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Billing hours effectively is a crucial skill in the legal field, directly impacting both a firm’s profitability and an attorney’s career progress. The goal of this guide is to offer grounded, actionable advice on how lawyers can better manage and maximize their billable hours. 

Drawing on the expertise of seasoned legal professionals, this blog will offer insights that cover the major frustrations in legal billing today. We’ll cover topics like:

• Understanding billable hours
• Effective billing practices and tips
• Increasing your billable hours
• Cutting down on non-billable hours
• Setting realistic billable hours targets
• Using legal time tracking software

By leveraging these proven tactics, our guide aims to empower you with the knowledge that can transform how you manage your billable hours, setting the stage for enhanced efficiency and success in your legal career.

How Are Billable Hours Charged?

Lawyers charge billable hours by logging the time spent on client work and multiplying these hours by their hourly rate, usually using 6 or 15-minute increments to ensure precise billing. This detailed method helps maintain clarity and fairness in billing, which is critical to building trust and maintaining professional client relationships.

For instance, consider an attorney who spends three hours and ten minutes drafting a contract. If using six-minute increments, they would log this time as 3.2 hours. At an hourly rate of $300, the charge for this task would be $960.

This method ensures clients are billed fairly for the exact amount of time spent on their case, while attorneys receive appropriate compensation for their skilled services. By keeping detailed records of the time spent on various tasks, firms can provide transparent invoices to clients, highlighting the value delivered in each segment of the legal process.

How Do You Bill Hours Effectively?

Effective billing practices are foundational for maintaining both profitability and client trust. Here are insights and methodologies that even seasoned lawyers can use to refine their billing processes:

1. Enter Your Time Immediately

Enter your billable hours as soon as you complete a task to prevent underreporting. For instance, if you draft a legal brief and then immediately log the time spent right after, you can capture all the time you spent and not accidentally forget it or underestimate it later.

The American Bar Association (ABA) notes that if you wait until the end of the week to enter your billable hours, you’ll lose about 25% of your time. So, as you can see, entering your time as soon as possible is vital to ensuring no lost hours and meeting billable hours goals. 

2. Breakdown Each Task

Instead of block billing, where multiple tasks are lumped into a single time entry, itemize each activity. 

For example, rather than entering “Draft and review contract, correspond with client, revise filing – 4 hours,” break your description down further: “Draft and review contract – 2 hours; Email correspondence with client regarding contract specifics – 1 hour; Revise filing according to client feedback – 1 hour.” 

This clarity helps clients understand the value delivered at each step and can help mitigate disputes.

3. Use Legal Billing and Timekeeping Software

79% of law firms use legal technology specifically for billing purposes, acknowledging the significant time and headaches this software saves.

For example, Bill4Time’s interface lets you enter time from desktops, tablets, or mobile devices immediately after completing tasks. You can use the timer feature to time your tasks or manually enter time. It also supports multiple billing rates, which can be tailored for different clients or tasks, allowing nuanced financial management within diverse cases.

You can also create detailed invoices that clearly communicate the value you’ve delivered, enhancing transparency and trust with your clients. As a bonus, you can automate invoice follow-ups for clients who haven’t paid, ensuring you get paid promptly. These are just some of the many features legal software offers to support your billable hours practices.

See how Bill4Time works with a free trial (no credit card required).

4. Don’t Forget to Bill for Short Tasks

When handling client communications and other brief yet frequent tasks, it’s crucial to recognize each contribution to a case, no matter how small. As you tackle daily emails or quick client updates, diligently record these efforts immediately. 

For instance, if you spend about five minutes each day responding to emails on a particular case, log these individually in your timekeeping software right after completion. Your clients will appreciate the transparency this method provides, seeing a detailed account of how their legal services are being rendered day by day. Plus, it ensures you are paid fairly for all the time you dedicate to a case.

Think about it this way — say you send three emails a week in one case over the course of a year, and each email takes you about five minutes.  That’s 15 minutes per week, which translates to roughly 13 hours annually just for these emails. If you’re billing at a rate of $300 per hour, not logging these short tasks means missing out on approximately $3,900 over the year.

As you can see, these small tasks add up quickly, so be diligent about recording them as they happen.

