Bill4Time Staff

Law firms are seeing the benefits of cloud-based solutions for better productivity, security, and cost-effectiveness. These solutions offer numerous benefits, including user-friendly features, accessibility, and automation, making the day-to-day operations of a law firm faster and more convenient. Here are the 6 advantages of cloud-based billing for lawyers.

What Is a Cloud-Based Billing or a Cloud-Based System?

A cloud-based system, also known as a cloud-based solution, cloud software, or cloud computing, is an all-encompassing term that refers to hosted services over the internet. Instead of storing information in physical documents at a physical location, cloud services bring everything to a virtual space.

The cloud can be public, which means the services are sold to anyone with internet access, or private, which is a proprietary network or data center that offers its services to a shortlist of people with limited rights and access.

For business, a cloud-based system revolutionized industries by supporting remote teams and tasks, enhancing data security, and storing vital information in a safe place where it’s unlikely to get lost, even if a device goes down or an office building suffers a disaster. Another feature is automation, which is available from certain vendors and tackles some of the day-to-day responsibilities of running a business or law firm.

1. Remote Access

Most of the world has gone digital, and businesses are realizing the benefits of hybrid and remote teams. Attorneys can now work from any location, whether they’re remote employees, out on client lunch meetings, or spending time at the courthouse. Laptops, smartphones, and tablets can be equipped with cloud-based technology that offers access to important documentation without leaving it sensitive to breach.

In addition, remote access with cloud solutions makes timekeeping more effective. Attorneys struggle with time tracking, to begin with, but it becomes more challenging when they’re out in the field. Client meetings, research, and other out-of-the-office tasks can be forgotten, leaving attorneys without hours of billable tasks. Time-tracking consumes a large portion of an attorney’s tasks, so by automating this process with a tool like Bill4Time, attorneys can keep a log of billable time with handy tools like automated timers and appointment conversion. Best of all, these tools are available on any device with an internet connection.

2. Security

One of the concerns with technology for law firms has always been security. Attorneys and law firms amass a lot of sensitive information, both for the firm and the clients, and a breach could be devastating. To combat this, law firms preferred manual entry methods and physical documents.

Cloud-based solutions are secure, however. In fact, they may be more secure than physical documentation, which is vulnerable to theft or disaster. With a cloud-based solution, the information is stored on a physical server with a secure data center that only verified individuals can access. Vendors provide security through updates and monitoring from IT teams and backup servers to protect information. If a device crashes or the law firm suffers a disaster like a flood or fire, the documents are safely stowed away on the cloud.

Bill4Time’s cloud solution uses data centers with 24/7 uninterrupted service and data security provided by third-party leaders in the industry. Data centers are also distributed geographically to mitigate the impact of disruptions to regional service. Updates and services take place in rollouts that ensure clients experience minimal downtime.

3. Low Maintenance

Maintaining physical documentation or on-premises storage solutions present challenges for law firms. Depending on the size of the firm, it may need several servers to meet its demands, taking up physical space and creating information silos.

On-premises solutions require ongoing maintenance and associated expenses, such as backup hardware, battery power, and repairs. Law firms may need to bring on an IT professional or a team to manage these tasks, cutting into the bottom line. If the system goes down, staff can’t invoice, bill, or track time effectively, losing billable hours.

Cloud-based billing solutions address all of these problems. Information is stored on distributed servers to limit disruptions and mitigate the effects of outages. Any updates or maintenance tasks are handled by the vendor, ensuring minimal downtime and eliminating the need for an in-house IT team.

4. Automation

Legal management software with cloud-based solutions offers many productivity tools and features, such as a recurring billing process, automating invoicing, due date and payment reminders, and more. This takes a lot of the strain off law firm staff, allowing them to focus on mission-critical tasks.

