Allison Lemasters

7 Tactful Strategies for Justifying an Attorney Rate Increase to Clients

September 12, 2024 By Allison Lemasters Leave a Comment

Raising your rates can feel like walking a tightrope. On one hand, you want to be fairly compensated for your work. On the other, you don’t want clients to balk at the idea of paying more.

So, how do you handle this? It starts with communication and a strategy that shows your value clearly. Let’s look at a some averages on hourly rates to see if a rate increase is appropriate along with a few ways you can approach this conversation.

What Do Top Lawyers Bill per Hour?

When it comes to billing rates, Washington, D.C., leads the pack. According to a recent law firm billing rates survey by the National Association of Legal Fee Analysis, D.C. is home to the highest litigation billing rates in the country. A quarter of litigators in the nation’s capital report billing between $951 and $1,300 per hour, with a small but notable number charging even more. The survey, which included responses from over 2,000 attorneys in D.C., showed that 97 attorneys charge more than $1,300 per hour.

In comparison, what is the hourly rate for a lawyer in California, another big legal market? San Francisco, which ranked second, had only 13% of attorneys in that top tier of billing rates. The difference between the two cities highlights D.C.’s dominance in litigation, driven by the high concentration of major law firms and increasing associate salaries. Billing rates in D.C. are expected to continue rising, with firms in both the U.S. and U.K. anticipating increases in the next year.

While these elite rates are impressive, attorneys outside major markets should assess their own circumstances carefully. When asking, “What is a reasonable fee for me to charge?” you’ll need to consider regional factors, such as client demand, practice area, competition, and the average rate for your area.

What Is the Average Lawyer Cost per Hour?

According to that same survey by the National Association of Legal Fee Analysis, the national average for attorney billing rates in 2023 ranged from $300 to $500 per hour for many common legal services, such as general civil litigation and family law. However, in more specialized fields like intellectual property, corporate law, or complex litigation, rates can be significantly higher, often exceeding $800 per hour. Attorneys in smaller markets or less populated areas, like the Midwest or Southeast, tend to charge lower rates, usually between $200 and $400 per hour.

Another method you can use to determine an appropriate hourly rate is by using legal practice management software like Bill4Time. Bill4Time’s detailed reporting features can give you insight into your billing practices, profitability, and time spent on cases. By analyzing time-tracking reports and revenue data, you can assess if your current rates cover costs and reflect the value they’re providing. For instance, you can review time spent on cases versus amounts billed, factoring in write-downs or discounts, to determine if your rates need to be adjusted.

Once you’ve determined an hourly rate, and it happens to be higher than what you’re charging, it’s now time to consider how you will inform your clients of the rate increase.

How Do I Inform Clients of an Attorney Rate Increase?

Overall, clients are more likely to accept an hourly rate increase if they feel the increase is justified and communicated with care. Here are some effective strategies for approaching the conversation:

Advance Notice: Give clients ample time to adjust. Inform them well before the increase takes effect, ideally at least 30 to 60 days in advance, so they have time to process the change, ask questions, and budget accordingly.
Explain the Reason: Be transparent about why rates are going up. Whether it’s due to rising operational costs, increased demand, or the growing complexity of legal matters, clients appreciate understanding the reasoning behind the decision.
Highlight the Value: Emphasize the benefits and value the client will continue to receive. If you’ve achieved significant results for the client or your services have evolved, this is a good opportunity to remind them of the quality and expertise they’re paying for.
Personalize the Message: Avoid sending a generic notice. Personalized emails or letters, or even a direct conversation, show that you value the relationship. Mention specific cases or outcomes you’ve worked on together to make the client feel recognized.
Offer Options: If appropriate, consider offering phased increases or alternative payment plans, especially for long-term or high-value clients. This can soften the impact of the rate change.
Communicate with Confidence: Avoid apologizing for the increase. Instead, present it confidently, focusing on the value and service you provide, and assure clients that they are still receiving top-notch legal representation.
Address Concerns Directly: Be prepared to handle any concerns or pushback. Offer to discuss the increase and explain why it’s necessary, and reinforce the positive aspects of continuing the relationship.

These tactics help to maintain trust while communicating important changes clearly and professionally.

Attorney Rate Increase Letter Sample

Below is a personalized sample letter that ensures your clients understand the reasoning behind the change while emphasizing the value they continue to receive. Take this template as a starting point and adjust it according to your firm’s needs:

Dear [Client’s Name],

I hope you’re doing well. It’s been a privilege working with you on [specific matter or case type], and I truly value the trust you’ve placed in us to handle your legal needs.

