Carole Poster

How Do Consultants Track Billable Hours?

July 17, 2024 By Carole Poster Leave a Comment

Legal consultants typically log their time as they work on tasks, using timers or manual entry systems. These methods allow them to track how much time they spend on each activity, providing a clear record of their billable hours.

Many consultants often use legal time tracking software to log their activities precisely. High-quality legal software distinguishes between billable hours vs. actual hours, ensuring every minute spent on client-related work is billed correctly and not overlooked.

An important aspect of this process is determining the increments you will bill time in. But what type of increments can you bill in? Do consultants bill in 15-minute increments? What are the benefits of billing incrementally? In this short guide, we will explore the tools and methods legal consultants use to track and bill their time effectively, as well as the advantages of different billing increments.

How Do You Bill in Increments as a Consultant?

Billing in increments as a legal consultant involves breaking down your time into smaller, standardized units, typically ranging from six to fifteen minutes. This method, common in the legal profession, allows for precise tracking of time spent on various tasks.

Why Use Incremental Billing?

Improved Accuracy: Billing in smaller increments makes sure that every minute of work is accounted for. This method eliminates guesswork, reducing the risk of underbilling or overbilling clients.
Transparency: Clients appreciate the detailed breakdown of tasks. Incremental billing provides a clear picture of how you spend time on a case, fostering trust and transparency in the client-consultant relationship.
Efficient Time Management: For consultants, this method helps in managing time more effectively. By tracking time in smaller units, consultants can better analyze productivity and identify areas for improvement.
Enhanced Client Satisfaction: Clients often feel more satisfied when they see a detailed, itemized invoice. It shows that the consultant has dedicated specific periods to their case or project, justifying the costs and highlighting the value of the services provided.

In the legal field, where precision and accountability are of the utmost importance, billing in increments can help you demonstrate your professionalism. This level of detail shows clients that you only charge for the actual time spent on their case, enhancing their trust and satisfaction.

How Does Billing in 15-Minute Increments Work?

Billing in 15-minute increments involves dividing your work time into 15-minute blocks, each representing 0.25 of an hour. This method can simplify time tracking and invoicing, making it easier to manage and understand.

To illustrate, consider a case where you’re working on a client’s case for 1 hour in 15-minute increments. The breakdown might look something like this:

15 minutes on a phone call with the client (0.25 hours)
30 minutes researching case law (0.5 hours)
15 minutes drafting a letter (0.25 hours)

You would bill these tasks as 1.0 hours in total. Billing in quarter-hour increments reduces the complexity of time tracking compared to more granular methods like six-minute increments. Legal consultants can quickly tally their billable time, saving administrative effort.

How Do You Bill Time in 6-Minute Increments?

Billing time in six-minute increments involves dividing each hour into ten six-minute segments, each representing 0.1 of an hour. Many legal consultants use this method to ensure that all work is accounted for precisely and accurately. The billing increments chart below provides a more comprehensive breakdown.

Let’s say you need to bill for the following tasks:

18 minutes drafting a contract (0.3 hours)
36 minutes on a client call (0.6 hours)
24 minutes reviewing documents the client sent you (0.4 hours)

By breaking these tasks into six-minute increments, the consultant can bill for exactly 0.3, 0.6, and 0.4 hours, respectively, providing a detailed and accurate representation of the time spent on each activity. The two main benefits of billing this way include:

Precision: Six-minute increments offer a high level of detail, which is crucial for justifying billable hours to clients. You can account for every small task and only bill clients for the exact time spent on their matters.
Reduced Risk of Overbilling: Unlike larger increments, six-minute billing minimizes the chances of rounding up time excessively, which can lead to overbilling and client dissatisfaction.

While tools like a billing increments chart are helpful, legal consultants often use time tracking software like Bill4Time to streamline the process further. Bill4Time can automatically divide time into six- or 15-minute increments, convert it to decimals, and multiply it by your hourly rate. This type of software helps legal consultants optimize their administrative workflows and reduce the potential for human error in manual calculations.

How Do Consultants Charge for Their Time Using Software?