To streamline the process, Bill4Time’s legal management software allows law firms to create detailed, customized invoices and reports that align with the previous standards and designs. When the time-tracking system is upgraded, clients can count on continuity and consistency in the invoices that maintain their trust in the firm. The programming team does all the work and duplicates existing invoice formats and templates. In addition, invoices can be detailed with fields for custom reports, users summaries, trust account activity, and appended forms. The software also supports custom rate tables and billing data reports.

5. Simplified Auditing

Audits can be stressful, but time-tracking software simplifies the process by providing all the important details to prepare, including invoices, recurrent billings, financial reports, and payments. All account activity is recorded in one place to save time, energy, and costs.

Outside of an audit, law firms can bring up a detailed analysis of any report at any time using legal management software. This may include taxes, liabilities, and expenses, tax deductions, and more.

6. Profitability

Time-tracking, billing, and data storage are among the most important concerns for any business, especially law firms. Using an automated legal management solution with the cloud allows law firms to automate redundant tasks, track time effectively, and support remote and hybrid teams.

Cloud computing is the future of law firms and businesses in a variety of industries. Specific practice management solutions provide cloud-based data storage and reporting with secure networks and servers, automatic maintenance and upgrades, and remote access for remote attorneys or attorneys in the field. With the right tools in place, law firms can save time, money, and frustration.

Law firm billing can be either the bane of a lawyer’s career or the reason their law firm gets paid — it’s up to the lawyer themselves to decide. Thankfully, it’s easier to implement legal time tracking software into a law firm’s operations than most think. Legal software can help lawyers simplify the billing and invoicing process, creating a space where clients know expectations and trust the statements. This is especially vital in an environment where finances are a sore spot.

Clients continue to push back on rate increases and look for more discounts, according to a recent analysis of the legal field. As attorney rates continue to increase, clients are weighing their options and searching online for lower-cost counsel.

Importance of Legal Billing Guidelines

Getting paid has more to do with a firm than it does with its clients. If a client refuses to pay an invoice or they decline to pay on time, it means the firm has missed several vital signals — potentially going back to when they first took on the client. The problems that created their unwillingness to pay could’ve occurred a long time ago.

Let’s take a look at a fictitious firm, Woolford and Woolford SC, to show an example.

1. Woolford isn’t positioned as an expert in their local marketplace, so clients see them as a discount provider.
2. Their business development tactics rely on needy language that attracts price shoppers.
3. They’re desperate for work, so they welcome these clients into their firm.
4. Their intake process is inadequate; they don’t realize they should interview clients, set expectations, and establish/assess billing guidelines.
5. These clients complain about Woolford’s invoices; they refuse to pay for research, administrative expenses, or junior associates in their firm.
6. Partners in Woolford are conditioned by their clients to expect rejection, so they add discounts, write-downs, and write-offs to their client’s invoices preemptively.
7. The partners are desperate to keep their client, so they offer more. Realization rates fall as revenue and profit decline.

Many law firms deal with a similar scenario, in one form or another, daily. Clients — not firm partners or attorneys — determine what they’ll make. Yes, law firms set their rates, but ultimately, this holds less value if clients are unable or unwilling to pay.

Get Paid Faster With These Law Firm Billing Best Practices

These best practices aren’t a cure-all. Clients won’t pay law firms if there’s a legitimate reason for them to hold back. However, law firms that implement these best practices will find a large amount of non-payment issues resolved overnight.

Let’s take a look.

Law Firm Billing Best Practices #1: Build a Powerful Brand

Branding is commonly misunderstood by businesses, partners, and even marketers. Many believe that their “brand” is a promise, their product or service,  their website, or even their logo — it’s not solely one of those things. On a larger scale, branding is your reputation. It’s the gut feeling people have about a specific law firm.

With many lawyers focusing on practicing law, most attorneys and law firms haven’t built or budgeted for a brand. Without a clear brand, most clients can’t tell the difference between one firm and its competitors.

Clients aren’t typically familiar with the legal industry, so they can’t assess another firm the way most legal professionals can. Clients will rely on other signals to make their decision — personal recommendations, reviews, first impressions, and price.

