Nina Lee

Like any business, law firms provide services with the expectation of being paid at the time the work is finished. Unfortunately, the average law firm only collects about 85% of invoiced amounts, which can add up to tens of thousands of dollars in lost revenue.

Collecting debts can be challenging, but it’s part of running a successful law firm. Instead of leaving billable hours on the table, learn how to set up a collections process for legal debts to keep your cash flow moving.

What Are Law Firm Collections?

Law firm collections is a means of requesting clients pay for their outstanding invoice balance. Typically, this is done with a lawyer debt collection letter, also knowns as a demand letter of payment or a letter of demand.

A law firm collections process can resolve client debts by encouraging your client to pay or opening the line of communication to find a resolution that works for your client and your firm. Then, if you have to take further legal action, the debt collection letter supports your case.

Why Do Law Firms Struggle with the Collections Process?

One of the mistakes law firms often make is considering the collection process only after the client receives the invoice. Instead, the relationship with the client — and the expectation to be compensated — should begin from the first interaction.

Clear, unambiguous language that establishes the fee agreement, what clients are getting for their money, and when they’re expected to pay sets the stage for fewer collections and more invoices paid on time. Also known as a legal billing policy.

In addition, detailed invoices that are easy for the client to understand, and sent in a timely manner, also reduce collections. Some law firms send bills with just an amount due and vague descriptions of what a client is paying for, which can lead to disputes that delay payment.

7 Tips to Improve the Collections Process at Your Law Firm

Here’s how you can improve the collections process at your law firm:

Assess Your Firm’s Current Billing and Collections Process

Having the right systems in place is the first step to ensuring that clients have timely, clear, and accurate bills to pay your firm.

Assess your current billing and collection processes. Do you have a standardized process? Is there a fee agreement that’s clear to clients and well-defined guidelines for your billing policies? Do clients understand what they’re paying for when they’re expected to pay, and what they’re getting in return?

If you don’t already, be sure to create a legal billing policy that answers these questions and any other necessary billing items. You include invoicing timeframe, accept payment methods, late fee policies, and more. 

Identify Areas for Improvement

Once you have an outline for your current billing and collections process, you can identify areas where you can improve. 

For example, if you’re allowing each attorney at your firm to track hours in their own way, review bills individually, and send them out using mail or email as they choose, this could create opportunities for delays and errors that only make the collections process harder.

Create a Standardized Internal Collections Process

Start with a standardized internal collections process that includes time-tracking policies, standard invoicing policies, and a process for how hours are tracked and invoiced.

Up to 30% of billable time is lost because of poor timekeeping. With Bill4Time time tracking, you can quickly and accurately track your billable hours without sticky notes, notepads, or spreadsheets. Capture your time in real time with detailed time blocks that illustrate what your client is paying for.

Bill4Time also standardizes the invoicing process with custom invoice templates that allow you to convert your billable hours to detailed, branded invoices you can send with just a few clicks.

Communicate Your Firm’s Billing Terms to Clients

Having a clear communication plan for your billing expectations should be part of the initial client intake process. With this plan, you should provide the scope of your work, billing timeline, payment options, fee arrangements, and the billing point of contact.

Draft this plan into a legal billing policy document, which you can store in Bill4Time so it’s accessible across your firm and easy to provide to clients.

Accept Multiple Payment Methods

One of the best ways to get clients to pay on time is by making it convenient for them to do so. Clients have come to expect the convenience of paying invoices online, even for their legal services, which you can offer with Bill4Time Payments.

The secure online payment portal processes transactions within Bill4Time, without third-party services or integration. You can reduce missed payments with customizable payment plans, such as weekly or monthly installments, with an eCheck, credit card, or debit card. 

Bill4Time Payments has industry-low transaction fees and 100% compliance with IOLTA, ABA, and state bar guidelines, so you can offer convenience for your clients without it costing extra.

Send Reminders

As we mentioned before, simply sending an invoice isn’t enough. Proper follow-up will keep your firm and the client accountable for ensuring payments are completed on time. By setting up automated payment reminders, you can ensure that your clients know when they’re expected to pay. No more calling or emailing clients to remind them of their upcoming invoices or missed payments.

Track and Measure Your Collection Policy

Bill4Time has built-in expense reporting to track your invoice payment windows and keep tabs on client payment status. You can use these reports to track and measure your collection policy, identify areas for improvement, and get a look into your firm’s financial health.