Legal professionals can simplify their entire billing cycle, from entering time to receiving payment, by using time tracking software like Bill4Time. The Bill4Time platform can help you with tasks like:

Entering Time
Using Bill4Time, consultants can easily start tracking their time. When beginning a task, you can start a timer directly within the software and connect it to any client. If you prefer to enter time manually, you can do so by selecting the client and matter and then inputting the task’s duration.

Generating Invoices
Once you’ve logged your time on a case, Bill4Time can generate detailed invoices. These invoices include a breakdown of each task performed, the time spent, and the corresponding fees. Bill4Time automatically calculates the total billable amount based on the consultant’s hourly rate. For example, if you log 3.5 hours of work at $200 per hour, Bill4Time will generate an invoice showing a total of $700.

Sending Invoices and Receiving Payments
Bill4Time simplifies the invoicing process by allowing you to send invoices directly to clients in multiple ways: email, text, or the Bill4Time client portal. You can customize the invoices with your logo and branding, building credibility. Clients can then make payments online through Bill4Time’s native payment processor, making the process convenient for both parties.

Ready to streamline your billing process and improve your efficiency? Sign up for a free trial of Bill4Time today or schedule a free demo to see how it can support your consulting practice.

What Is the Standard Billing Increment?

July 2, 2024 By Carole Poster Leave a Comment

Most lawyers use 6-minute increments for billing. Why? It’s simple and fair. You don’t lose time or overcharge. Whether you use manual methods or legal time tracking software, tracking billable hours vs. actual hours ensures you charge clients fairly and manage your time effectively.

With a clear outline of the time spent on cases and firm-related activities, you can bill accurately, understand where your time goes, and improve overall productivity. Keep reading to learn more about billable hours, standard billing increments, and how to streamline your firm’s time tracking processes for more efficiency and precision.

What Does It Mean to Bill in 6-Minute Increments?

Billing in 6-minute increments means dividing an hour into ten equal parts, making it easier to track and bill time accurately for shorter tasks. This practice started around the 1920s and became common in the legal industry.

Billing in smaller increments, like billing by the minute, can be time-consuming and hard to track. Larger increments, such as 20 or 30 minutes, make it difficult to bill for quick tasks, like answering a client’s email, and could lead to overcharging.

Six-minute increments offer a good balance. They allow you to bill for short tasks and measure time more precisely. For instance, a client call lasting 17 minutes translates to 0.3 hours. This method helps you keep accurate records and ensures fair billing.

Wondering, “How do I calculate billable hours using this method?” By dividing each hour into ten 6-minute parts, you can track time spent on tasks more precisely. You can see how this works with a billable hours calculator in 6-minute increments. The best option, though, is time tracking software, which automates the calculation for you, ensuring accuracy and saving you time.

Click here to schedule a free demo of time tracking software to see how it works for yourself.

What Does Billing in 15-Minute Increments Mean?

For some law firms, billing in 15-minute increments is a more effective way to track time. This number is still easy to calculate based on an hour, as each task is 0.25 of an hour.

Though 15-minute increments are seen as a compromise between the complexity of 6-minute increments and the ambiguity of 30-minute or 60-minute increments, there are benefits and drawbacks. While there’s a lower administrative burden and more simplicity in tracking time by the quarter-hour, which comes naturally to most people, it lacks the transparency of 6-minute increments. It’s also easier to round up and pad bills unintentionally.

Choosing between them comes down to your typical legal tasks and client expectations. Some clients may prefer a more detailed breakdown of the time spent on their projects, which you can provide with 6-minute increments. However, if you have legal tasks that involve longer periods of case-related work, the simplicity of 15-minute increments may be more effective.

Understanding billing increments helps with better practice management, but how many hours should you aim for annually? Let’s take a look.

How Many Billable Hours Should I Work?

How many billable hours you should work depends on balancing firm objectives, client needs, and your own mental health and well-being. Firms typically target between 1,700 and 2,300 billable hours annually, but this range can vary.