To fix this, law firms need to build a powerful reputation in the hearts and minds of prospective clients. There are some simple principles you can use to guide you:

1. Do what your competitors can’t or won’t do.

Become an expert in a specific practice area, win a large number of cases, achieve the impossible in a real estate negotiation. Find a way to become exceptionally known for something.

2. Create value for everyone, all the time.

Attorneys can solve problems for those around you by giving speeches, writing articles, hosting webinars and events, and serving the community, creating a powerful and valuable resource. Find a need, then solve it like no one else.

3. Promote your achievements.

Share accomplishments with others in a way that says, “I did this for clients just like you, I can do it for you too.” This is the essential crux of business development, but it’s also the main component most attorneys and firms miss. Lawyers can build a strong website, run a legal blog, or interact with their community on social media.

4. Build partnerships with other influential legal professionals.

As lawyers begin to achieve the above items, they’ll start to build a brand (reputation). Use this reputation to develop successful relationships with powerful, like-minded supporters who are interested in the value provided.

Doing this attracts an avalanche of clients. Marketing and advertising campaigns outperform competitors at a lower cost per click/visit. Firms can attract more clients than other similar practices.

These clients have seen the value provided, and they’re eager to work together. Once a firm is differentiated in their mind, they want that specific firm. As a result, they’re respectful, hopeful, and willing to pay the higher fees requested. The brand precedes the firm.

Law Firm Billing Best Practices #2: Verify Employee Timekeeping

Without a proper legal billing policy in place, money is left on the table. The team is left to track their time on a whim. They’re prone to human error and estimating their time. The longer timekeepers take to complete their timesheets, the more billable leakage their firm experiences. Ann Guinn shared research that supports this in her ABA blog post:

• You lose 10% of your revenue (billable time) if you record time entries the day of once a day.
• You lose 25% if you wait 24 hours to record your time.
• You lose 50 to 70% if you wait just one week.

The attorneys in this particular case study were waiting until the end of the month! If this is projected out, this means firms could be losing 200% to 280% of the revenue they should have. Income that’s rightfully theirs simply because they didn’t track their time correctly.

Here’s how you fix this.

• Switch to automated time tracking software: Legal time tracking software like Bill4Time provide automatic time tracking that accurately captures time. This “set it and forget it” software limits human error and stops revenue leakage.
• Appoint a legal billing liaison: This could be a managing partner, director, or executive that’s responsible for managing the firm and keeping everyone knowledgeable of procedure. This legal billing liaison can create ad sample attorney billing descriptions to help firm staff write better billing descriptions.
• Create an incentive system: Once a new legal billing policy is in place, it may be difficult for everyone to jump on board. It would be worth-while to create morale with incentives or awards to take the edge off and make the process a fun competition.

Treat the line items in your invoice as inventory in a store. It’s valuable revenue, and it needs treatment as such.

Law Firm Billing Best Practices #3: Follow Through With Legal Billing Guidelines

Once a law firm and its clients have agreed on legal billing guidelines, follow them to the letter. Doing this bolsters trust, decreasing the likelihood of a flagged or delayed invoice. Here’s a brief overview of what these guidelines should look like:

1. Shepherd invoices through an eBilling system. If estimates are conservative and there’s a particular emphasis placed on accuracy, pre-bills will be close to the final bill. This attention to detail reduces the need for discounts, write-downs, and write-offs. There’s also a chance to catch billing issues and missed requirements before clients flag them.
2. Pick up the phone and call clients any time there’s a disparity. Are you drastically over or under budget? Have you run into an unexpected expense? Reach out to your decision-makers and point-of-contact ahead of time. Don’t ambush your clients with a surprise (positive or negative).
3. Resist the urge to discount or write-off time. Treat timesheets like inventory. Remember that each line item on an invoice is a unit of revenue. Think of every improvement made to the quality of timesheets/invoices as improving the acceptance and collection realization rates for the firm.
4. Submit invoices on time. Poor communication and law firm sluggishness in publishing invoices is a contributing factor to delayed or decreased payment. Make sure to stick to the schedule and bill clients on time.
5. Offer ePayments. Use alternative fee arrangements that ensure fair compensation. Built-in online payments processors like Bill4Time Payments allow firms to safely and compliantly accept online payments. Offering ePayments increases the likelihood that clients will pay firms on-time — and 70% faster.