As things have progressed, and as the demands of [specific case type or area of law] continue to grow, we’ve taken steps to stay ahead of the curve. To keep providing the level of service and attention to detail you’ve come to expect, we’re updating our rates. Starting on [effective date, at least 30-60 days in advance], our hourly rate will increase from [current rate] to [new rate]. This update allows us to continue dedicating the resources necessary to meet the evolving complexities of your legal matters.

I’ve always appreciated how smoothly we’ve worked together, especially on [briefly mention a positive outcome or collaboration]. Those results are a direct reflection of our shared commitment to achieving the best possible outcomes, and we’re excited to continue that momentum.

If you have any questions about the new rates or would like to explore other options such as [payment plans, phased increases, etc.], please don’t hesitate to reach out. I truly value our partnership, and I look forward to continuing to provide the support you need.

Best regards,

[Your Name, Firm, and Contact Information]

Make Rate Adjustments Easier with Bill4Time

Figuring out when to raise your rates can feel uncertain, but it helps to have clear data. Bill4Time’s reporting features allow you to review your billable hours, case details, and revenue trends to see if your current rates reflect the work you’re putting in. It’s a practical way to decide if an increase makes sense based on what’s actually happening in your practice.

Wondering if Bill4Time is the right fit for your practice? Sign up for a demo or free trial and see how it simplifies billing, rate decisions, and so much more.

5 File Tree Structure Templates For Law Firms

August 28, 2024 By Allison Lemasters 1 Comment

Finding documents shouldn’t feel like searching for a needle in a haystack. A solid file tree structure can make all the difference in keeping a law firm organized and efficient. When you know exactly where to look, you save time and reduce stress — no more digging through endless folders or wondering where the latest draft ended up.

No matter your area of practice, having a set way to organize your files is non-negotiable. Let’s explore some file tree templates tailored to different practice areas to help you find a system that fits your needs.

The Real Impact of a Strong Paperless Law Office File Structure

Dealing with a cluttered file system is costly. Workers spend over 11 hours each week sorting out document issues, which translates to nearly $20,000 per employee in lost productivity every year. This disorganization cuts a firm’s overall productivity by more than 20%.

How do you avoid this? It starts with having solid file tree structures for electronic files and folders. When your team knows where to find everything, there’s no time lost searching for documents. From figuring out how to organize discovery documents to keeping papers from clients in order, clear structure and organized folders mean everyone can easily access the files they need without confusion.

How to Make a File Tree Structure for Law Firms Template

If your firm has been using paper files and already follows organizational best practices, then the solution is straightforward: continue as you were. Organize your digital files just like you did with paper — maintaining the same system that worked before you went paperless.

But what if you’re new to this, or if your firm didn’t have a strong organizational system to begin with? Is there a way to create a file tree structure that will work best for your needs? Absolutely, and that’s where templates come in.

Using these simple templates can help you organize your folders and files effectively. The specific naming conventions you use aren’t as important as finding a system that works for you and consistently sticking with it.

If you’re not sure where to start, below are a few examples of how you can set up a paperless law office file structure template for various areas of law. You can create a set of empty folders with these labels, save the set as a template, and then copy and paste it into any new client files you open.

Template #1: Family Law

Case Notes
Correspondence
Drafts
Pleadings
Discovery
- Records from Client
- Records from Opposing Party
Financial and Property Docs
Child Support
Guardian Ad Litem
Billing

Template #2: Personal Injury

Case Notes
Correspondence
Insurance Information
- PIP or Medpay
- Medicaid
- Medicare
- Liens
- Insurance Policies
- Insurance Adjuster Communication
Medical Information
- Records Requests and Authorizations
- Medical Records
- Billing Records
Drafts
Pleadings
Discovery
- Request and Response – Us to Them
- Request and Response – Them to Us
Accident Reports
Witness Statements
Settlement Documents
- Settlement Offers
- Settlement Agreements
Accounting
- Settlement Disbursements
- Litigation Costs

Template #3: Criminal Defense

Case Notes
Correspondence
Court Documents
- Drafts
- Pleadings
- Orders
Discovery and Evidence
- Police Reports
- Witness Statements
- Forensic Reports
- Photographs and Videos
- Other Evidence
Legal Research
- Statutes
- Case Law
Trial Prep
- Jury Instructions
- Trial Exhibits
- Voir Dire
Post-Conviction
- Appeals
- Sentencing Documents
Accounting
- Legal Fees
- Court Costs

Template #4: Estate Planning

Case Notes
Correspondence
Beneficiary Information
Estate Planning Documents
- Draft Documents
- Executed Documents
Asset Documentation
- Property Deeds
- Bank Account Information
- Investment Portfolios
- Retirement Accounts
- Business Ownership Documents
Tax Documents
Legal Research
Accounting
- Billing Records
- Invoices
- Payment Receipts
Miscellaneous

Template #5: A General Template

Here’s a general template you can customize on an as-needed basis.