Outlook on Law Firm Collections

By using these tips, defining your legal billing policy, and implementing modern processes — your firm can streamline the collections process so you reduce A/R and get paid faster.

Think about what makes your firm stand out. Quality of service or a long-standing reputation may come to mind. However, there are thousands of law firms and lawyers that do the same work you do. To increase law firm growth, it’s important to hone in on what sets your practice apart in the competitive legal field. 

With a strong value proposition, you can give your firm the competitive edge that draws clients in and sustains long-term growth. Continue reading to learn how. 

What is a value proposition?

A value proposition is a promise you make to clients about the services you will provide. It’s a persuasive, results-driven argument that gives clients a compelling reason to work exclusively with your firm. Your value proposition should be tied back to your firm’s mission and values. 

A strong value proposition is carefully crafted and very compelling. It’s comprised of four specific ingredients from your client’s perspective: 

• Appeal: What attracts clients to your firm
• Exclusivity: I can’t get this from any other law firm anywhere else
• Credibility: I believe your firm’s claims
• Clarity: I understand your firm’s claims

A strong value proposition is more than “we’re committed to serving you,” but a clear statement of the value your firm can add to your clients’ lives with defined results. 

Double law firm growth with a strong value proposition 

True uniqueness, in the form of a strong value proposition, shapes client perceptions. It helps clients filter and sort through the hundreds or thousands of firms competing for their attention and their dollars. 

Warren Buffett, the legendary investor, coined the term “economic moat.”  He defines an economic moat as the competitive advantage one firm has over its competitors. An economic moat accomplishes two things (1) It enables your firm to dominate the marketplace and (2) It keeps competitors at bay

Let’s dive into the different types of moats: 

• Brand moat. Service clients are willing to pay more because they trust your brand or believe in your reputation. Research consistently shows clients are eager to spend more on brands. Think Coca-Cola, Mercedes-Benz, Skadden, Arps, Slate, Meagher & Flom.
• Secret moat. This typically refers to a process or intellectual property that makes direct competition with your firm difficult. This could be your client lists, a unique approach, a proprietary database, or a unique training methodology. It’s created or developed organically and gives firms a competitive advantage in the marketplace.
• Toll moat. These are firms with exclusive or dominant control of a market or niche. This control means you’re typically the only game in town. Clients must come to you if they want “it.” Google, Comcast, and your internet and utility company are all examples of toll moats. 
• Switching moat. This refers to a firm that’s entangled in its client’s business. There are varying degrees of enmeshment. It can be as simple as being indispensable to your clients or as complex as equity stakes and co-ownership. The idea here is simple. Clients can switch at any time, per their agreement, but doing so is far more hassle than it’s worth.
• Price moat. You’re able to compete via a significant price (low or high) advantage. You’re able to provide clients with a price they’re unlikely to get anywhere else.
• Performance moat. With this moat, you’re able to produce results or outcomes your competitors can’t, and you’re able to do it consistently. You bring your experience, expertise, and knowledge to bear in a way that’s difficult for other competitors to match.

What kind of value proposition do you actually need? To maximize value and increase law firm growth, you need to create impact at two specific levels:

• The firm level: You need to give clients a specific yet compelling reason to work with your law firm. As mentioned previously, your value proposition is a promise. You’ll need to provide clients with a compelling reason to work with your firm.
• The service level: Your firm may be amazing, but what about your associates? Do they produce great work? How do clients know, in quantifiable terms, what they’re getting? A value proposition at the service level answers this question decisively.

For example:

• Developing a unique service process (e.g., hiring all-star associates, litigating, drafting documents, etc.)
• Making a compelling promise, one you’re legally able to make
• Creating a strong, trustworthy brand via consistent advertising, a powerful review profile, and branding
• Creating helpful software, and sharing it with clients free of charge
• Offering add-on services, tools, and resources to create the “golden handcuffs”
• Creating innovative-yet-legal alternative fee arrangements (e.g., fixed fee, subscription, or insurance models)

However, seeing is not the same thing as doing. How do you go about creating a compelling value proposition for your law firm?

Acting on your firm’s value proposition

A strong value proposition doesn’t come from our past, it comes from our future.

Choose the one thing you’d like your law firm to be known for. Whatever you stand for, make sure it’s one thing. Adding in too many services or promises can be difficult to manage and negatively impact quality.

