is one case type requiring more billable hours than anticipated?
- These questions can start productive conversations that lead to a more profitable firm. With customizable and regular reporting features, legal billing software can give you the answers you need to help your firm succeed.
Level up your billing process with Rocket Matter
Rocket Matter’s comprehensive legal practice management software includes billing features to help you run your business with optimum efficiency. Whether you’re a small law firm or a solo practice, Rocket Matter has the solutions you need to level up your billing process.
Schedule a free demo to learn more!
Demystifying the Billable Hour: How to Right-Size Your Rates
With prices rising so much over the last year (global inflation is forecasted at 8.8% in 2022), it’s the right time to look at your current rates and see if you’re charging enough to remain profitable.
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