Case Notes
Correspondence
Documents from Client
Documents from Third Parties
Witness Statements and Exhibits
Legal Documents
- Drafts
- Pleadings
- Orders
Discovery
- Interrogatories
- Requests for Production
- Admissions
- Deposition Transcripts
Experts
- Expert Reports
- Expert Correspondence
Trial Preparation
- Trial Exhibits
- Trial Briefs
- Jury Instructions
Accounting
- Retainer Agreements
- Billing and Invoices
- Expenses

Creating a file structure that suits your firm’s specific needs is the most important part of this process. While these templates offer a starting point, you should feel free to adjust them to better fit your practice. Whether you’re handling family law, personal injury, or estate planning cases, having a consistent organizational system helps ensure that all documents are easy to find and manage.

Once you’ve explored legal filing system ideas and nailed down a solution, the next step is setting standards for naming files.

Top Mistakes in Naming Conventions for Electronic Files and Folders

First, let’s look at the don’ts. You’ll want to avoid making these mistakes with folder/file names as it makes things more difficult to process, find, and work with your documents and files in the long term.

Be Specific with File Names. Make sure file names are clear about what they contain. A good file name should instantly tell you what to expect inside. Use client names, case numbers, dates, or document types. For example, “24-08-26_Smith_Motion_to_Dismiss” tells you it’s a Motion to Dismiss for a client named Smith, created on August 26, 2024.
Avoid Long File Names. Shorter is better, but don’t be vague. Find a balance that gives enough information without being a mouthful. “24-02-15_ContractReviewFinal” is better than “Contract_Review_For_Smith_Revised_2024_Final_Version_Approved_02_15_24.pdf.”
Don’t Use Special Characters. Stick to letters, numbers, underscores, and dashes. Characters like &, %, and # can cause problems when you’re sharing files or using different software.
Skip the Spaces. Use underscores or dashes instead of spaces. Spaces can create problems, especially in scripts or when using different software.
Standardize Date Formats. Dates help keep things organized. Use the same format every time, like “24-08-26.” This way, files stay in order, and you can see the timeline at a glance.
Label Versions Clearly. If there are multiple versions of a document, label them. “v1,” “v2,” or use dates. This helps avoid confusion about which is the most recent file.
Keep Sensitive Info Out of File Names. Don’t put private details in the file names. Use internal codes or client IDs instead.
Get Everyone on Board. Make sure the whole team knows the naming rules and follows them. Have a quick guide handy and include it in new hire training. It’s easier when everyone is on the same page.

File Naming Conventions Examples

There is a wide variety of naming conventions you can follow. Here’s a simple one you can use/customize for your firm.

Date | Client | Matter | Abbreviation Designating the Item | Description

As an example, the above might look like: 240823_Gonzalez_Litigation_MOT_Dismiss

Breaking this down:

Date: August 23, 2024 (formatted as 240823)
Client: Gonzalez
Matter: Litigation
Abbreviation: MOT (Motion)
Description: A motion to dismiss the case

This naming convention is clear, concise, and provides detailed information at a glance. It makes documents easy to search and understand, even for those not familiar with the specific matter.

However, it’s important to develop your own file naming structure that suits your firm’s needs. Having a consistent and clear naming system helps you quickly identify the who, what, when, and why of each file, which is incredibly important for efficient document management and minimizing the risk of financial loss due to poor organization.

How to Organize Paperless Client Files with Bill4Time

Managing client files can be so time-consuming, but Bill4Time’s document management features are designed to simplify that process. With the ability to store unlimited documents and create custom folder structures, you can keep everything organized and easy to access. Plus, Bill4Time’s powerful search function helps you quickly find any file you need, so you spend less time searching and more time on the things that matter most.

If organizing your documents feels like a never-ending task, give Bill4Time a try. Check out a demo or free trial to see how it can help ease the burden of document management and make your workday smoother.

Hard Costs vs. Soft Costs: Everything Law Firms Should Know

July 19, 2024 By Allison Lemasters Leave a Comment

As an attorney, you encounter a variety of expenses while managing cases and providing services to clients. These expenses, charged on behalf of your clients, must be accurately accounted for in your firm’s books.

You’ll deal with two types of expenses: hard costs and soft costs. Knowing the distinction between them and how to handle each in your accounting is crucial. Let’s break it down.