Take a look inside Bill4Time Payments.

Increase Firm Cashflow With Law Firm Billing Software

Implementing these tips will help boost realization rates, revenue, and profit in law firms. Using law firm billing software, like Bill4Time, to help navigate legal billing can take a practice to the next level.

Schedule a demo with Bill4Time today to see the positive impact it can have on law firm billing.

Editor’s Note: This blog was originally published in July 2021. Last update: November 2023.

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Try the Best Time Tracking and Billing Software

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Legal time tracking software is great for law firms, but what about consultants and freelancers? Consultant time tracking apps should allow you to easily and accurately capture your time. If you find yourself guessing your time, you may be losing out on revenue.

Accurate and reliable time tracking is arguably the most important metric a consultant or freelancer can track. If not done properly, inaccurate time tracking can lead to billable leakage, poor utilization rates, decreased productivity, and poor performance in the long term. If you’re using a time tracking app and you have the following red flags, you may want to take note. 

Time Tracking Habits to Avoid

Red Flag #1: You Must Enter Your Time Manually

A common issue with consultant time tracking apps is manual time entry. Many apps rely on users remembering to track their time accurately. This may seem like a reasonable expectation at first, but it doesn’t take into account the other tasks a legal professional needs to handle.

Multitasking is a frequent occurrence in the legal industry, but there is a point where it goes too far and ends up impacting performance. Manual timekeeping isn’t as easy as it seems.

To dive into the science of it, psychologists Daniel Kahneman and Amos Tversky coined the term planning fallacy in 1977. Planning fallacy, in short, is the psychological phenomenon where people are optimistic in guessing how long a task will take to complete, underestimating the true number.

Kahneman expands on this idea in his book, “Thinking Fast and Slow.” In the book, Kahneman states that we struggle with time estimation for two reasons:

1. We don’t consider how long similar tasks have taken us in the past.
2. We assume or fail to account for barriers, challenges, or complications that will delay our plans.

The planning fallacy affects individuals, groups, and entire organizations.

The trouble with this is the fact that consultants and their clients are often unaware of the problem. As optimism bias clouds our judgment, we fall into the trap of assuming that our tasks will go well.

Manual time tracking and entry forces consultants to make the mistakes discussed above. Consultants enter their projections ahead of time, ensuring that they neglect previous tasks and the amount of time taken to complete them. Or, they reconstruct their time from memory, losing a significant amount of revenue due to faulty judgment, errors in thinking, and inaccurate estimates.

In a perfect time tracking world, you should be able to start and stop your tracking, while the app measures the amount of time you’ve spent on a specific task or tasks automatically. You shouldn’t be forced to reconstruct or project time, which is a recipe for disaster.

Manual time entry has a direct impact on the amount of revenue you’re able to generate — even if you bill at a flat rate. This is why it’s so important to track time correctly.

You should be able to edit your time if you need to make changes, track meetings, and convert them to time entries automatically. Look for this in a mobile consultant time tracking app.

Red Flag #2: Uniform Time Tracking

Time tracking requires granularity.

In an ideal consultant time tracking app, you should be able to track billable vs. non-billable work automatically — track employees, contractors, and third-party time. You should be able to easily differentiate between the various types of timekeeping (e.g., tasks, projects, meetings, etc.).

Unfortunately, many consultant time tracking apps force users into a timekeeping model that may not be best for their business. This isn’t ideal, as it requires more time and attention when it’s time to analyze time entries for billing, invoicing, or internal analysis.