Larger firms in cities like New York, Atlanta, and Miami often require over 2,000 billable hours. Smaller firms, public interest law firms, and those outside urban areas may require fewer billable hours, focusing on employee development, client relationships, and other firm-enhancing activities. These firms might set their targets at 1,500 or 1,600 billable hours per year. Government and public interest firms usually don’t have billable hour requirements as they don’t bill their hours to clients.

How Hard Is It To Hit 2,000 Billable Hours?

Meeting the goal of 2,000 billable hours each year isn’t easy. Many firms set this target, but it requires careful planning and consistent effort. Some ways lawyers get closer to this goal include:

Daily Commitment

First, think about the daily commitment. To hit 2,000 hours a year, you must bill around 8 hours each workday. That doesn’t just mean working 8 hours; you need to bill for 8 hours. Many tasks, like administrative work or internal meetings, can’t be billed. So, you’ll often find yourself working longer days to make up for non-billable time.

Efficient Time Management

Time management plays a big role. You have to be organized and disciplined. Use time tracking software to monitor your hours closely. Break your day into chunks and set specific goals for each period. For instance, you might block off two hours in the morning for drafting a brief and another two hours in the afternoon for client meetings.

Managing Interruptions

Managing interruptions is crucial. Unexpected calls, emails, or meetings can eat into your billable hours. Set boundaries and stick to them. If you have an assistant, let them know when you need uninterrupted time. You can also use email autoresponders to manage client expectations about response times.

Work-Life Balance

Balancing work and personal life becomes challenging. Long hours can lead to burnout. Make sure to take breaks and find time for activities outside of work. Guarding your time in this way will help you stay fresh and focused when you’re at your desk.

Tracking Progress

Regularly tracking your progress is essential. Weekly or monthly reviews can help you see if you’re on track. If you find you’re falling behind, you can adjust your schedule and workload to catch up before you get too far away from your goals.

Regardless of your target, choosing the appropriate billing increment can have a huge impact on your realization rate and productivity. For example, billing in smaller increments can lead to a higher realization rate because it allows for more accurate time tracking and billing, reducing the likelihood of underbilling while improving client satisfaction.

How Do You Capture All Billable Time?

The best way to capture all billable time is by using dedicated time tracking software like Bill4Time. Relying on manual methods, like jotting down hours on paper or using spreadsheets, often leads to missed minutes and billing mistakes. Bill4Time ensures you track every minute accurately, preventing any lost billable hours.

With an intuitive interface and a mobile app, Bill4Time lets you log your hours from the office, court, or anywhere in between. It also includes calendaring, document management, and billing features, so you can run your whole practice from one platform.

For a reliable way to capture all billable time, consider trying Bill4Time. Sign up for a free trial or free demo and explore how Bill4Time can enhance your firm’s efficiency and accuracy.

5 Easy Ways to Improve Law Firm Productivity

June 26, 2024 By Carole Poster Leave a Comment

Every attorney knows the feeling: the mounting pressure of case deadlines, client meetings, and an ever-growing pile of paperwork. Balancing these tasks can be overwhelming, leading to late nights and missed opportunities. But what if you could streamline your workflow and reclaim some of those precious hours?

It can be easy to fall into the trap of handling everything on your own, thinking it’s the only way to maintain control. However, this approach can hinder productivity. By using strategic planning and the right tools, you can manage your caseload more effectively. Keep reading for five actionable tips designed specifically for attorneys. These tips will help you tackle common productivity challenges, ensuring you can focus on delivering the best results for your clients without burning out.

1. Plan Out Your Week

For many, the biggest obstacle to law firm productivity is poor or nonexistent planning. Lawyers have to juggle many tasks, clients, and appointments, so detailed planning is the best way to ensure everything gets done.

A practical approach is to outline your week in advance, noting all appointments, scheduled calls, research periods, client meetings, and other time-sensitive tasks. This allows you to allocate time for daily tasks like unexpected calls, paperwork, and time tracking. Effective planning can provide the flexibility needed to handle surprises without disrupting your workflow.

Scheduling should be realistic, allowing adequate time for each task to minimize procrastination and ensure completion of key tasks.