What Are Hard Costs and Soft Costs?

All of your law firm’s expenses are broken down into two categories: hard costs and soft costs.

Hard costs, also known as direct costs, are those expenses your firm incurs on behalf of a client that require direct payment to a vendor. These costs are tangible and easily traceable to a specific client or case. Typically, you pay these upfront and later seek reimbursement from your clients. They are classified as law practice expenses and deducted from your firm’s income.

Soft costs, or indirect costs, differ in that they do not require direct payment to a vendor and often cover more general, operational expenses. These costs can be more diffuse and are often part of the daily functioning of your firm. Some firms charge these costs to clients, while others absorb them as the necessary costs of doing business.

Examples of Hard and Soft Costs

If your firm pays a court filing fee directly for a client case, that’s a hard cost. Other hard costs may include:

Court filing fees
Court reporter fees
Mediation fees
Hearing transcript fees
Expert witness fees
Travel expenses
Medical records fees
Subpoena fees

If your firm charges for the photocopies you make using your own office equipment, you incurred costs but didn’t have to pay a vendor. This scenario would be considered a soft cost. Other soft costs may include:

Photocopying
Telephone services
Internet services
Printing costs
Legal research material
Postage and shipping
Office supplies
Software licenses

To further clarify how to categorize each, let’s examine a practical scenario. Think about the last time you paid a filing fee to the court for a client’s case. This expense is a hard cost because it involves a direct payment to a specific vendor (the court). You would record this payment as an accounts receivable, billing the client for reimbursement.

In contrast, consider the scenario where your firm uses its office photocopier to make copies of documents for a client’s case. You incur costs (such as toner and paper) but do not make a direct payment to an outside vendor for each copy. This is a soft cost. While you might bill the client a nominal fee per copy, the cost is generally part of your firm’s overhead.

Person using laptop with Bill4Time legal time and expense reporting software feature screens

Resources to Track Hard Costs and Soft Costs at Law Firms

Tracking your law firm’s expenses accurately is crucial for maintaining financial health and ensuring client transparency. The right legal time and expense software can make this task seamless, allowing you to keep detailed records and avoid any financial discrepancies. Let’s look at a few software features that streamline this process for legal professionals:

1. Time and Expense Management

Time and expense tracking is the foundation of accurate accounting in any law firm. Using software like Bill4Time, you can capture your time in real-time on any device, which means no more relying on outdated methods like spreadsheets or notepads. This level of precision ensures that every minute you spend working on a client’s case is accounted for, preventing lost billable hours and making sure you’re compensated for all your efforts.

Now, here’s the trick: with Bill4Time, you can meticulously track both hard and soft costs. These might seem minor, but they add up. With detailed tracking, you can document and account for even those small, often overlooked expenses. This way, capturing transactions incurred on behalf of a client for reimbursement is incredibly easy.

2. Custom Reporting

To truly understand your firm’s financial health, you need more than just basic accounting data. Bill4Time’s custom reporting feature provides a comprehensive view of your firm’s financial activities. Whether you need to review your overall accounting activity or look into specifics like payment history, expenses, or collections by client or matter, these reports help you identify gaps and issues.

With custom reporting, you can also see where your firm is spending the most money or which clients have outstanding payments. This insight allows you to make informed financial decisions and improve your firm’s profitability.

3. Invoice Templates

Clear communication with clients about charges is essential to avoid confusion and maintain trust. Standardizing your legal invoicing process with Bill4Time helps you generate transparent invoices quickly and effectively. This feature speeds up the invoicing process and ensures consistency across your firm.

Having a well-defined invoice creation process as part of your firm’s legal billing policy is crucial. With Bill4Time, you can create custom invoice templates tailored to your firm’s needs. These templates reduce the time it takes to generate invoices and ensure that each invoice clearly communicates hard and soft costs. Providing clients with detailed, easy-to-understand invoices reduces the likelihood of disputes and improves client satisfaction.

Importance of Tracking Hard Costs and Soft Costs

Understanding your firm’s financial health hinges on keeping track of both hard and soft costs. Here’s why it’s so important and how you can do it effectively.

Accurate Finances

Hard and soft costs should be tracked differently for accounting purposes. By categorizing these expenses correctly, you ensure that your financial records are precise. This accuracy helps in billing clients for the appropriate reimbursements and understanding the true cost of running your practice.

Billing Accuracy and Happy Clients

When you bill clients for costs your firm has incurred, it’s essential they understand what these costs are and why they were charged. Clear, detailed invoices that differentiate between hard and soft costs help clients see exactly what they’re paying for, which boosts client retention and minimizes conflicts over charges.