Once you’ve come up with a strong value proposition, test it. A large component of sharing your value proposition is through marketing. There are a variety of simple and low-cost methods you can use to test the strength of your value proposition, including:

• Creating blog content to showcase your thought leadership and expertise
• Posting on social media to connect with your audience and network
• Using targeted advertisements to promote and attract your audience

Once you’ve deployed these methods, you’ll want to have a process in place to track and report on their performance. Based on the results or return on investment, you can determine how clients are responding to your value proposition and pivot accordingly.

While it’s important to define your value proposition and effectively promote it, having the resources to perform your services is essential. Client demands have shifted and the need for digital services is paramount. Bill4Time modernizes law firms by automating core business functions and administrative tasks that traditionally consume their days. With automated legal billing, built-in online payments, invoice templates, and more — firms can streamline repetitive processes so they can focus on areas of their business. 

Outlook on value propositions

A strong value proposition is rooted in your firm’s mission, values, and expertise. Above all, it’s about delivering on your value proposition. It’s easy to say what your firm can do, but clients want tangible results. With a strong value proposition and the right resources — your firm will be well-positioned in the legal market.

It can be an ongoing effort to get clients to pay their invoices faster or even just on time. Clients run on a different timeline than your firm, so they may not understand the moving parts involved in your invoice and billing department.

Before you start placing blame, you need to step back and analyze what obstacles your clients may be facing that are preventing them from paying their invoices on time. The issue could very well lie within your firm’s billing practices or lack thereof.

Continue reading to learn 3 simple law firm invoice practices that support clients to pay their invoices faster.

Get Your Law Firm’s Invoices Paid Faster

If your law firm’s billing isn’t in order, how can you expect your clients to be? Having a uniform, automated law firm invoice and billing process are key to setting your clients up for success.

Step 1: Communicate Your Firms Billing and Invoicing Policy

Create a clear communication plan that outlines your firm’s billing expectations. This should be discussed at the beginning of the client relationship, preferably during the client intake process. The plan should include a scope of work, billing timeline, payment options, fee arrangements, and billing point of contact. Think of common questions you get from clients that can easily be satisfied in your communication plan and build from that. This plan should also be available electronically for the client to reference.

Tip: Upload your legal billing policy document to Bill4Time so it’s accessible across your firm and can easily be sent to clients.

Step 2: Standardize Your Law Firm Invoice Process

Just like you, your clients are busy and can occasionally lose track of deadlines. Understanding that this is human nature, your firm can set up invoice payment reminders leading up to the date. For example, you could send invoice payment reminders 14 days, 7 days, and the day before the due date. Your firm should also send reminders if the invoice is late and any associated consequences or fees.

With a solution like Bill4Time, you can use features such as custom invoice templates and automatic reminders to streamline this process. Not only does standardizing your invoice process keep your clients accountable, but your firm can report on average invoice payment windows and keep a pulse on payment status.

Step 3: Offer Online Payments

Clients don’t want to waste time running to their bank or filling out physical checks. If your firm is still relying on a paper check process, it may be creating more hoops for your client to jump through. For instance, if a client is accustomed to paying online, they may not have checks easily accessible to them.

Bill4Time makes accepting online payment seamless with the built-in payment processor, Bill4Time Payments. Easily send custom payment links on emails or invoices, create payment plans, and even allow clients to pay their invoices from their client portal.

Online payments are not only a form of great customer service, but they will prompt your client to pay faster. Faster payments mean a cleaner billing cycle and increased revenue for your firm.

Streamline Your Law Firm’s Invoice Process

If your law firm is still hesitant to adopt practice management software, you may be limiting your firm’s profitability and creating obstacles for clients. Particularly when it comes to billing, closing unnecessary gaps in the paper check billing process and offering modern ways for clients to pay will ultimately lead to a higher yield of on-time invoices for your firm.

Though LEDES billing has been a common legal billing format for law firms over two decades, it’s not uncommon for lawyers with years of experience to have trouble navigating its intricate formulas.

If a lawyer’s only interaction with the billing process is time tracking, they may not have an understanding of what LEDES billing is or the various LEDES formats. However, for partners, administrators, and lawyers looking to enhance their skill set, a basic understanding of LEDES is essential.

Definition of LEDES Billing Format

Legal Electronic Data Exchange Standard (LEDES) is a billing format created by the Legal Electronic Data Exchange Standard Oversight Committee in 1995. Its purpose is to create and maintain open standard formats for the electronic exchange of billing and other information between corporations and law firms.