2. Tackle Hard Tasks First

After using timekeeping software, lawyers often notice that a lot of time is wasted doing unrelated tasks or procrastinating. It’s common to delay difficult tasks like preparing complex motions or following up on overdue client payments, leading to a last-minute scramble to get everything done.

A practical approach is to start your day by tackling these challenging tasks first. Research on circadian rhythms shows that our cognitive functions, including focus and willpower, are at their peak in the morning. This makes it the ideal time to handle complex legal tasks that require intense concentration and decision-making.

By prioritizing the most unpleasant or complex tasks first thing in the morning, you can ensure they get the attention they need. This strategy can prevent the stress of unfinished work piling up and make the rest of your day feel more manageable.

3. Schedule Distraction-Free Time

Phones and emails are vital for client communication, but they can seriously disrupt your workflow. When a phone notification pings or new emails flood in during a project, it can pull your focus away. Even quick chats with colleagues can add up if they keep stopping by, eating into your productive hours.

One effective strategy is to designate specific times for handling phone calls, emails, and team communications. Outside of these windows, keep notifications off. During the allotted times, address all communications promptly. This approach ensures you maintain professionalism and stay on top of time management. The rest of your day can then be dedicated to uninterrupted work on critical tasks.

Also, consider putting social media on hold. Checking one comment can easily spiral into a long session of browsing through feeds and articles. While many firms have social media managers, if you don’t, schedule specific times for social media engagement just like any other task.

4. Prioritize Your To-Do List

To-do lists can be a powerful tool if used correctly. However, for many lawyers, these lists can quickly turn into overwhelming catalogs of tasks, making it hard to accomplish anything meaningful.

Start your list with the most critical tasks that must be completed that day. Once those are identified, prioritize the rest in order of importance. This method ensures that if unexpected tasks come up, they won’t derail your entire schedule or result in missed deadlines.

At the end of each day, review your agenda for the following day. This daily review allows you to adjust your priorities based on any changes that occurred during the week. You can even include a note on your calendar for the next day of the main things you need to accomplish. By planning and reprioritizing regularly, you can stay on top of your workload and manage your time more effectively.

5. Adopt Legal Software

The legal profession is steeped in tradition, and methods like manual time tracking and paper billing are still common. Many learned these techniques from seasoned mentors, and they have served attorneys well for many years.

However, relying on manual processes can slow you down and increase the risk of errors. Legal software offers a way to modernize your practices without sacrificing the thoroughness and precision attorneys value. Features like time tracking, document automation, client management, and mobile access allow lawyers to automate routine processes and access mission-critical information at any time, from anywhere with an internet connection.

By leveraging these technologies, you can shift your focus to what you do best — providing exceptional legal services to your clients. The result is a more efficient, productive, and responsive law practice.

Improve Law Firm Productivity with Bill4Time

The right legal software can go a long way in boosting productivity in a law firm. Bill4Time offers an affordable, efficient, and intuitive legal practice management solution with features designed specifically for law firms, such as document management, case management, billing and invoicing, and time tracking. With Bill4Time, lawyers can practice more and manage less with efficient, automated processes designed with law firms’ needs in mind.

You can explore Bill4Time right now with a free trial. No need to input your credit card information. Simply sign up and see what Bill4Time is all about!

Trust Accounting: The Beginner’s Guide

June 25, 2024 By Carole Poster Leave a Comment

Trust accounting is a large part of everyday life for lawyers and businesses. Think estate planning, banking, real estate, and other groups that manage large amounts of money. So, as a lawyer, how do you use trust accounting at your law firm?

Imagine this:

You’ve won over a prospective client! A major new client has just signed on the dotted line. You’ve received a sizable retainer with the promise of more work if the initial project goes well. Your clients trust you enough to sign on the dotted line, but their trust isn’t where it should be. Not yet. A single mistake can end the client relationship before it begins. The good news is you’re an experienced pro. If you’re like most A-player firms, you take client ethics seriously. You use trust accounting to maintain appropriate financial boundaries.

What Is Trust Accounting?