Red Flag #3: No reporting or analytics for consultant time tracking

There are lots of options for time tracking software consultants can use. However, many of these don’t provide management with the data and intel they need to make good decisions. Good legal time tracking software enables consultants to answer the following questions:

1. Where are we losing the most time?
2. Which employees are most productive, and why?
3. Which employees are the least productive, and why?
4. Which projects, clients, or tasks are most productive or profitable?
5. Which projects, clients, or tasks are minimally productive and unprofitable?
6. What is my profit per employee, partner, client, etc.?

Why are these questions important? They give your business the clarity you need to answer higher-level questions like:

• How do we avoid unprofitable clients in the future?
• How do we attract more of the clients we want and none of the clients we don’t like?
• What 20 percent of projects produce 80 percent of our revenue?
• What 20 percent of clients produce 80 percent of our headaches, conflict, or concerns?

These questions provide clarity.

However, a comprehensive look at your time entries isn’t enough. You’ll need to be able to break your reporting down into actionable, bite-sized chunks you can use to grow your consultancy.

Many time tracking apps are generalists in the sense that they provide you with a limited set of data on your team’s performance. They don’t provide you with the level of granularity and analysis your consultancy needs to grow.

Why Is Time Tracking Valuable for Consultants?

Time tracking is valuable for consultants because it can be easily translated to money. While many organizations feel they’re on top of their time tracking, this isn’t always the case. If your consultant time tracking app has any of the red flags I’ve mentioned, it may be time to switch.

These red flags lead to billable leakage, poor utilization rates, decreased productivity and poor performance over the long term.

Consultants need reliable time tracking software in order to run a productive business. Bill4Time is an affordable, efficient legal time tracking software that allows you to track time with ease, manage billing, create invoices, and effectively run your practice — all in one place.

As a consultant, you’re busy. The software you use should simplify everyday tasks and keep your law firm running without the hassle.

Editor’s Note: This blog was originally published in April 2021. Recent update: October 2023.

While many fresh law school graduates come out with a wealth of skills, administrative skills may not be one of them. Time tracking for first-year associates is typically learned from other lawyers or internet searches. While leaning on experienced legal professionals is a great way to gather knowledge and learn quickly, you may find more manual ways of time tracking that aren’t as effective as legal time tracking software.

Spreadsheets, quick notes, or tracking your time at the end of the month from memory are not ideal for keeping accurate records. In addition to missing out on time you could bill, you may overbill a client, lose sensitive information, make a detrimental error, cost your firm money, or damage your reputation.

To combat this, first-years should also learn how to use legal time tracking software, as it can help with accuracy and transparency throughout the billing process. There are many different obstacles in place when it comes to time tracking, and learning these as a first year associate can be difficult, so let’s go over billable hours best practice and how legal time tracking software can help.

What Are Billable Hours?

Billable hours are time spent working on professional tasks that can be charged to the client for the agreed hourly rate. Lawyers aren’t unique in billable hours — consultants, writers, developers, graphic designers, and other professionals bill by the hour. You need to keep accurate records of how long you spent on each client’s task in order to charge billable hours. If your records aren’t precise and well organized, you could undercharge or overcharge.

Make sure you understand a firm’s billable hours expectation before signing on. Anything over 1,800 billable hours annually will likely be more than 40 hours a week total, with non-billable hours added in. Working more than 50 hours a week has an impact on mental health. Keep this in mind when accepting a job offer.

How To Identify Billable and Non-Billable Time

Billable time includes time working on tasks that are directly related to the work for your client. This may vary according to the specifics of the case, but it could include:

• Direct work to complete the project
• Time spent strategizing or planning
• Time spent researching
• Corresponding with the client, whether on the phone, through email, or in person
• Attending meetings

Non-billable time is time that you’re doing work, but not directly for the client. This may include:

• Developing professional skills
• Social and team-building events or exercises
• Networking events
• Time spent correcting your errors
• Invoicing, processing payments, or other administrative work
• Time spent performing work outside of the scope of your client agreement

Sometimes, determining what’s billable and not can be more complicated. Here’s how you can evaluate if you can charge for your time?