5. Optimize Your Billing Descriptions for Better Client Understanding

When detailing your billing entries, specificity can significantly enhance client understanding and satisfaction. Instead of a generic entry such as “document review,” take the extra step to specify which document you reviewed and for what specific purpose.

For instance, instead of just listing “Reviewed contract,” expand to “Reviewed employment contract for compliance clauses and potential liabilities.” This description clarifies the precise nature of the task and highlights your thorough approach and expertise, justifying the time spent on each task.

Remember, clear and comprehensive billing descriptions can lead to fewer questions from clients regarding the nature of billed services and facilitate smoother invoice approval processes. This practice also aids in quicker payments and reduces disputes, enhancing the client relationship.

6. Regularly Train Staff on Billable vs. Non-Billable

Understanding which activities count as billable versus non-billable is vital for the financial health of your law practice. Conduct regular training sessions to outline and update these definitions based on current laws and firm policies.

For example, drafting correspondence directly related to a client’s case is billable because it directly contributes to their legal representation. In contrast, time spent on general administrative tasks, such as organizing client files or scheduling appointments, does not typically count as billable unless specifically agreed upon with the client under certain conditions.

7. Negotiate Billing Terms Upfront

Clearly discuss, agree upon, and put into writing what will be billed and what will be off the record with your client before beginning work. For instance, deciding that all communication will be billable unless purely administrative prevents misunderstandings about charges for emails and calls.

It’s also wise to outline how you will handle expenses related to the case, such as filing fees, document retrieval fees, or even travel expenses. Specify whether your firm will absorb these costs, pass them directly to the client, or bill them separately. For instance, you might decide to bill for travel time only when it involves out-of-town proceedings or client meetings that require significant time away from the office.

8. Time Your Invoices at the Right Moments

It’s best to time your invoices to coincide with moments when the client values your service the most — perhaps right after a major court victory or upon delivering a crucial set of documents that significantly advance their position.

Sending an invoice during such a high point increases the likelihood that your bill will be settled swiftly as the client’s satisfaction with your service peaks.

Additionally, align your billing with your client’s payment cycles. By scheduling invoices to arrive just before their financial review periods, you can reduce the waiting time for payments. For example, if your client typically processes payments on the 1st of each month, aim to have your bills reach them by the 24th. This practice ensures your invoices are at the top of the pile, ready to be processed first. 

9. Offer Multiple ePayment Options

In a recent ABA survey, 40% of clients admitted that they would never hire a lawyer who doesn’t accept credit and debit cards. Clearly, offering electronic payment options is basically a requirement to thrive in today’s digital age.

Plus, facilitating electronic payment options can significantly speed up the payment process. For example, a system like Bill4Time Payments, native to Bill4Time legal software, streamlines the payment process by linking billing and payment functions into a single platform. You can easily send clients payment links via an email, text, or the client portal, allowing them to pay invoices directly through the interface where they review their billing details.

10. Automate as Much of the Billing Process as You Can

Automating elements of your billing process is an effective strategy to ensure timely and accurate billing. Within platforms like Bill4Time, certain automation features can significantly reduce manual entry and minimize errors. For example, you can set up recurring billing for ongoing cases, which automates the invoice generation process based on a predefined schedule.

Another practical use of automation within Bill4Time is the automatic late fee calculation. If you’ve ever wondered how to calculate billable hours with late fees, Bill4Time can do the heavy lifting for you. If an invoice goes unpaid past its due date, the system can automatically apply a predetermined late fee. This process incentivizes timely payments and maintains cash flow without the need for manual monitoring. 

How to Bill More Hours as a Lawyer

Maximizing your billable hours not only boosts profitability but also reflects the true extent of your efforts on behalf of your clients. To enhance the effectiveness of your billing practices, consider these tailored strategies that complement the rigorous demands of legal work.

