Have you ever looked at one of your firm’s bills and asked, “Would I pay this?”
Lawyers sometimes have a tough time getting paid. Their rates are high by comparison to what non-lawyers usually see; it takes a lot of time to do what they do; the process and results are sometimes unpredictable; expenses are high; and even their well-intentioned efforts to look and dress professionally can come across like we don’t really need the money. Believe it or not, how an attorney bills may be part of the problem. Here are seven key considerations for attorneys getting ready to bill.
1. Talk about it. Getting paid starts at the beginning. This is the best time to prepare the client for the fees and expenses that lie ahead. Avoiding surprises is key and written engagement agreements that cover staffing, rates, billing increments, retainers, and expenses are a must. Good agreements make good friends, so have a clear, easy to read, and easy to understand written engagement agreement with clients. Take the next step, though, and talk with your client about upcoming fees and expenses. It will help understand the client and whether he is up for the financial commitment ahead. This is also a good time to let clients know how overwhelming legal expenses can be and that everything possible will be done to ease the burden.
2. Rally the troops. Give clients a point of contact for the administrative side of their cases and introduce them to whoever will be assisting and who they can contact if they have a billing question. Some firms include in their engagement packets a list of tips for keeping legal fees down. Some may consider that counterproductive, but if a partner is taking time answering non-billable administrative questions because a client didn’t know who else to ask, who’s being counterproductive?
3. Choose words carefully. Bills may well be the most important communications that you have with a client, so treat them that way. The way you word time entries can be the difference between a disgruntled client and a client who is confident the attorney is not adding insult to injury by overcharging. A disgruntled client may ultimately stop paying altogether and will never make a referral to others.
Don’t give someone an excuse not to pay. Make sure each time entry means something and reflects the firm’s efforts to advance the client’s interests and move the ball down the field. And don’t be sloppy. Sloppy lawyers are perceived as incompetent lawyers and incompetent lawyers don’t get paid.
4. Poor planning. Cutting it close and pushing up against deadlines can sometimes require additional time and expense. Is it fair to bill clients for that? How about for preparing and filing a motion for extension and accompanying filing/e-service fees or for overtime? If the attorney forgot to include a defense in an answer and it has to be amended, should the client pay for that? If the answer to these questions is yes, then be prepared to explain that to your client.
5. Expensive stuff. Sometimes the biggest shock to a client is not the fees but the expenses. From experts and e-discovery to copy costs and postage, the client can really take a hit. Again, avoid surprises and always get an advance estimate for larger expenses for the client’s approval. Also, be considerate of how quickly expenses can add up, even the small ones. Should an entire document production that is already electronically imaged be printed out? Does everything have to be sent by overnight delivery? Do e-services need to be duplicated with faxes and certified mail? Sometimes the answer to these questions is yes, but not always.
6. Red flags. Red flags to clients include block billing and repetitive time entries. Listing tasks separately helps the client understand what the attorney did and the value of the time being billed. Another red flag is work that an attorney is doing that clearly could have been delegated to a less expensive staff member. Duplicate billing is also a problem. How many attorneys does it take to prepare a brief or attend a deposition? Sometimes the input of multiple attorneys is required and sometimes the same task lasts over several days, resulting in similar sounding time entries. Think about how that looks to the client and craft time entries to explain how value was added with a team effort.
7. Set the bar high. Finally, it takes a lot of billable hours to keep a firm in business and to make billable hour budgets. Unfortunately, that pressure sometimes pushes attorneys and legal assistants to use a “heavy pencil.” Billing for every minute devoted to a file is one thing, but billing for tasks not performed or time not spent is another and is not consistent with professional and ethical obligations. Don’t go there. It’s the billing attorney on file who is for discussing billing do’s and don’ts with the timekeepers in the firm. What is acceptable? What is fair? Do everything possible to ensure that everyone in the firm understands and practices the highest ethical standards when it comes to billing. And take a moment to really look at those bills. Because, after all, it’s about time.