Compliance

Compliance with legal billing standards is non-negotiable. Legal billing must align with the American Bar Association, state bar guidelines, and Interest on Lawyers’ Trust Accounts (IOLTA) regulations. Accurate billing and expense tracking are mandatory to meet these standards. By keeping meticulous records of your hard and soft costs, you ensure your firm stays compliant with all necessary regulations, avoiding potential legal issues.

Final Thoughts on Hard Costs vs. Soft Costs

Effective expense tracking is key to running a profitable law firm. Managing hard and soft costs efficiently not only improves your firm’s financial health but also builds trust with your clients. Software features like Bill4Time’s law firm invoicing and expense tracking make this process seamless. They help you categorize expenses accurately, bill clients transparently, and stay compliant with legal standards.

Using Bill4Time, your firm can handle the complexities of hard and soft costs with ease, ensuring that your finances are always in order and your client relationships remain strong. Someone from our Bill4Time team would be happy to show you how this works — schedule a demo to get started!

Best Practices For Communicating Legal Fees and Expenses to Clients

July 16, 2024 By Allison Lemasters Leave a Comment

Clients want transparency about fees and expenses. It’s essential for a strong client relationship, but how do you provide this information effectively?

Clear communication about fees isn’t as straightforward as it might seem. The challenge lies in the details: How much should you disclose? How frequently? In what format?

Handled well, transparent communication can foster trust and provide clients with the confidence they need in your firm.

Establishing Client Trust

Over the past two decades, the public’s trust in lawyers has fluctuated, according to Gallup’s annual poll on honesty and ethics in various professions. In 2023, only 16% of Americans rated attorneys as having very high or high standards of honesty and ethics, marking a significant decline from previous years. This is down from 21% in 2022 and a high of 22% in 2019.

honesty and ethical standards of lawyers — Source: Gallup

This perception is far from ideal. In an industry where trust is vital, being viewed as average can be a significant barrier. Clients are placing their legal matters — and often their personal lives — in your hands. They need to believe not just in your expertise but in your integrity.

Open and honest communication is key. Clients want clear answers to specific questions: Are you an expert? Do you care about your clients? Are you a good fit for their needs? Among these, one question stands out: Are your fees reasonable?

Clients seek clarity on fees and expenses, expecting detailed and timely information. This transparency reassures them that they’re getting value for their money.

How Do You Explain Fees to Clients?

Your clients have a hidden, unspoken, non-negotiable expectation: They want to feel they’re getting more value than what they’re paying for. It’s an implicit test. When they ask about fees, they’re really asking, “Are you giving me more than I’m paying you?” The answer must always be yes.

To convey this, follow these best practices for communicating legal fees:

1. Align Financial Interests

Clients want to see that your financial interests align with theirs. Be upfront about whether they are willing to pay for certain fees or if they find them unreasonable. Avoid surprises and ambiguity by clearly explaining what each fee covers and why it’s necessary. Transparency here builds trust and shows you respect their investment in your services.

2. Clarify Fee Structures

Engage your clients in a detailed discussion about the different fee structures available, from flat fees to hourly billing. By discussing these options and their implications, you help clients choose the arrangement that best suits their needs and budget. Making their expectations explicit and realistic at the outset avoids misunderstandings and sets a clear financial foundation.

3. Demonstrate Value

Show clients a detailed breakdown of fees and services to demonstrate the value you’re providing. Outline your fees and expenses clearly and completely. Highlighting the specific benefits and outcomes they can expect from your services will reassure them that their money is well spent.

More specifically, here’s a few ways you can show clients your worth:

During your first meeting, provide a comprehensive overview of the anticipated services and associated costs. Outline the expected fees for each step and discuss how these services protect the client from legal pitfalls.
Throughout the case, keep clients informed with regular updates. Include a summary of hours spent and tasks completed, so clients see the ongoing effort and expertise involved.
On invoices, provide detailed breakdowns of all services and expenses. Include a description of each service and its benefits. For instance, instead of “Appeared at preliminary hearing,” you might note, “Represented client at preliminary hearing to argue for dismissal of unfounded claims.”
At the conclusion of a case, provide a summary report that outlines all the services performed, the outcomes achieved, and how these align with the client’s goals.

By integrating these methods into your practice, you clearly demonstrate the value you provide, ensuring clients understand and appreciate the expertise and effort behind each fee.