• Prioritize self-care: Maintaining work-life balance is essential for lawyers to prevent burnout. For example, research by Christina Maslach, a well-known psychologist, emphasizes the importance of enhancing social support at the workplace, such as creating mentorship programs or peer support groups to provide emotional and professional support.
• Batch similar tasks: Organize your day by grouping similar legal tasks, like reviewing case files or drafting related legal documents. This process minimizes context-switching and promotes deeper focus.
• Limit non-essential meetings: Consolidate your meeting schedule to only meetings directly impacting client outcomes or case progression. Implement succinct, agenda-driven meetings to maximize efficiency.
• Regularly update case progress: Keep your clients informed with frequent updates. These updates build trust and justify the ongoing work and associated costs, particularly during prolonged cases.
• Monitor your productivity: Use software that tracks how much time you spend on different tasks. This technology helps identify less obvious billable tasks and ensures accurate billing for brief client consultations or quick legal research.
• Set clear daily goals: Aim to meet a daily minimum of billable hours. Setting tangible goals can provide motivation and help you maintain a steady pace, reducing the risk of underutilizing billable hours.
• Capitalize on cross-practice expertise: When cases intersect with other legal specialties — like a divorce matter involving a real estate transaction — offer to manage these aspects. This practice broadens your billable hours and enhances client service by providing comprehensive legal guidance.

Remember, consistency in billing more hours is as important as increasing the number of hours billed. By staying vigilant and proactive, you can significantly enhance your productivity and ensure that your billing practices keep pace with your professional output.

How Can I Reduce Non-Billable Hours?

Every attorney faces the challenge of implementing non-billable hours best practices. Reducing these hours can dramatically increase your efficiency and overall profitability.

A first and crucial step is to clearly define billable vs. non-billable for your firm. What counts as non-billable hours, exactly? These tasks include:

• General clerical work (filing, photocopying, etc.)
• Travel time not specific to a client’s case
• Training sessions for new software or procedures
• Internal meetings not related to client-specific cases
• Organizing physical or digital files
• Scheduling appointments
• Managing non-billable employees
• Volunteer legal services
• Routine email checking not specific to client cases
• Preparing and delivering internal presentations
• Time spent on billing and invoicing
• Office management tasks
• Reading and responding to general professional correspondence
• Website updates and marketing content creation
• Employee reviews and HR activities

Additionally, consider tracking your non-billable time along with your billable time. Software like Bill4Time allows you to track both, giving you comprehensive insights into exactly where your time is going. From there, you can make adjustments like reallocating resources or further training for junior staff on tasks like preliminary research, allowing senior lawyers to dedicate more time to complex, billable work.

How Many Billable Hours Are Realistic?

The number of billable hours can vary widely depending on the type of practice, the firm’s size, and the individual lawyer’s role within the firm. Let’s break billable hours down a bit further below.

How Many Billable Hours Are Realistic in a Year?

Recent research from the National Association for Law Placement (NALP) shows a general increase in both total hours worked and billable hours across various firm sizes. 

For instance, in larger firms (701+ attorneys), average billable hours rose from 1,817 to 1,873 over a year, reflecting an increase in workload and possibly efficiency improvements or increased client demands. 

Smaller firms (101-250 attorneys), however, reported virtually unchanged billable hours, averaging around 1,752 to 1,757 annually. This suggests that smaller firms may have more stable year-over-year billable hours expectations.

How Many Billable Hours in a Month?

Translating the annual data into practical targets monthly, attorneys in larger firms might aim for approximately 156 billable hours (based on 1,873 annual hours), while those in smaller firms should consider around 146 hours monthly (based on 1,752 annual hours). 

How Many Billable Hours Are Normal for a Week?

Weekly, the data indicates that lawyers should target around 36 to 39 billable hours to meet the higher end of the annual spectrum observed in larger firms. For smaller firms, aiming for about 34 to 36 hours per week aligns with their yearly averages.

This breakdown can help you plan your workload more evenly throughout the year and manage your time effectively.

How Do You Master Billable Hours? With Bill4Time

As you implement these billable hours best practices, consider the benefits of leveraging a specialized legal billing platform like Bill4Time. This software eases the complexity of tracking and logging billable hours and improves the way you manage invoices.  

If you’re a legal professional striving to hone your billing methods, it’s time for Bill4Time. Start with a free trial and see the positive impact on your practice’s efficiency and financial outcomes.

Legal professionals are always up against the clock — there’s always more that can be done in a day, but not enough time to do it all. As a result, many lawyers just put in the time instead of finding more efficient methods, like using legal time tracking software.

Some of the most common challenges law firms face are time wasted on administrative tasks, new client acquisition, cost control, and expense growth. Many of these time-consuming tasks can be automated with modern legal technology. As an industry that bills by the hour, these inefficiencies can mean significant revenue loss.