Why Do Law Firms Use LEDES Billing Format?

The Legal Electronic Data Exchange Standard Oversight Committee created LEDES as a standard for billing practices for law firms, legal industry software vendors, and corporations. The goal was to have a uniform standard to keep bills simple and straightforward for clients while also preventing lawyers from providing excess information on the invoices.

The LEDES codes, otherwise known as the Uniform Task-Based Management System (UTBMS) codes, were created with these principles:

• Keep the billing process simple
• Make bills unambiguous to reduce questions and confusion
• Allow minimal deviation from existing legal billing formats
• Only require data that law firms can provide from their existing financial systems
• Meet the billing needs of the law firm and the larger legal industry

UTBMS codes classify legal services that the law firm performs and submits as an invoice. There are three types of codes:

• Task codes: These are a granular description of the service provided by an area of law.
• Activity codes: These are codes that identify the specific service performed.
• Expense codes: These categorize expenses for the law firm.

Instead of grouping costs into general areas that can prompt uncertainty, distrust, and disputes, the LEDES billing process relies on specifics. A LEDES file with task and activity codes categorizes costs even further.

For example, a LEDES invoice may have the following UTBMS codes:

• L310 Written Discovery
• L329 Document Production
• L330 Depositions
• A102 Research
• A106 Communicate
• E112 Court Fees
• E115 Deposition Transcripts

This format shows exactly how and where money is spent, relieving the concern of the client and offering opportunities to optimize expenses. For example, you can determine if too much time was spent on a task that could be outsourced or crack down on lawyers taking exorbitant amounts of time on specific tasks.

Benefits of LEDES Billing Format

There are numerous benefits to the LEDES billing for law firms, including:

• Standardized legal billing globally and consistent invoice formats
• Better overview of legal spending, including hourly billing and expenses
• Easier tracking for the legal department
• Lower the risk of receiving invoices in non-standardized ways, such as paper or PDF
• Decreases invoice processing time and payment — law firms get paid faster
• Enables quick access and data reporting on individual line items and details
• Simplifies audits for billing compliance
• Minimize client billing disputes
• Compile invoices accurately
• Capture and present important data to firm stakeholders and clients

The goal with LEDES may have been clarity, but having a standardized process for billing makes the entire system more efficient.

Types of LEDES Billing Formats

The LEDES Oversight Committee created several different LEDES billing format types to standardize e-billing across the legal industry.

• LEDES 1998: This format was created in 1998 to bring a standard billing structure to legal e-billing, but it was later replaced by LEDES 1998B.
• LEDES XML 2000: This format was introduced in 2000 and contains much more information than the 1998 format. It was retired on March 1, 2022, and included 125 data fields with 7 segments.
• LEDES XML 2.0: In 2006, the fields for the XML were increased to 153 and 8 additional segment types were included, bringing the total segments to 15.
• LEDES XML 2.1: In 2008, XML 2.1 was released to accommodate alternative fee arrangements and the varying math that’s used with timekeeping software and third-party e-billing systems. The math logic was standardized across systems with legal e-billing. This version also has more comprehensive tax support and data elements.
• LEDES XML 2.2: In 2020, XML 2.2 was released to support tiered taxes, which increased the segments to 18 and the data elements to 205.

It’s important to note that not all software vendors may offer all format types. When you’re considering e-billing software, look for a solution that accepts the most commonly used LEDES file formats.

How Legal Billing Software Automates LEDES Billing for Law Firms

The legal billing software that works with LEDES format allows you to incorporate automation in the invoice review process and take control of your expenses and spending. Bill4Time legal billing software allows lawyers to track time and manage billing, and automatically generate invoices that incorporate the LEDES format according to the exact specifications of the LEDES billing system.

The process is streamlined — all you have to do is input the specific data for the LEDES format, including:

• Tax ID information
• LEDES Timekeeper ID and LEDES Classification
• Task and activity codes
• Timekeeping hourly rate
• Bill delivery method
• Client LEDES IDs
• Delivery email addresses
• Client matter IDs

With intuitive legal billing software like Bill4Time, you’re guided through the processes to ensure compliance with LEDES formatting. 

LEDES can be complicated to work with, especially if you’re doing it manually. E-billing and law practice management software offers the support you need to track and export invoices in the correct formats.

For staff compliance, you can enable LEDES in the system settings and turn it on or off for each client. There are LEDES-specific fields that help with exporting the data into the LEDES billing format that’s appropriate.