4. Track Everything

Meticulous tracking of time and expenses is fundamental to transparent and accurate billing. Every timekeeping employee should rigorously record their time, regardless of the fee arrangement. To do this at your law firm, implement these practices:

Detailed time tracking: Implement a robust time-tracking system where your team records every task with precision. Each entry should specify the task, time spent, and its relevance to the client’s case.
Expense tracking: Record all expenses meticulously, from filing fees and court costs to travel and expert witness fees. Use software that allows you to categorize and itemize each expense. Categorizing these helps clients see exactly where their money is going.
Document write-offs/write-downs: Document write-offs and write-downs clearly. If you decide not to charge for certain services or reduce a fee, record the reason and communicate this to the client. Explaining such adjustments builds trust and shows clients you are fair and considerate.
Time tracking technology: It’s really difficult to track all of these moving parts without legal time tracking software. Bill4Time, for example, provides a comprehensive solution for managing time and expenses. It allows your team to log hours and expenses in real time, categorize entries, and generate detailed reports. See how it works by scheduling a free demo.

5. Set Policies and Procedures

Create a comprehensive list of fee and expense types and implement a “cost capture” policy. Clarify billing for soft costs (e.g., copies, scans, postage) and hard costs (e.g., travel, lodging, meals). Define how your firm handles unexpected variances, discounts, and write-downs. Clear policies ensure consistent and fair billing practices.

Bill4Time can significantly aid in implementing these policies with its comprehensive feature set. For instance, Bill4Time’s expense tracking feature allows you to categorize expenses as soft or hard costs directly within the system. You can also pre-set categories for common expenses, such as travel or photocopying, and assign them to specific client matters automatically.

6. Add Details to Agreements

Your retainer/fee agreement should explicitly outline all fees, expenses, and firm policies. Include specific details about hourly rates, fixed fees, retainer requirements, and any potential additional costs.

Additionally, clearly define what services are included and any that may incur additional charges. This protects both you and the client by setting clear expectations. For instance, specify that court filing fees, travel expenses for depositions, and expert witness fees are additional costs that the client must cover.

A well-drafted agreement serves as a reference point in case of any disagreements. It ensures that both parties understand the financial obligations and can refer back to the document if any disputes arise.

7. Preemptively Deliver News About Unexpected Costs

If there are significant deviations from the budget or unexpected expenses, communicate this immediately. Pick up the phone or send an email to explain the situation before sending the invoice. Provide a detailed explanation of the unexpected costs, including why they arose and their impact on the overall budget.

Add this explanation to the invoice as well, ensuring that all involved parties are aware of the changes. For example, if an unforeseen court motion requires additional hours, detail this on the invoice with a note explaining the necessity.

8. Be Descriptive on Invoices

Ensure invoices are detailed, including who to pay, how much, due dates, and a breakdown of hours and fees. List each service provided, the time spent, and the corresponding charge. Highlight what you did versus what you provided. For instance, instead of just listing “Research,” specify “Researched case law precedents for client’s litigation.”

Clear and detailed invoices help clients understand what they are paying for and reduce the likelihood of disputes. This level of detail reassures clients that they are being billed fairly and accurately.

Communicating Fees to Earn Your Client’s Trust

When it comes to money, clients want a full accounting of the fees and expenses associated with their matters. Clients need to know if your fees are reasonable and justified, and they want to see a clear breakdown of every cost. This boils down to one critical question: “Are you giving me more than I’m paying you?” The answer should always be a resounding yes.

This is where effective time and expense tracking comes into play. By using software like Bill4Time, you can effortlessly manage and communicate your billing processes. It helps you track billable hours, categorize expenses, and generate detailed, itemized invoices that clients appreciate. With such clarity and transparency, you build trust and confidence in your services. So why not give it a try? Your clients—and your bottom line—will thank you.

What Do Lawyers Use to Track Time?

July 3, 2024 By Allison Lemasters Leave a Comment

Legal time tracking software is the go-to method for lawyers tracking billable hours. This time tracking software works with the nuances of law practice, offering features such as multiple timers, mobile-friendliness, simplified invoice creation, and much more.

Time tracking software in 2024 is indispensable, especially for the demanding nature of legal work. If you’re an attorney searching for a simpler way to do billing, an attorney time tracking template, or even just ways to work more efficiently, you should be looking into legal time tracking software. Keep reading to learn about this helpful software, how it eases time tracking, and what features make for the best lawyer time tracking app.

How Do Lawyers Track Their Time?

More and more lawyers are using legal time tracking software to track their time. Historically, lawyers also used handwritten logs, spreadsheets, or even sticky notes, but the industry is quickly migrating towards digital as the standard. The American Bar Association reported that by the end of 2022, the majority of law firms (63%) were already using legal software of some kind — a number that has been steadily climbing since 2019.