Lawyers do a lot of work on computers, so adopting modern technology practices only makes sense. Time tracking software can run in the background to properly track time and improve law firm processes.

Here are 6 advantages of digital time tracking for lawyers.

1. Tracking Potential Lost Revenue

Automated timekeeping tools take a lot of the error, stress, and — ironically — time out of the tracking process. These solutions can track both billable and non-billable hours, so lawyers can see where they’re losing valuable time on unrelated tasks that impede the workflow.

Data is important for improving law firms as businesses. For example, a lawyer charging $200 an hour may forget to bill for an hour’s worth of small tasks each day, which is $200 lost in a day. Assuming that happens at least once a week, that’s a potential loss of over $10,000 a year! Digital time tracking can ensure that this time is billed and paid for for more accurate revenue.

2. Revealing Inefficiencies

Legal time tracking software not only tracks the billable time that isn’t billed, but it reveals what lawyers spend their time doing. Many law firms have lawyers spending time on non-legal business activities, such as marketing, accounting, and administration.

If the digital time tracking shows a lot of time spent on non-billable activities, leading to a loss of revenue, a law firm can outsource those activities. For example, law firms can hire an accountant, administrative assistant, or marketing professional for in-house work, or delegate tasks to contract workers during busy periods.

Attorneys can also use legal technology solutions for automating more tedious tasks, like electronic payment processing and bookkeeping services to generate invoices. Ideally, law firms will choose software specifically designed for legal professionals to maintain compliance with rules of professional conduct.

3. Improve Billing Accuracy

Lawyers at both boutique and large law firms typically bill by the hour, but the time spent on client cases doesn’t always consider face-to-face meetings with defined timeframes or scheduled phone calls that run over.

Proper time tracking and billing must include the time spent on tasks like:

• Telephone calls
• Case research
• Emails
• Lead follow-up
• Witness interviews
• Trial preparation
• Travel to and from meetings

Without clear and organized time tracking, lawyers may struggle to create accurate timesheets. This not only ensures that lawyers are billing for all their time but offers a detailed invoice for transparency and trust with the client.

4. Mobile Access

On-the-go lawyers struggle more with timekeeping, but legal software solutions offer mobile apps to help with tracking time outside of the firm. Many legal software solutions have corresponding mobile apps, which are perfect for on-the-go lawyers. Depending on the nature of a case, a lawyer may be running between the courtroom, the law office, lunch meetings, or the library for research.

Whether in the office or in the field, timekeeping apps track hours accurately and update in real-time in a secure, centralized cloud database.

5. Customizable Reporting

Different law firms face different challenges with efficiency and accuracy, so a one-size-fits-all approach may not work. Digital time tracking solutions offer customizable reports to pull data and view it in simple visualizations for managers and team members to interpret.

Managers can view just about any aspect of the firm’s performance, including work-in-progress, outstanding balances, time spent with a specific client, all calculated by user, client, or project.

6. Time-Saving Features

Legal time tracking software offers many features to improve efficiency and workflow, such as:

Automated timers that allow users to start and stop time, rather than tracking it manually. Meetings run over and people forget to stop the clock, so having a legal time tracking software ensures that the tracking is as accurate as possible. Some systems also allow tracking multiple tasks, so users can easily stop tracking time for one task and toggle to another quickly and easily.

Voice commands allow users to stop or start timers without needing to be near the computer. Most people speak faster than they type, so having voice commands captures time quickly and easily. Entries can be edited and synced to client management systems as well.

Built-in payment processing, which is included with Bill4Time, can save your firm time and money while other software systems use integrations or costly third-party software. If a law firm devotes a lot of time to billing and processing without a dedicated accounting process, having these features makes the processes smoother and more efficient.

Customization features that allow lawyers to create detailed reports and invoices for consistency and continuity. Personalized reports offer virtually limitless options for time and billing data, all with custom filters and optional views to get a holistic picture of the firm’s operations.

What Is the Easiest Way to Track Time as a Lawyer?

Legal time tracking software is the best way to track time as a lawyer. Implementing timekeeping solutions, like Bill4Time, helps law firms identify inefficiencies, choose tasks to outsource, track individual lawyers’ time, and bill clients accurately for better revenue and success.