Standardize Your LEDES Billing

Billing in LEDES ensures that your law firm is compliant and following the standardized conventions for timekeepers, tasks, and processes. When you have the data you need, you can boost productivity, increase utilization rate, and eliminate revenue leakage

When you become a lawyer, you might not think about all the legal accounting that goes into a successful firm. From handling trust accounts to capturing the revenue you earn, legal billing is essential — but it might seem like the homework your firm is putting off. Every law firm needs to get paid for its services, and billing software is one of the easiest ways to ensure that happens. 

If you’re ready to spend less time staring at the books and more time on your cases, you’re in the right place. Find out how to streamline your billing with this guide to adopting legal billing software. 

What Is Legal Billing Software?

Legal billing software can help you automate the process of tracking your hours, sending invoices, and managing all other billing tasks — with one comprehensive suite of tools. 

With legal billing software, you can:

• Set up custom invoice templates
• Track your billable time
• Automate invoice distribution
• Manage trust accounts, including balance checking and handling retainer payments
• Use financial reporting tools to assess your performance
• Enable clients to pay you online

Of course, all legal billing software comes with unique features. So before making the investment, review your options and ensure that you’re choosing the software with the necessary functionality.

Legal billing software platforms, like Bill4Time, are cloud-based, meaning that the software runs online outside of your firm’s IT infrastructure. This gives firms the ability to access their cases from any device and often comes with lower costs.

Does My Law Firm Need Legal Billing Software?  

If your firm wants to automate and streamline your billing, the answer is yes. Many large and small firms can see significant benefits from the transition to legal billing software. 

With legal billing software, you can see benefits like:

• Reduce time spent on billing. This is one of the biggest perks. With less time dedicated to tracking your hours and expenses, you can devote more time to handling cases. 
• Improved revenue capture. If you have a better, faster way to report your hours and invoice clients, you can see fewer outstanding accounts.
• Increased client happiness. When clients have an easy, convenient, and straightforward way to pay you, they have a better experience.
• Better staff experience. Your staff’s morale matters as much as your clients’ happiness. If your attorneys, paralegals, accountants, and other staff have better systems to do their jobs, they’re more likely to appreciate their work environment. 
• Greater access to financial analysis tools. Some legal billing software comes with built-in custom reporting features. That gives you the power to get quick insights into your firm’s financial performance over time and project where you’ll be in the future.  
• Enhanced compliance. No one wants to let mistakes or oversights compromise their practice. Bill4Time’s built-in payment processor, Bill4Time Payments, can help your firm stay compliant with ABA, IOLTA, and state bar guidelines.

You might think of it this way: Your firm runs certain risks if you don’t invest in tools to help you become more efficient, capture revenue, and remain compliant. After all, if you’re the average law firm, you could face many common issues with billing — and these problems could leave you in financial and ethical high water. For instance, you may be double-billing or failing to capture your actual billable hours. 

How to Adopt Legal Billing Software  

When you’re starting to consider bringing on billing software, you’ll want to think through what it means to implement new software. 

Assess Your Firms Needs

Some legal billing systems will work better for your needs than others. Be sure to review the software to ensure it offers the following:

• The features and functions you need
• Compatibility with your existing software

As mentioned previously, legal billing software can include many features. Determine what’s most important for your needs. For instance, you should ensure that the software you choose includes financial reporting tools or integrations with other legal software. With some legal billing software, you can integrate other legal software, such as case management tools, to create a seamless ecosystem for productivity. 

With that said, you’ll want to invest in billing software that syncs with your existing software. So, if you’re currently running QuickBooks for accounting, purchase software that works with those tools. 

Have Standard Processes in Place

When you’re getting ready to transition to new legal billing software, it’s worth ensuring that all your billing systems are in ship shape. Make sure that your firm: 

• Has a clear fee structure outlined
• Establishes clear legal billing guidelines
• Prepares to set up invoice templates
• Has a plan for invoice review and client follow-up for late payments

If you don’t already have clear billing guidelines, you’ll want to set that up. Your billing guidelines should include how often you bill clients, what you include in invoices, and how you communicate with clients through invoicing. 

Once you determine your billing guidelines, you can also automate many of these standard processes and procedures. Legal billing software allows you to set up when your clients receive invoices, use custom invoice templates, and more.