A trust account is simply a special bank account an attorney must maintain. Attorneys receive money from their clients, which are then held in this special bank account.

In the past, attorneys kept track of client trust funds using ledger cards, with the vague hope that their records were both accurate and current. Thankfully, we’ve software that can help manage these kinds of accounts and more accurately track the cash flow.

Why should your law firm use a trust account? Here’s what makes a trust account significant.

The money in this account belongs to the client, not the attorney.
Attorneys have to earn this money.
Attorneys are required to follow the rules and regulations laid out by the state bar and local government.

Wait a minute. Why would attorneys need trust accounts in the first place?

As you know, attorneys take on the role of fiduciary. When you represent your clients, you’re acting on behalf of your clients for their interests and you’re expected, by law, to provide the highest standard of care.

If you’re an established attorney you’re probably aware of the ins and outs of a trust account. Your clients, on the other hand, might not be familiar or understand it. This article is a helpful primer you can share with them.

It’s a big deal for clients. It means there’s built-in protection, assurances that are in place to ensure they’re treated fairly and their firm behaves ethically.

Trust Accounting Rules and Regulations

The American Bar Association sets specific rules outlining the dos and don’ts of trust accounts. Believe it or not, these rules are helpful conversion boosters. They’re marketing details you can use to gain client confidence.

If your firm operates above board, going above and beyond other firms you have an advantage. Teach clients your firm’s processes and how you do things, show them the benefits of doing things the right way. Help your clients truly understand how things work, what protections are in place for their benefit, and how your firm follows those closely.

Let’s take a look at the rules.

1. No Commingling or Mixing Funds

You can’t mix personal/professional funds with trust accounts. If you’re short on payroll, you can’t dip into trust accounts to borrow what you need, so you can replenish it later.

At no time should your funds be stored together or mixed with trust accounts.

You may have one trust account with your bank but you should have multiple sub-accounts for each client. Your accounting software should enable you to create the appropriate sub-accounts for each client.

2. Maintain a Separate Ledger

Attorneys must maintain a separate ledger for each client with money in the trust accounts. Clients should be allowed to see their specific ledger at any time, inconvenient as that may be.

Your client ledger should show all relevant transactions (funds coming in or going out). Clients, at the absolute bare minimum, should receive their client ledger at least once per year.

3. Verify Trust Accounts Regularly

You’ll want to complete a three-way reconciliation of your trust account each month. Check the actual bank balance against the balance you show in your accounting records.

If there are any deposits made after the statement cutoff date, add that to the balance shown on the statement. Any withdrawals after the statement cutoff date, subtract that from the balance shown on the statement.

4. If You Haven’t Earned It, Don’t Touch It

The funds in your trust accounts shouldn’t be listed as an asset of the firm on your financial statement. It should be listed as an “other current liability.” If your clients demand a refund from this trust account, you should be able to issue that refund immediately.

Create deposit and withdrawal protocols into your trust account procedures. Funds in this account should never move without a paper trail and an appropriate reason.

5. Don’t Rob Peter to Pay Paul

You’re acting as a fiduciary so you’ll need to be able to provide the right kind of data to your clients. Save everything – the date, amount and purpose of each and every deposit. Save the same data for withdrawals/disbursements.

Make sure the appropriate client’s name is on every trust account check. Doing this dramatically reduces the odds that you’ll overspend in one account while acting on behalf of another client.

6. Create Checks and Balances

The staff members responsible for deposits should not be responsible for disbursements and so on. Both employees/teams should be responsible for balancing the accounts at the end of the month.

Never sign checks or issue approvals without the records for said transactions. Doing this reduces your ability to catch and prevent questionable purchases. Last thing: Make sure you’re an engaged part of the account reconciliation process.

7. Follow State Bar and Government Regulations

The state bar sets, manages and enforces the rules and regulations for trust accounts. The state bar or other governmental body may randomly audit a group of lawyers/firms and their trust accounts. These random audits keep attorneys honest.