Digital time tracking for lawyers offers limitless options for efficiency and accuracy. Bill4Time offers legal technology solutions for legal professionals to track time, manage clients, track expenses, and more. Schedule a demo today to see how digital timekeeping solutions can help!

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.

The legal invoice process can be a headache for many law firms. From managing different accounts and payment deadlines to ensuring the time tracking is accurate and the invoice reflects different fee structures, it is difficult to imagine a frictionless version of this workflow. Thankfully, automated legal billing software has made this process seamless for all-sized law firms.

This blog post will further explain how to create a custom legal invoice template and the benefits for your firm. 

How Do Lawyers Track Their Time?

The ways legal professionals track the time spent on a case have evolved over the years. Traditional practices included: 

• Filling tasks and time entries directly in their calendar;
• Cross-checking the time-stamp of a sent email; 
• Monitoring the time spent working on a document; 
• Tracking the history of phone calls; 
• Excel sheets listing their daily activities; 
• Or simply writing down by memory how they spent their time throughout the day or week. 

Though traditional, these strategies have hidden flaws. Besides being inefficient and time-consuming, the human aspect leaves room for error. Today, there are several legal billing software, such as Bill4Time, with time tracking features and additional functionalities that have widespread benefits for firms.  

By using a legal time tracking software like Bill4Time, a lawyer’s hourly rate can be broken down into specific billable slots that can be easily justified on behalf of the client. Automated time tracking also saves time trying to record hours and allows for greater accuracy as a few minutes of responding to an email can be easily captured. 

When Does a Lawyer Bill for Their Services?

Lawyers will generally invoice a client once a month during representation or when their representation is complete. This can vary based on the practice area and the nature of the service. 

For example, in matters involving litigation, attorneys might bill for services at specific stages, such as after the initial pleadings, following major motions, or at the conclusion of a trial. Each of these stages represents a significant amount of work, and billing at these intervals helps manage the financial expectations of both the lawyer and the client.

Some attorneys may offer alternative billing arrangements to meet client needs. These can include flat fees for particular services, retainer agreements for ongoing matters, or contingency fees, where the lawyer’s payment is a percentage of the client’s winnings in a case.

Communicating the billing timeline and policy to a client upfront is essential to mitigating common billing mistakes and unhappy clients. Plus, no one likes receiving an unexpected hefty bill. 

How To Create a Custom Legal Invoice Template

Law firms have unique yet complex billing needs. To address this reality, legal invoicing software has emerged across the market. These resources are an indispensable piece of any firm’s tech stack as they address the complex nature of legal billing. 

Bill4Time comes equipped with features to manage all aspects of the invoicing process. The platform allows you to create custom invoice templates that can be stored for repeated use. 

Invoice templates reduce administrative work as your details, hourly rates, client information, and payment method are included in the invoice. You can also customize the invoice templates to your firm’s brand. Lastly, they can also be used to automate recurring invoices, all while keeping the process professional and organized.  

What Is Included in a Legal Invoice Template?

There are a few common items that are always included in a legal invoice template:

• Contact information: Both the law firm and the client’s contact information should be clearly listed in the heading of the invoice. This includes the company name, their point of contact’s first name and last name, a phone number, an email, and an address. 
• Send date: The date on which the invoice was created and sent should be indicated for accounting purposes, but also to keep in account the payment terms. For example, if the payment is due 30 days after receiving the invoice, the date indication will help better identify the deadline.
• Payment terms: The conditions and expectations around the payment should be identified on the invoice. 
• Hours billed: The total sum owed should be broken down to include the number of hours billed for the services provided. 
• Line items with the service date and associated cost: Details on the services provided should be indicated to provide clarity. 
• Subtotal: The invoice should include the total sum of the different services and taxes if applicable.  
• Due date: To ensure the payment is received within a reasonable delay, the due date should be indicated on the invoice. 

Best Practices for Sending a Legal Invoice

Having a client-focused approach to your firm’s practice applies across all client interactions. From their initial intake to the payment, having a good reputation and repeated business requires clients to feel understood and appreciated throughout their interactions. A pleasant invoicing experience can be an opportunity to distinguish yourself from competitors.  