Prepare to Train Your Team

Of course, ensuring your staff is prepared to work with new software is crucial to your adoption process. Be ready to train any team members who will interact with the billing software. It’s critical to ensure everyone is on the same page and understands any best practices you establish for using these tools. 

Identifying the Best Legal Billing Software 

Beyond ensuring that your chosen legal billing software plays nicely with your existing software, you’ll want to consider your goals, the features you need, and which will be best for your firm.

Some of the most significant decisions that you’ll have to make when you choose the best software for you include:

• Price. Legal billing software comes with a range of prices. Most of the leading cloud-based billing software is priced monthly per user. You can typically also choose between several pricing tiers and select the product capabilities you need.
• Features. The sky’s the limit for the features available in billing software, with everything from time tracking to billing and invoicing to custom invoice templates. Review the software’s capabilities and choose what’s best for your needs.
• Payment function. Some legal billing software programs allow clients access to an online payment system. If you want this feature, look for ePayments or check out how clients can pay with a card, check, or even payment plans.
• Legal software integration. As mentioned, legal billing software can integrate with other legal software tools. However, not all legal billing software offers this functionality. Look for how a company’s legal billing tools work with case management or other software.
• Ease of use. Of course, if it’s not easy to use, you may not feel the benefits of your investment. If possible, try a demo to be sure this software is simple and powerful.

Legal Billing Software by Practice Area 

Legal billing software is an essential resource for managing a law firm’s business, no matter the size. 

For a solo practice, you may have a limited budget for accounting help — and that’s where legal billing software comes in. With automated invoicing tools, you don’t have to worry about when to send bills to clients and who hasn’t paid you. And with compliance features, you can rest assured that you aren’t overlooking details that can be hard to spot with one or a few pairs of eyes.

With small- and medium-sized firms, you may work with more resources and a larger budget for your accounting needs. Still, you can find many uses for legal billing software. Your staff can make more of their time instead of wasting needless hours jumping from QuickBooks to invoice tools to the printer and back again. Instead, your team can use the time you save on accounting to focus on boosting productivity, driving revenue, and optimizing your clients’ experience.

Implementing Legal Billing Software

Investing in legal billing software can pay off in more ways than one. It allows you to improve your firm’s efficiency, offer a better payment system for clients, and gain insights into your firm’s financial well-being. Legal billing software lets you dedicate more time to the things that matter most for your practice. 

If you’re ready to practice more, manage less, and stay competitive, Bill4Time can help. With time and expense tracking, custom invoices, and a full suite of legal software integrations, Bill4Time can help your team streamline your accounting systems. Get a free trial of Bill4Time’s legal billing software today and find out how adopting legal billing software can benefit your practice.

Is your staff dragged down by tedious tasks? Despite your firm’s efficiency and hard work, you and your staff have only so much time in the day to complete everything on your plate. If you’re spending too much time on administrative tasks, you’re not devoting enough time to the important stuff, like helping clients, practicing law, or growing your firm.

Many law firms face this predicament, so they turn to outsourcing legal services.

When you outsource, other businesses take on tedious tasks, such as document and task management or billing and invoicing. Some firms turn to technology like Bill4Time to “outsource” their firm’s most time-consuming tasks like case management or billing.

Law firm outsourcing saves you time and money so you can boost your firm’s productivity and direct more of your resources and energy toward clients, cases, and growth. 

What Is Legal Service Outsourcing?

Legal service outsourcing is when law firms hire other professionals and companies to take on some of the attorneys’ duties. This way, they can save time and money, allowing them to focus more on their client’s needs and improve their services and reputation.

Some tasks law firms outsource include:

• Administrative tasks, like scheduling, issuing invoices, and recording time entries
• Document management, like organizing client files and uploading important information
• Marketing, like responding to client comments and reviews or creating email marketing and social media posts

What you want to outsource is up to you. Your firm can analyze where you commonly see bottlenecks, missed opportunities to get cases, and more to determine what you need help with most. Additionally, the businesses that handle these tasks can customize how they serve you.

How Often Do Law Firms Outsource Legal Services?

Law firms are outsourcing legal services, and that trend is only on the rise. In 2021, a Reuters survey of small law firms found that 26% of respondents had implemented technology to address pressures and improve their services’ efficiency. Additionally, 19% want to use technology more to outsource and improve some of their firm’s operations. 

More law firms are looking into optimizing their services as they realize they need more support with payroll, case research, and billing. In a short time, the practice of outsourcing legal services will likely expand significantly.

