Many factors come into play with law firm billing and if you don’t have efficient processes in place it can become a major headache to manage. From accurately billing time, managing client expectations, and monitoring collections, it’s easy to get overwhelmed.
In this blog, you will learn the best practices to improve your billing practices, set clear expectations for clients, and ultimately, get them to pay your invoice faster and in full.
Why clients refuse to pay your invoice in full
A client’s refusal to pay is often due to a failure to manage expectations – assuming that they intended to pay your invoice at all in the first place. Our clients have fuzzy, implicit, and unrealistic expectations. A study on managing customer expectations outlined the differences between these client expectations as it pertains to service providers:
- Fuzzy expectations. Your clients expect an outcome or result, but they have no idea what this looks like (i.e., your invoice will be reasonable – what’s reasonable?). Fail to flush this expectation out, and clients blame you, stating your representation or service was unsatisfactory.
- Implicit expectations. Your client has an expectation they believe is obvious or self-evident (i.e., I think $5,000 is a reasonable amount to pay – they have a dollar amount in mind, but they assume you already know and agree). Implicit expectations are dangerous because they become explicit when they’re ignored; your clients blame you for this as well.
- Unrealistic expectations. These are expectations you’re either unable or unwilling to meet (i.e., if you want to be paid, you’ll win my case). Here’s what makes this type of expectation so unpleasant: it can be fuzzy or precise, implicit, or explicit.
Managing your client’s expectations is the key to prompt and complete payment. Here are some common strategies you can use to get your invoice paid in full.
- Disqualify delinquent clients. You’ll want to remove problem candidates from consideration. These clients produce 20 percent of your income and 80 percent of your headaches. If they take time away from other, more profitable clients, they may not be a good fit for your firm.
- Provide service estimates. Depending on your practice area, you can provide your clients with estimates that set minimal, moderate, and maximum budget amounts. This information gives clients control over the amounts they’re willing to spend to get the outcome they want.
- Negotiate your client’s billing guidelines and expectations ahead of time. Work to map important elements that require client permission/approval, are forbidden or unacceptable, or flag your invoice for review (i.e., stop words).
- Follow billing guidelines. Once you and your clients have agreed on your billing guidelines, follow them to the letter. Doing this bolsters trust, decreasing the likelihood of a flagged or delayed invoice.
- Use contemporaneous time tracking. Automatic time tracking is a must-have for attorneys. Many attorneys still rely on reconstructive billing, which is a disaster. Firms can lose as much as 50 percent of their revenue due to reconstructive timekeeping.
- Shepherd invoices through an eBilling system. If your estimates are conservative and there’s a special emphasis placed on accuracy, your pre-bills will be close to the final bill. This attention to detail reduces the need for discounts, write-downs, and write-offs. It also gives you the chance to catch billing issues and missed requirements before your client flags them.
- Automate client reminders. Don’t waste your billable hours chasing clients to pay an invoice. Automate the process by setting up reminders, in-app messages or emails that are triggered when a client hasn’t paid or a payment is coming due soon.
- Resist the urge to discount or write-off your time. Treat your timesheets like inventory. Remember that each line item on your invoice is a unit of revenue. Every improvement you make to the quality of your timesheets/invoices improves the acceptance and collection realization rates for your firm.
- Submit invoices on time. Your law firm billing department can get busy but it’s important to stick to the schedule you outlined with your client from point #4. If your client is anticipating an invoice and it’s delayed, it can be easy for other things to pile up and distract them.
- Offer online payments. Your clients are used to the convenience of paying online and it’s the easiest way to get them to act. On average, clients are 70% more likely to pay your invoice in full faster if an online payment option is available. Online payment processors like, Bill4Time Payments, allow you to offer secure, compliant ePayments to your clients with one click.
Clients will pay your invoice in full
It’s important to remember that your clients value your services and want to pay you. Just like busy attorneys, clients can get consumed with their day-to-day.
Automating your law firm billing is one of the best strategies your law firm can use to take the stress out of collections. Advancements in legal technology allow law firms to manage their billing, time tracking, clients notifications, payment processing and more in an easy-to-use platform.