Before sending an invoice, ask your client who the invoice should be made out to and if they have a preferred payment method — does the client prefer receiving an invoice via email or instead going through the client portal? Do they want to pay by credit card online or by check? These are all factors to consider before sending the invoice. 

How To Get Clients To Pay Their Legal Invoice

Running after a client for an unpaid invoice is never enjoyable. Below are some actionable steps to help mitigate the likelihood of late or unpaid invoices. 

1. Clearly Communicate Your Billing Policy

The initial client intake consultation is the perfect opportunity to clearly communicate expectations around billing and payments. This information should be provided transparently during the first meeting and written in the onboarding documents. 

2. Invoice Your Clients On-Time

The best way to consistently send invoices on time is to set automated reminders. Creating a system of reminders where clients receive their monthly statements three to four days after the beginning of the month can help increase the likelihood of timely payments. Most people set their payroll toward the start of the month, meaning your client invoice would be paid after processing employee payroll. Moreover, having a set schedule crystallizes expectations and minimizes the time between completing and billing for the work. 

3. Offer an Online Payments Option

Every invoice should be clear, concise, and have a simple payment system. To avoid the time-consuming practice of processing paper checks, offer an online payment option to your clients. Through Bill4Time’s built-in payment processor, Bill4Time Payments, you can accept and process online payments right within the platform. You can also create custom payment links to add to your website or even your emails. 

Simply adding this in-demand payment method can get your law firm paid 70% faster than average billing practices. 

Tracking Your Legal Billing and Invoicing

By using automated legal billing software, you get access to comprehensive reporting to view your firm’s financial performance. Data within this dashboard includes accounting activity, the historical activity of accounts, expenses, month-by-month productivity, and user activity. 

With Bill4Time’s exclusive reporting, the types of expenses and time reports can include: 

• Account Activity Report: A general accounting report that reflects payments made from the Trust account to the operating account.
• Account Balance Report: An accounting report with the balance due for each matter.
• Billable Utilization Report: A report outlining targets vs. what was actually billed.
• Client List Report: A report showing various client details. 
• Collections Report: A payments report showing the amount collected for each invoice. 
• Inactivity Report: A report showing how long since a matter has been worked on.
• Invoice A/R Aging Report: A standard accounts receivable aging report. 
• Invoice Email Report: A history of invoices report. 
• Invoice Status Report: A report listing the payments that need to be applied to invoices. 
• Realization Report: A report of the amount billed/finalized divided by the total hours. 
• Resource Utilization Report: A report with the Performance Targets in the User Profile vs. Labor Hours.

By identifying and viewing this data, you can identify trends to achieve success and get insight into the forecasted revenue.

Implement a Custom Legal Invoice Template Process 

With minimal upfront work, your law firm can create a legal billing and invoice process that saves you time and money down the road. Bill4Time offers all of the features your firm needs to eliminate time-tracking errors, streamline your billing, automate your invoices, and process online payments. 

If you’re ready to optimize your firm’s time tracking and legal billing process, you can schedule a demo of Bill4Time or start a free trial to see the multiple timers or online payments functionality in action. 

All businesses, law firms included, need reliable, consistent systems to maintain efficiency. While traditional processes served the legal industry for decades, those manual systems may not be sufficient to meet the current demand in the market. This is especially true when it comes to the law firm billing processes. 

Manual processes for time tracking and law firm invoicing can not only create delays with payment but leave room for costly errors to both the firm and the relationship with the client.

Automated invoice approval processes are the ideal way to create efficient invoicing and billing to get your firm paid faster and create a positive experience for the client. In this article, learn how law firm billing and invoicing software can reduce the invoice approval cycle to get firms paid faster. 

What Is an Invoice Approval Process?

In law firms, the invoice approval process involves a detailed review of the bills generated for legal services before they are sent to clients. It typically includes checking for correct rates, verifying the time spent on various tasks, and confirming that all expenses are properly documented and justified.

What Steps Are in the Invoice Approval Process?

Invoice approval processes are adjusted to the needs of the firm, but they typically include the following steps:

Data Capture

The first step is verifying that the invoice has all the necessary information. This includes the client’s name and address, the relevant dates, the legal services provided, the transaction amounts, and information about banks or financial institutions. Ideally, this information will be archived in the system for repeat clients and automated.

