Billing and Time Records
Billable time must be accurately recorded and done so on a daily basis. Preprinted forms are helpful, but a yellow pad works just as well. Whatever type of record you use, keep it with you at all times. Many attorneys dictate their time entries. This works well for the attorney that does a great deal of dictation.Time Slip Sample
An attorney or firm that keeps time records on a daily basis will bring in more revenue than the attorney or firm who tries to compile bill statements using only memory and a calendar. The latter option takes a great deal of time, relies on a great deal of guesswork, and will not be as accurate, leaving room for questions by the client. Answering those questions will be time consuming and difficult. Submit your time sheets or have your secretary collect your time sheets on a daily basis. Make daily entries on the computer or word processor if you use either type of equipment. If you prepare your billing manually you may want to file all of the time records in a separate section of the file. Periodically you could transcribe the handwritten notes to prepare the bill statement for review. While the computer and/or word processor definitely makes the billing process easier and more manageable, manual preparation of bill statements can be simplified if done in an organized manner.
Waiting to enter the time sheets at the end of the month is time-consuming. So instead, spend 15-30 minutes a day so that when the end of the month rolls around all you have to do is print a rough draft for the attorney's review.
Itemize your statements. Let your client know what you've been doing on his/her case. This may minimize time spent answering questions regarding why your bill is so high. Clients will be more willing to pay your bill if they can see that the amount billed is justified. This is also a good way to keep your client updated as to how the case is progressing.
Invoice & Statement Sample A
- Ask client where to send bill. Some clients do not want bills sent to their homes (domestic). Some business clients do not want employees to know what is happening in their companies.
- Always address the bill to a person instead of to a business entity
- Try to have bills arrive by the 5th of the month. Many companies pay bills once a month on the 10th, or twice a month typically on the 10th and the 25th.
- It is good idea to include a postage-paid return envelope to avoid delays simply for lack of a stamp.
- If a bill is unusually large, sending a cover letter can lessen the shock and serve as a status report.
- A sure way to antagonize a client is to charge for time spent on bill-related activities - reviewing the bill; explaining the bill; correcting the bill.
- Never send a bill if the client is unaware that anything has been done. Clients should always be kept informed by being sent copies of all correspondence and documents as work is done. At a minimum, accompany such a bill with a letter of explanation describing what has been done and why.
- Always have the billing attorney familiar with the case review the draft bill before the final goes out. The attorney, instead of the client can catch most errors or "red flags".
- If you choose on occasion to provide legal work at no charge or a reduced fee, maximize the fact that you are giving the client a discount by sending a "No Charge" bill or "Courtesy Discount" bill. This serves several purposes. It records the work that was done and when it was done, and keeps a client happy with the attorney and loyal to the firm. It is also important on a discounted bill to inform the client (even a friend or relative) of the true value of the services provided.
- Get retainers
- Follow the fee agreement. If you agreed to bill the client monthly, then do so. If you agreed not to bill the client for a six-month period, then don't bill the client until the six-month period has passed. If you are working against a retainer, send the client copies of your time sheets. Don't leave the client in the dark. Once the retainer has been exhausted there should be no question in the mind of the client as to how the money was spent.
- Be consistent with your client billing. Send statements periodically as the case progresses. Don't let the amount build up over several months and then expect the client to be happy with the large fee. People are more willing to make small, periodic payments as opposed to one or more large payments.
- Let your client know if you change your hourly rate. Even though the hourly rate is computed on the bill, make a separate notation on the bill pointing out the new rate or prepare a notice to all clients to be mailed along with the monthly bills.
- Some of the above suggestions might lessen the likelihood that you will have to sue a client for your fee. Every time an attorney sues a client for fees, the attorney invites a counterclaim for malpractice. While many of these counterclaims are not well-founded, they still must be defended (costing the attorney money and time). You should make it a rule never to sue a client for a fee. But if you must, consider the following checklist:
- Is your client able to pay the fee? If not, you will be wasting your time.
- Did you obtain a favorable result for your client? Was your client unhappy with the result and/or your services? This situation will definitely result in a counterclaim being filed.
- Have you tried to reach an agreement with your client regarding the payment of fees? Perhaps your client would be willing to make small monthly payments until the fee is paid in full. Try to be as cooperative as you can.
Invoice & Statement Sample B