8. No Collecting Interest

Attorneys aren’t allowed to earn interest on trust accounts. All interest earned by trust accounts is paid to the appropriate IOLTA program. This non-profit program funds legal services for the indigent and other programs that support other legal causes.

That’s a lot to cover, isn’t it?

But we still haven’t covered when you’d actually use trust accounting. So let’s take a look.

Real estate transactions. As any real estate attorney knows, funds related to a real estate transaction will flow through their trust account. Escrow payments, appraisal and title fees, loan payoffs, real estate agent commissions and homeowners insurance are all common examples. The protocols, policies and procedures we’ve discussed above are crucial to maintaining a stable firm.
Legal settlements. A personal-injury payout, payouts from a class action lawsuit, or a workers’ comp award are all examples of settlements passing through a trust account. The lawyer receives settlement fees into a trust account. They’re able to distribute the funds as needed once the money is available as appropriate.
Retainers. Attorneys typically charge a retainer at the beginning of the relationship. This retainer doesn’t belong to the attorney. Not yet at least. This retainer is simply a security deposit that’s used to pay for future billings/services.

When an attorney issues an invoice to their client, they’re able to draw against the funds in the trust accounts to settle their client’s account. If the attorney uses the funds in a trust account there should obviously be an agreement or engagement later stating that fact.

You may be surprised at the amount of lawyers and firms that aren’t managing their trust accounts properly. These attorneys are rolling the dice with their careers, their firm, and their clients’ financials.

If you’ve read this far, there’s a good chance you’re conscientious. Someone who’s orderly or industrious, willing to do what’s best for their firm.

How to Use Trust Accounting at Law Firms

Trustworthy firms use trust accounting software.

It’s good for clients. It’s great for attorneys.

Go above and beyond other firms by using a trust accounting software that makes it easy to manage trust accounts for your law firm. Teach prospective clients about the value you provide. Show them, in an appealing way, how you do things. It’s one more way to extend your firm’s success.

6 Legal Time and Expense Reports Every Firm Needs

June 13, 2024 By Carole Poster Leave a Comment

The secret to a successful law firm is keeping a close eye on its performance. Law firms that consistently track their key performance metrics can determine where to scale for growth and identify other areas for improvement. Whether it’s daily, monthly, or quarterly, keeping a pulse on key business metrics with the use of legal time and expense reports can help law firms make proactive decisions to remain profitable and mitigate potential risks.

Rather than keeping metrics in a spreadsheet or paper, law firms can use law practice management software to quickly generate reports. It’s important to know what to track first — continue reading to learn the type of legal time and expense reports firms should pull and best practices.

What Are Legal Time and Expense Reports?

Time and expense reports can reveal whether a law firm is profitable or simply breaking even. Typically, time and expense reports may include:

Time entry reports, which cover the time entries by client or matter
Time summary reports, which include weekly and monthly time entry totals by the client, matter, and staff member

These two reports can offer insights into how current hours are divided between clients and matters. This can show which ones are taking too long to complete or where time can be better managed, either by the firm or by the staff members.

What Information Is Captured on Legal Time and Expense Reports?

1. Billable Performance/Revenue Report

This report provides in-depth knowledge of the actual revenue vs. the target revenue of the law firm. It features performance metrics like collection, utilization, and actualization rates. When a law firm has these metrics at hand, they can determine where things are working and what can be done to improve the numbers, as well as the individual performance of staff members.

Time tracking software streamlines the timekeeping process by accurately and quickly tracking time with a timer on a phone, tablet, or desktop. Billable and non-billable time can be tracked separately for keener insights. Best of all, law firms can review and track daily or weekly time summaries to keep up with the productivity and financial status of the organization.

2. Statement of Cash Flow

A statement of cash flow helps law firms track and manage revenue generation. This should include the net income, cash from operating activities, adjustments on net income, and depreciation. This report can indicate whether the firm may need more cash or when it’s safe to commit some funds to savings.

With the support of legal management software, firms can generate time and expense reports to get a comprehensive view of their finances. This report should reflect payment history, summary reports, expenses, or any overdue balances.