Invoice Verification

Verifying the invoice is the next step in the process, which involves comparing it to a draft bill for legal services. This is usually done when the matter is complete or on a periodic basis, such as monthly or quarterly.

The draft bill must be reviewed to ensure it’s accurate. You may need to adjust time increments or edit the descriptions before they can be verified, which starts the process over.

Invoice Approval

The data is assessed, recorded, and validated by all parties involved before being submitted for approval. Automated processes push the invoice through each stage, streamlining the process with notifications to alert each party of deadlines.

Payment Processing

Once the invoice is approved, it can be sent to the client for payment. An automated law firm invoice software, like Bill4Time, allows your firm to create the invoice and send it to the client via email or the client portal to complete the payment online.   

How Do Law Firms Traditionally Approve Invoices?

As mentioned before, law firms still relying on outdated, manual processes are susceptible to human errors, missed deadlines, and decreased efficiency.

Other issues arising from traditional law firm invoicing include: 

Lost Billable Time

Manual invoice approval processes are time-consuming. Legal staff can spend a lot of time comparing invoice details with client information, and preparing and sending invoices. If there are delays in payment, staff can find themselves spending an ample amount of time following up on payments.

Missing Invoices

If your law firm processes a high volume of paper invoices or even emailed or faxed invoices, it’s easy for one to get lost in the shuffle. If this happens, the process needs to be repeated all over again.

Slower Payments

Without automation, the invoice approval process can be time-consuming without accounting for the time to get paid by clients.  Invoices can sit in email inboxes or on a desk for days or weeks, extending the time before your firm is paid. 

Expensive Errors

Errors on invoices can result in billing discrepancies and poor client experience. If you overbill, it can impact client satisfaction and retention as clients may lose trust in your law firm. If it’s too low, you’re leaving money on the table. Mistakes can also occur in manual data entry, leading to inconsistencies in your law firm’s accounting.

How to Streamline the Invoice Approval Process

Bill4Time is the law firm invoicing software that helps you automate the entire billing process, from tracking your billable hours to sending invoices and monitoring your firm’s financial health, all in one place.

Automate Time Tracking for Accuracy

Tracking billable hours is one of the most time-consuming aspects of a lawyer’s day-to-day work — and error-prone. For some, more than 30% of billable time is lost because of inefficient timekeeping, which then complicates the invoicing process and negatively impacts client trust.

With Bill4Time’s legal time tracking software, you can accurately and quickly track your billable hours in real-time. Instead of spreadsheets or notepads, the tool offers a timer that you can access on your phone, tablet, or desktop to record your billable time.

You can also track your non-billable time separately for precision and accuracy. Then, whether you’re in the field or in the office, you can simultaneously run timers to record different time entries seamlessly.

Create an Invoice Approval Workflow

Automating your invoice process saves time and effort. With the project and task management features in Bill4Time, you can set up an invoice workflow that works best for your firm. You can include all the steps, associated tasks, including the parties involved, and deadline notifications to ensure nothing is missed.

Use Invoice Templates

Invoicing is a significant burden on your legal staff. With Bill4Time, you can create professional, branded invoice templates in a matter of minutes, including pre-bills, detailed invoices, and financial statements.

If you have alternative fee structures, you can set up your invoices to offer flat or fixed-rate, or percentage discounts. All invoices are branded with your logo and company details, payment terms, late fees, and currency, eliminating much of the repetitive work that goes into invoicing.

When invoices are approved, send them via email or Bill4Time’s secure, compliant client portal. With Bill4Time Payments, clients can pay their invoices conveniently with credit cards, debit cards, or ACH from any deceive. Your firm can even create custom payment plans to make larger bills more digestible for clients. 

Automate Your Firm’s Invoice Approvals with Bill4Time

If you’re ready to save time and money by ridding your firm of manual processes, Bill4Time is here to help streamline your practice. With branded invoices, time tracking for lawyers, and automated workflows, Bill4Time simplifies your entire invoicing and billing process to get your firm paid faster, reduce time wasted on repetitive processes, and improve the client experience.

The ABA approved credit card processing for legal fees in 1974. However, law firm credit card processing has been slowly adopted. Only 62% of large and midsized firms use online payments consistently — even with well-established methods like ACH, eChecks, and credit card processing.

