Start Your FREE Membership NOW
 Discover Proven Ways to Be a Better Law Office Manager
 Get Our Weekly eNewsletter, Law Office Manager Bulletin,
    and MUCH MORE
 Absolutely NO Risk or Obligation on Your Part -- It's FREE!

Upgrade to Premium Membership NOW for Just $90!
Get 3 Months of Full Premium Membership Access
Includes Our Monthly Newsletter, Office Toolbox, Policy Center, and Archives

15 ways to improve your billings and collections

It’s no secret that many clients don’t like to pay their legal bills, says collaborative divorce attorney Joryn Jenkins. And without having measures in place to ensure payments, law firms can run into huge headaches.

In a webinar for Law Office Manager, Jenkins, CEO of Open Palm Law and Open Palm Press in Tampa, FL, and Elizabeth Miller, an independent law firm administrator also based in Florida, discussed best practices that firms can implement to improve their billing and collections procedures.

According to both Jenkins and Miller, one of the top protocols that law firms need to follow is to bill their clients every single month. That’s because it’s easier to collect one month’s worth of billables than it is to collect two or more months’ worth.

“If you send a client a bill for $500, they might complain, but you’re going to get paid,” says Miller, adding that letting another month pass and then sending a bill for $1,200 will likely result in the client sitting on the bill. “Suddenly you find yourself in a position with a client who is just running up legal fees and you’re not getting paid.”

Jenkins says part of her retainer agreement with clients is that they agree to be billed every month.

It’s important to get bills out to clients within the first five days of every month, because clients will become used to receiving them at that time of month and are more likely to get into a rhythm of paying them.

Jenkins says clients will pay you when they get paid themselves, so she advises that law firms need to show some flexibility regarding when bills are paid.

She says she has set up fixed monthly payment plans with some clients and has told them she will forgive any interest on overdue amounts as long as regular payments are made.

“Clients will never be totally satisfied with their bills or the fees charged, regardless of the outcomes of their cases,” says Miller. “What it essentially boils down to is the client would be happy if you worked for free.”

She says it’s not worth risking a bar grievance by arguing over a few dollars you are owed. It’s easier to walk away from small disputes over fees charged.

15 ways to manage your billing and collections

Here are some other tips from Jenkins and Miller that can help you better manage your billings and collections:

  1. Cut off your billable time at the end of every month to ensure that past charges don’t pop up on bills a couple of months later. When that happens, clients become upset and possibly suspicious.
  2. Run pre-bills by the second day of every month, complete final edits by the fifth day, and send them out that day.
  3. Set up a system that alerts you when a client’s trust fund falls below $1,000. At that point you can request fee and cost replenishment retainers.
  4. Update client ledgers so you will know how much money a client has in trust. Keep a separate Excel spreadsheet for every single client, not only detailing trust money, but also a breakdown of fees and costs.
  5. Be highly explanatory in your billing so your clients will know exactly what services they are receiving for their money. The more specific you are, the fewer questions you will receive.
  6. In your retainer agreement, lay out your billing arrangements and the hourly fees charged by partners, associates, and paralegals.
  7. Never have a client sign a retainer on the first visit. Have him or her take the agreement home to carefully read it before returning the signed form to your office.
  8. Don’t bill clients for each person in your staff who reads an email relating to a case. Only charge for the person who responds to the email and takes action as a result of it. When billing, you need to refer to specific emails that were received and generated. Vague billing for several emails will likely result in clients thinking they are being overcharged.
  9. Before implementing any fee increases, notify clients in writing 30 days in advance.
  10. If a client mentions a billing concern while talking to a lawyer, refer him or her to the person who handles billing.
  11. Remember that time spent working for a client who won’t pay is better spent working for a client who will pay.
  12. Have a frank talk with clients who fall behind on paying. Don’t let the situation run on for months.
  13. Pay attention to your receivables. Take action sooner rather than later.
  14. If you need to take action on collecting unpaid bills, take the matter to a collections lawyer, not a collections agency.
  15. Finally, remember that consistency is key. If you manage your clients’ expectations about billing, they are more likely to pay within a reasonable time.

Editor’s picks:

Model Retainer Agreement

Notice to Client of Increase in Hourly Rate

Model Billing Statement









Try Premium Membership