Is Legal Outsourcing the Same as Offshoring?

The short answer: No.

However, they do relate to each other. Legal outsourcing occurs when you contract a specific task or tasks to a third party that works in that field. For example, if you need help with setting up your billing and invoicing templates, you would hire a company that offers specific aid in that area.

On the other hand, when you participate in offshoring, you’re sending your in-house jobs overseas to complete your work remotely—at times, for a lesser cost. For instance, if you’re in the United States and want assistance with producing high-tech devices, you may offshore this work to reduce labor costs. 

Benefits of Legal Service Outsourcing

Hiring a team for legal service outsourcing comes with plenty of benefits, including:

• It’s cost-effective: Generally speaking, it’s cheaper to have someone who works outside the law firm complete certain services for you. That is, it can help keep your overhead and staffing costs on the lower end.

• Supplement your systems when your resources are limited: Sometimes, law firms don’t have the necessary technology to complete certain tasks. For example, you may not have a system for timekeeping. Outsourcing your services to another company that has a program designed for timekeeping can save you time and money, as you won’t have to dedicate extra hours to handle it on your own.

• The ability to support more clients: When you’re preoccupied with menial tasks for much of your day, it can take time away from your clients. As a result, your brand and reputation may take a hit, especially if your clients are overcharged, or you lose their information.

Types of Legal Service Outsourcing Processes

Legal services outsourcing isn’t limited to one type of process. Depending on what your firm needs, the company may tailor its services to how your firm operates. Typically, law firms may seek assistance with:

Billing

Inform the company about the payment structure you use. Flat fees? Hourly? Contingency? 

Whatever the case, the company to whom you outsource can create and customize an invoice template and set up the terms for online payments and late fees.

This feature allows the client to pay you with one click. That way, it’s convenient for the client, and you receive your payment right away.

Filing and Document Management

Uploading documents into a cloud-based system allows you and your staff to easily access data and other controls at any time. That way, you don’t spend hours remaking documents and searching for client folders.

If you need to move things around, rename, or customize documents, you can. These features should be flexible and mesh with your firm’s current needs.

E-Discovery

Thanks to e-discovery technology, law firms can easily identify and collect important data for cases. Not to mention, e-discovery can help you with your document management, such as scanning your uploads.

It makes these documents more accessible to their clients and saves their memory and time.

Administrative Tasks

Legal services outsourcing can also take care of your administrative tasks. The contracting company can manage aspects of your client relationships, bookkeeping, timekeeping, and even phone calls.

You don’t need a full-time employee to be responsible for these tasks when someone else outside your firm can perform them for a fraction of the cost.

How to Hire for Legal Service Outsourcing

If you’re looking for legal consultants or freelance workers to assist you with your legal services, check out these websites:

• Lawyerist
• Fiverr
• Guru

While you’re searching for the right fit, think about the qualities that will add to your firm’s success, like:

• Experience: How long have they been in the business? What was their training like? Who have they worked for?
• Skill: What are they capable of? How much of a workload can they handle? What do they prioritize at work? Do they have any specializations or certificates in certain areas?
• Familiarity with legal technology: Many contractors continue their education to keep up with the latest technology. Have they listed what they have expertise in? For instance, see if they know how to manage legal billing and invoicing, timekeeping, and task management using legal software.

Narrow down your top two or three favorite candidates. Don’t just consider their past but also their potential.

When Should I Consider Outsourcing the Legal Services at My Firm?

If you’re not sure if you should look into legal process outsourcing services, reflect on the well-being of your firm.

You may want to consider the extra help if you’re experiencing:

• Overwhelming caseload: If you’re taking on more than you can handle on your own
• Decreased client experience: If you’ve received client complaints, especially about errors in their invoices or lost documents
• Tasks falling through the cracks: If you find yourself putting off sending invoices, uploading client documents, or reminding your clients to pay you

Simplify Outsourcing With Legal Technology

You don’t have to take care of all your practice’s tasks on your own. Help is available, and it doesn’t have to be complicated. Don’t be intimidated about having someone work remotely for you. You can easily manage their tasks, especially when your firm’s most crucial documents, billing records, and customer information is housed in a central location.

When you have Bill4Time on your side, you can outsource many time-consuming legal services—like billing, invoicing, timekeeping, and other tasks—using a single software system. It’s easy to use, efficient, and affordable. That way, you spend less time dealing with tedious tasks and focus more on your clients. Request a demo with us today.