The Impact Credit Card Processing Has on Law Firms

The lack of online payments has a significant impact on lead generation, revenue, and profitability. A compelling value proposition or winning proposal won’t mean much if you can’t accept payment using the methods your clients want to use. If clients aren’t willing to spend money with your law firm, you obviously won’t receive the revenue you deserve, which means profits will continue to be sluggish.

According to a recent study by TSYS, 77% of consumers prefer card payments over cash, check, or wire transfer. Of that, 44% preferred using their debit cards, while 33% preferred using their credit cards.

Why Are Law Firms Slow To Accept Online Payments?

When it comes to online payments, many attorneys and law firms have hidden objections. These objections need to be addressed before attorneys feel comfortable accepting online payments. Let’s take a look at a few of these objections.

Objection #1: Credit card processing is too expensive.

According to Finextra, the cost of traditional billing, via paper invoices and snail mail, is around 9.5% of the amount collected on your invoice. Firms are so used to paying the expenses that come with conventional billing that they’re typically not aware of the amount they’re losing unnecessarily.

For example, if your invoice is $4,520.00, are you okay with giving away $429.40? If you send 25 invoices out to clients each month, that’s $10,735 or $128,820 annually that’s lost unnecessarily. 

Direct costs involved in paper-based billing include:

• Invoice and file preparation
• Envelopes
• Offering basic or alternative fee arrangements (debit, credit, retainer, fixed fee, etc.)
• Paper invoices/bills
• Printing (e.g., ink, toner, networking, security, maintenance)
• Postage/franking

Indirect costs are either fixed or costs that can’t be directly attributed to billing costs. Indirect costs include:

• Accounting and reconciliation requirements
• Bill query management and response times
• Customer service workforce to address calls
• Dealing with lost invoices
• Locating and submitting undistributed bills
• Bill storage costs (space rental and fixed costs)

Hidden costs are the expenses no one is looking for or controlling; these costs include:

• Hidden or unexpected payment transaction fees (e.g., annual, PCI, statement, batch, or termination fees)
• Timekeeping, billing, invoicing, and payment processing errors
• Increased float/overdraft protection requirements
• Longer sales cycles and the loss of potential cash-flow acceleration
• Lost/higher cost digital marketing opportunities
• Loss of “green” benefits/credits

It’s important to choose a payment processor that saves you money. Bill4Time Payments, for example, offers industry-low fees with a 2.9% fee for all cards, zero hidden fees and chargeback assistance.

Objection #2: Online payments will be complicated.

If you’re setting online payments up for the first time, you’ll need to go through a certain amount of transitional pain to get things up and running. However, two reasons explain why this objection doesn’t bear much weight.

1. The work is front-loaded. Once things are set up, the effort that’s required to maintain your online payment solution is managed by your provider. You provide them with the information needed to get started, but once you’re set, it’s mostly automated.
2. Integrated payment processing. Most of the set up is done for you with practice management solutions like Bill4Time. You’re able to simply monitor the flow of cash into your accounts as clients self-manage and provide you with the payments you need.

Objections #3: I can’t maintain IOLTA compliance if I accept credit cards.

According to ABA Rule 1.15, you’ll need to ensure you deposit client funds in the appropriate trust account. How do you accomplish that with credit cards?

“(a) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account maintained in the state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of [five years] after termination of the representation.”

To address this, legal practice management software like Bill4Time offers a solution that streamlines online payments while ensuring compliance with IOLTA guidelines. By integrating credit card processing directly within the software, it eliminates the need for third-party processors and ensures that client funds are directly deposited into the correct trust accounts, maintaining clear separation from the lawyer’s own funds.

This simplifies the payment process and provides peace of mind that compliance with IOLTA regulations is maintained. Discover how this all-in-one payment solution can support your firm by watching the video below.

Outlook on Law Firm Credit Card Processing

The legal industry has been slow to adopt online payments, lagging behind other industries, niches, and service providers. At first glance, this doesn’t seem like a serious issue for law firms until you realize that not using online payments is a source of revenue leakage.

Utilizing a built-in payment processor like, Bill4Time Payments, is a great way for businesses to offer ePayments that are compliant and allow them to collect more on the dollar. Bill4Time Payments is ready in Bill4Time user accounts and easy to activate. Streamlining your payments and getting paid faster has never been easier!

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