Time tracking software provides a more convenient, accurate, and manageable method of accounting for billable hours. The best lawyer time tracking software also offers mobile-friendly interfaces, so attorneys can still track time effectively when they’re out of the office.

Regardless of the method a lawyer or firm uses to track time, some best practices are:

Enter your time immediately. The sooner you capture time spent, the less likely you are to under or overestimate the hours. Adhering to this habit is one of the main benefits digital tracking provides: a way to quickly enter billable time into a single source of truth.

Optimize your billing descriptions for client understanding. If clients can clearly see what you are billing for and why, they’re more likely to be satisfied with your work. Clients appreciate high attention to detail around billing, as it makes them see you are being intentional with the time they are paying you for.

Offer multiple payment options. The easier it is for you to be paid, the more timely your clients’ payments will be — yet another aspect that digital time tracking software helps with. For example, software like Bill4Time supports multiple secure payment methods, making it easy for clients to pay their invoices safely.

Regularly review and audit your time entries. Make it a habit to review your time entries weekly to catch any mistakes or omissions. This helps maintain accuracy and ensures you are billing correctly for all your work. Using software like Bill4Time can simplify this process by providing detailed reports and summaries for easy review.

Looking for more tips on how to track your time? Check out this informational article on billable hours best practices, from automating your billing to optimizing the timing of your invoices.

How Are Billable Hours Tracked With Software?

Several features of law firm software aid the process of time tracking, such as:

Timers: Use multiple timers for each task, allowing simple and accurate tracking. You can also view daily and weekly totals for billable time, giving you a clear picture of your work.
Time and Expense Sorting: This feature lets lawyers search for billed time using filters like entry date, client name, and more. It simplifies finding specific entries and helps with accurate billing.
Task Categorization: Organize different billable tasks for better accounting and client invoicing. This feature helps keep your billing clear and detailed.

Ultimately, time tracking software organizes, streamlines, and consolidates the process of tracking billable hours. It takes less time to enter and is simpler to generate detailed, easy-to-understand invoices for clients. Plus, your clients can pay their invoices through secure online portals tailored specifically for them.

What App Do Lawyers Use to Track Time?

Lawyers use time tracking apps specifically designed for capturing billable hours. Mobile friendliness is also critical for time tracking in the practice of law, as many attorneys have demanding schedules requiring them to be on the move constantly. Instead of manually recording hours upon returning to the office, a time tracking app allows you to easily log billable hours, whether in the office or the courtroom.

An app that is convenient, mobile-friendly, and tailored to the practice of law is best for lawyer time entry. Some examples of go-to software include Bill4Time, a software designed for lawyers to ease the process of tracking billable hours.

Bill4Time offers many features to help law practices run more efficiently, from time tracking to invoice creation and even payment portals. Its mobile app makes it easier for attorneys on the go to track their billable time as they move between cases, clients, and various locations.

What Is the App That Tracks Billable Time?

For quality software that tracks billable time in a mobile-friendly interface, Bill4Time is the right call. With simplified time tracking, at-the-ready invoice templates, and secure payment portals, Bill4Time has everything you need to streamline your billing process.

Not only will your firm run more smoothly, but your clients will appreciate the detailed, thorough invoices Bill4Time helps you generate — a process that takes less time, effort, and stress from you. Best of all, you can do it all on the go, from any device!

If you’re a lawyer who’s ready to make time tracking a breeze, it’s time for Bill4Time. Try it out for free or schedule a free demo and see firsthand the difference it makes for your practice.

How Do I Track My Billable Hours?

July 1, 2024 By Allison Lemasters Leave a Comment

Lawyers track billable hours in a variety of ways, some more effective than others. The two most common methods for tracking billable hours are:

1. Legal Software: Many attorneys rely on specialized legal time tracking software with built-in timers and task-tracking capabilities. This technology allows for accurate logging of hours spent on client-specific activities. Each entry is tied directly to client cases, making billing and financial tracking seamless.

2. Manual Timekeeping: Some practitioners still prefer traditional methods like spreadsheets or handwritten logs to record their time. For those who prefer manual timekeeping, keeping billable hours vs. actual hours separate demands high discipline to ensure accuracy.

Choosing the right method can make a big difference. To help you decide, let’s explore what billable hours involve and how you can manage them effectively.

What Is an Example of a Billable Hour?

A billable hour is time spent on tasks that directly benefit a client. For example, when you are drafting a legal document, that’s a billable hour. Meeting with clients or opposing counsel also counts. These tasks involve using your expertise to move a client’s case forward.