• Was my time used for my own professional needs or the client’s needs?
• Was this work necessary to complete the project?
• Was this task included in the client agreement?
• Was my time spent related to the project or a result of an avoidable mistake on my part?

First-Year Associate Time Tracking Tips

1. Determine your invoicing schedule

Depending on the requirements of your firm, you may be able to set your own invoicing schedule. Many firms use a monthly billing cycle and bill on the same day each month, but you may be able to set weekly, biweekly, or end-of-project billing cycles.

2. Use digital tools to track time

Many lawyers are “old-school” and prefer manual time logs, but that’s not the most efficient or accurate way to track your time. Legal time tracking software and practice management software not only offer time tracking functions, but cut down on the time you spend manually filling out logs, client details, task details, and invoicing. The software also retains all your important client data in a secure, centralized location, so you can access it quickly and easily, no matter where you are.

3. Create time logs

Whether you choose a software solution or go manual, you need to create a time log to track your billable hours by the client. With a spreadsheet, this means creating columns for the clients, the tasks, the date, the time spent working — all of which cuts into your free or billable time.

With a cloud-based time tracking solution, you have an efficient time tracking feature with a digital timer and a list of clients. When you start a task, all you have to do is start the timer and it does the time tracking for you.

4. Include details on your invoice

Time tracking software should make your billable hours easy to track, calculate, and report according to the client and the project, which you can access easily. All of this information will go on the invoice, such as:

• Business and contact information, such as the firm name and address, your phone number, and your email address.
• Your client’s contact information
• An itemized list of tasks or services complete within this time frame
• Billable hours for each task or service
• Payment terms
• A deadline for payment
• The total amount due, including any taxes or fees

Including all this information can be tedious and time-consuming. A digital timekeeping solution allows you to customize and generate invoices with detailed billing information quickly and easily. You can also create and edit batch invoices, and clients can review and pay invoices online 24/7.

How to Manage Non-Billable Time

It’s common for first-year associates to have goals or targets for the billable hours they want to have. Whether the goal is weekly, monthly, or yearly, if you’re not tracking your time, you may not realize you’re too far behind to catch up until it’s too late.

For example, if you want to reach a goal of 2,000 hours annually (with both billable and non-billable time), you would need to track roughly 40 hours each week, or eight hours a day. You may not work exactly eight hours each day, but this breaks down what you should average in a day, week, and month to reach your annual total hours goal.

If you don’t track your time, you tally up your billable hours for the quarter or at six months and realize your goal is now impossible. You didn’t reach your billable hours in the past few months, so now it’s unlikely you’ll have the time or work to reach those 2,000 hours.

Time tracking for first-year associates (and any lawyer) is the best way to make sure you stay on track with your goal. Here are some tips:

1. Track all of your billable time, even if it’s just a few minutes on a client call or drafting an email. It adds up.
2. Track everything in real time, rather than backtracking and hoping you have the time you started and ended a project correct.
3. Record your non-billable time. You won’t make money on it, but you can identify areas where you could be more efficient or tasks that you may be able to outsource.
4. Don’t procrastinate! It can be easy to do, especially if you get side-tracked with social media or other distractions. Keep your work time focused and save the idle time for when you’ve reached your billable goal for the day.

Time Tracking for First-Year Legal Associates

Time tracking can be challenging for any attorney — both digitally inclined and those not as tech-savvy. Without the right foundation, time tracking can be time-consuming and inaccurate, leading to losses in productivity and revenue. Bill4Time’s legal time tracking software captures lost revenue by tracking time anywhere, anytime, streamlining invoicing, and keeping accurate project logs.

Editor’s Note: This blog was originally published in October 2021. Last update: October 2023.