3. Accounts Receivable Report

The accounts receivable report shows the money owed to the law firm. This report is essential for tracking the status of invoice payments and if any are unpaid. Law firms should monitor accounts receivable on a firm-wide basis and per-client basis.

If client invoices have a tendency to be delayed, it may be beneficial for law firms to streamline the process with online payment options. The paper billing process is slowly phasing out in the legal industry with advancements in legal technology.

Using Bill4Time, for instance, can greatly improve the billing process. Bill4Time offers Bill4Time Payments, a native payment processor built into the platform. This feature allows for convenient and secure online payments, making it easier to collect payments quickly. Additionally, Bill4Time Payments provides exclusive reporting to track payments, refunds, overdue balances, and more, ensuring comprehensive financial oversight for law firms.

4. Monthly Revenue Report

The monthly revenue report is important for law firms to appreciate the capital flowing in and out. This report considers the time billed and current collection, and it can be narrowed to reflect daily, weekly, monthly, quarterly, or yearly revenue.

Bill4Time comes with custom features including detailed revenue reports and report customizations that allow for in-depth views of different performance metrics. The combinations are virtually limitless to help firms reach their goals.

5. Balance Sheet Report

A balance sheet covers the assets and liabilities of the firm, including accounts payable and current capital. This helps law firms gauge the firm health and make adjustments to ensure that things are on track for success in the short and long term.

With time tracking software, law firms can generate balance sheets with granular firm data like balances for individual clients or trust payments for IOLTA compliance.

6. Profit and Loss Statement

The income statement is a report that firms can use to track earned revenue and expenses paid, including overhead, marketing costs, insurance costs, and other expenses. This statement shows the most recent figures for the entire year, rather than periods of highs and lows, to evaluate the firm’s health on an annual basis.

Each profit and loss statement tracks the full previous year, working backward to plan for future performance. Firms can also customize these reports to account for seasonal performance or periods of change that may have impacted the numbers.

How Time and Billing Software Streamlines Expense Tracking

These legal time and expense reports are a great foundation for the type of metrics law firms should be tracking on at least a monthly basis. With legal management software like Bill4Time, law firms can leverage robust reporting functionalities and custom features to monitor firm health and performance. See how Bill4Time’s reporting features work for yourself with a free demo or free trial.

Customer Service for Law Firms: The 4 Keys to Success

May 16, 2024 By Carole Poster Leave a Comment

Customer service for law firms is key to generating and retaining a strong book of business. Many firms believe providing great service stops at winning a case, but for clients, it’s much more than that. Taking the time to evaluate your processes to ensure you ‘wow’ each of your clients will yield a greater return for your firm in the long run.

If you’re unsure where to start, continue reading to unlock the 4 keys to a successful customer service strategy.

Key #1: Maintain consistent and broad communication

To communicate effectively, you’ll need to identify your two important details:

Client expectations: What sort of information do your clients want from you (e.g., documents, product updates, responses, etc.)? How often do they want to hear from you? Who needs to hear from you? Is it a single point of contact, a small group of decision-makers, or a Board of Directors?
Client communication style: Your client communication style determines how you communicate with your clients. Here’s a brief table outlining three common communication styles.

You’ll need to identify these details and add them to your client intake process well before your client’s matter is underway.

	Traditional	Contemporary	Future-focused
Availability	During office hours	On-demand	Proactive, available 24/7
Preferred channels	Phone, in-person	Traditional + digital	Fastest available channel
Data requirements	Just the essentials	Everything I need to know	Access to all data, on an as-needed basis

Your client may have traditional availability, future-focused communication channels, and contemporary data requirements. These details need to be flushed out ahead of time, during your firm’s intake process. This is how you provide your clients with the communication that best suits their needs.