Other examples of billable hours include:

Researching case law
Preparing for trial
Reviewing a case file
Attending court hearings
Taking depositions
Consulting with experts
Attending mediation

It’s important to separate billable hours from non-billable ones. Time spent on administrative work, like managing your firm’s website or attending internal meetings, isn’t billable. The key is to keep your billing clear and honest. Billing accurately builds trust with your clients and ensures you’re compensated fairly for your work.

Using proper timekeeping practices helps you log these hours accurately. Legal software is particularly beneficial in tracking your time efficiently, reducing the risk of errors that occur with manual logs. Whatever method you choose, make sure you track your time in a way that works best for you. This way, you won’t miss out on billing for any work done.

For additional guidance, you can use UTBMS (Uniform Task-Based Management System) codes to determine what qualifies as a billable hour. These codes standardize legal work, billing, and categorization, making it easier to track and bill accurately. You can find more information on UTBMS codes here.

How Do You Account for Billable Hours on the Go?

Tracking time efficiently and accurately has always been challenging, but the rise of remote and hybrid work has added complexity. Modern lawyers now work on the go and in different locations, making it more difficult to track hours in real-time.

However, mobile apps and digital platforms designed for lawyer time tracking can help with logging hours in real-time, no matter where you’re working.

For example, Bill4Time offers sophisticated timekeeping tools to capture both billable and non-billable hours in real time from any device with an internet connection. With the accompanying mobile app, you can easily set and stop timers, pick up where you left off, and convert appointments into time entries from any device at any time.

Though trying to figure out how to track billable hours in Excel or building a billable hours calculator in Excel might seem like viable options, they often end up being tedious and error-prone. Legal time tracking software makes things easier and more accurate, so you can rest assured your billing is correct.

How Do You Account for Billable Hours on the Go

How Do I Calculate Billable Hours?

Logging and tracking hours is only one part of the equation — you have to calculate your billable hours, too, starting with choosing an appropriate billing increment.

The standard 6-minute increment is the “sweet spot” for time, but it’s also easy to calculate. 6-minute increments are 1/10th of an hour. To calculate time, divide the time spent in minutes by 6, which is equal to 0.1 of an hour. So, for a 37-minute task, you would have six increments or 0.6 hours.

Similarly, if you use 15-minute increments – another common increment in the legal industry — you would divide the number by 15. Each time increment is 0.25 of an hour, so 45 minutes of work equals .75 hours for billing. This calculation is often second nature, since we tell time based on quarters of an hour.

Once you have your work time represented in hours, you must calculate your billable hours. Multiply the increment by your billable hours rate for billing.

For example, if you worked for an hour and 10 minutes with an hourly rate of $300, the calculation would be 1.2 x $300 = $360. The $360 total is what you’ll bill to the client for that time, plus any other hours or expenses.

Tips for Calculating Billable Hours

The billable hours process takes time to perfect. Here are some best practices to ensure accuracy and efficiency:

Understand your billable and non-billable activities, such as client meetings and case research (client case) vs. billing and invoicing (administrative).
Stay consistent with your timekeeping practices, including your billing increments and hourly rate, the tasks you bill for, and how often you bill clients. This process ensures you are transparent and builds client trust while minimizing the risk of errors.
Track your financial performance with billable and non-billable hours. Look for trends to determine what tasks are profitable for your firm, what tasks aren’t, and how you can improve efficiency and productivity.
Use time tracking software to record your billable hours accurately. Investing in professional, legal-specific time tracking software offers more capabilities and features to elevate your time tracking and billing processes.

How Can I Track My Billable Hours for Free?

While you can track your billable hours for free using basic apps, these often lack security or features specific to lawyers. Some other limitations include:

Data Loss: Inadequate security can lead to lost time entries and compromised data.
Manual Errors: Free apps can lead to manual entry mistakes, resulting in inaccurate billing.
Lack of Real-Time Tracking: Some free apps do not offer real-time tracking, making it easy to miss logging crucial billable hours.
Security Risks: Free apps often have weak security measures, risking sensitive client information.
Restrictions: Free apps may limit the number of clients or projects you can manage and might display annoying ads.
Limited Features: Even the best free time tracking app may lack essential features like advanced reporting note-taking capabilities.

A free billable hours tracker for employees at your firm might seem attractive, but free versions often have hidden costs. Security risks, missing features, and the potential for errors make them less suitable for professional use. Investing in specialized legal time tracking software can enhance your practice’s efficiency, provide peace of mind, and help you serve your clients better.

For example, you might find Bill4Time a valuable solution. It offers automatic time capture, secure data storage, and detailed reporting, making tracking and billing straightforward. Check out a free demo or start a free trial to see how it works for you.