Key #2: Relationship matchmaking

Your clients will likely have a mix of the big five personality traits. These personality traits determine whether your partners and associates will “click” with clients:

Openness: Clients who are high in openness have a greater degree of intelligence and intellectual curiosity. These individuals and firms value knowledge, competence, experience and data more than other personality types. Truth-telling is always important but it’s especially important with these clients due to their intelligence and natural curiosity.
Extraversion: These clients are outgoing and skilled connectors. They value relationships and the activities that build these relationships – rounds of golf, dinners, events, etc. These clients are best matched with an extroverted partner or associate in your firm.
Agreeableness: These clients are cooperative, easy to work with, polite and compassionate. They’re not always as honest, open or transparent as they need to be due to a strong fear of conflict.
Conscientiousness: These clients are highly self-disciplined. They’re reliable, trustworthy, organized and efficient. They look for well-planned and properly executed projects and matters. These clients are often traditionalists, people who prefer to do things the way they’ve always been done.

These details matter because they can help you figure out your client’s personality and how they may interact with you. It’s best if your client’s point of contact, a partner or associate, matches your client (point of contact). I realize this isn’t always feasible, especially for small and one-person firms. In those cases, you’ll need to be all things to all clients.

If your client is agreeable, work with them, be agreeable. Have a conscientious client, but you’re not as conscientious as you’d like to be? Recruit a virtual assistant who can help you produce the results your client needs to feel secure. Customer service for law firms is about meeting clients where they are and building of what is in their best interest.

Key #3: Display competency at multiple levels

Your clients want the best attorney money can buy. You’re a credentialed and highly educated legal professional. Prospective clients assume that about you because you’re knowledgeable, you attended law school and you have lots of experience. This kind of credibility is helpful but it’s even better presented when you have demonstrated yourself as a thought leader or educator.

In addition to the broad competency we’ve just covered, you need to provide the following:

A demonstrated ability to simplify complex information
Demystify the law/make it simple
Explain the available options to your client in a way that simple and concise
A professional distance (i.e., no inappropriate schmoozing)
Set and meet deadlines

These details are simple, but they’re not always easy to relay to your client. Especially when it comes to discussing legal terminology. Clients want an attorney who understands the law but has the competency to bring it down to their level.

Key #4: A strong value proposition goes farther than you think

Rightfully, clients expect transparency when it comes to the price of your services. It matters to a certain extent, but what really matters more is value. A strong value proposition means your clients are willing to spend more money with you than they would with a competitor.

What’s a value proposition?

“The value a company promises to deliver to customers should they choose to buy their product. A value proposition is also a declaration of intent or a statement that introduces a company’s brand to consumers by telling them what the company stands for, how it operates, and why it deserves their business.”

A strong value proposition acts as an economic moat. With an economic moat, it’s difficult for clients to leave (they don’t want to) and harder for competitors to attack your firm.

The brand moat. With the brand moat, customers are willing to pay more for your service because of what they get in return (e.g., prestige, reputation, quality, etc.) — the brand recognition from firms like Cravath, Swaine & Moore.
The secret moat. Intellectual property – copyrights, patents, trademarks, trade secrets – anything that fits into these categories makes it difficult for competitors to compete with you. Amazon’s one-click, Google’s search algorithm and KFC’s secret recipe are all secrets.
The toll moat. This means you have exclusive control over a market or niche. You’re the only game in town, so if customers want it, they’ll have to come to you. It’s Google’s search algorithm and its accurate search results.
The switching moat. Businesses with a strong switching moat are tangled up in their customer’s daily life. Amazon continually adds free products and services to Amazon Prime. Customers fill these services with their data, making a separation incredibly difficult. The more clients depend on your law firm, the harder it is for them to walk away

These moats are creating in two ways: (1.) Doing what other firms can’t (2.) Doing what other firms won’t. The legal industry is a bit more constrained in this area, but that doesn’t mean it’s insurmountable. Provide customers with a greater level of service, quality of support and you have the tools you need to create exceptional customer service value.

Customer service for law firms starts with value

As you can see, delivering exceptional customer service at your law firm doesn’t require a heavy lift. If anything, it’s expanding on processes you already have in place, such as intake. Using client intake as a deep dive into a client’s needs, communication style, personality, etc. will make providing great service simple.

Try implementing the four keys to customer service in your practice and you’ll find it’s easy to attract and retain the outstanding clients your firm needs to grow.