There’s been some controversy recently over the issue of billing – and specifically the accuracy or false “padding” of client bills. Typically, inaccurate bills come from one of two bad practices; billing for time not spent working, or billing for time spent working but exaggerating or mislabeling the work (as, for example, work by an associate might be marked as work by a partner). There are, however, further questionable practices that could be employed – justifying a larger bill due to a better than expected outcome for the client, for example, or simply billing for work long after it is completed and risking inaccuracy.
Proper, consistent, and transparent billing must be at the heart of every good firm, and there are two main goals to have in mind: accurate and representative records, and a way of delivering which is helpful and understandable to clients. The first is perhaps a precursor for the second.
When keeping records for client billing, keep detailed descriptions of the work – but detailed does not mean long-winded. A description which goes on for too long becomes open to ambiguity and client questioning, while a description which lacks specific information makes it hard to assess whether the time spent was appropriate. As e-billing makes it more and more possible for clients to break down and challenge a firm’s billing requests, it becomes more important that every charge be clearly explained.
Time worked should be recorded regularly and speedily. The fact is, accurately remembering how much time was spent on a project once a week or more has passed is hard to do without some margin for error. If a client questions a bill and finds it was only recorded a month after the work, they’re unlikely to take your word without suspicion of inaccuracy. When work is completed, either recording immediately, or ensuring to record on a daily or weekly basis, is an easy and effective way to avoid this problem.
Finally, as far as a firm’s records are concerned, know what you should and shouldn’t be billing for. Legal work, research, consulting and court time are all, of course, billable working hours, but the income from clients is generally expected to cover both general office management – photocopying, faxing,, telephone calls, secretarial skills, etc. – and aspects of the work which can be reasonably expected to be undertaken – meals, staff overtime or temp staff, storage fees, conference facilities, subscriptions, etc. Billing for costs related to the general running of a law firm, as opposed to work carried out specifically and directly related to a client, is not good practice.
As for client relations and their understanding of billing, there are a few simple things which save much time. Clients cannot be expected to have a detailed knowledge of the law or legal slang – so in billing descriptions, leave out jargon or abbreviations unless you also include explanations. Using legal terminology is fine, but bear in mind that those reviewing them may have no training in law. Clients should also be told, preferably in writing, about your firm’s billing practices right from the start, and you should only begin work upon their agreement to this. It can also be important to explain the difference between, say, associates and partners, and the different steps required in sometimes complex cases before work can be completed. A client’s lack of knowledge about the realities of law is just as much your problem as theirs if it means they question your billing. Be helpful – explaining as much as you can both what may be required (before work) and what has been carried out (after work is completed). Clients should also know how bills will be delivered, what they are expected to do in response, and – yes – how they can challenge the bill if they need to.
Essentially, having your billing practices set in place and being willing to ensure clients understand the process as you work with them is the key to having a foolproof system. You might also consider having a billing audit carried out to highlight any weak points or areas for improvements – though it might seem unnecessary before any problems occur, the best way to solve issues is to fix them before they’re exposed. If there’s one area clients are going to pay the most attention, after all, its money and the bills you send them.
J. Kyle Bachus is a founding partner of Bachus & Shanker, LLC , and is licensed to practice in Federal and State courts in both Florida and Colorado. Having graduated from the University of Florida of Law, he now handles serious personal injury cases, wrongful death, and insurance bad faith. He is a member of The Colorado Bar Association, The Florida Bar Association, and The American Association for Justice, among others.
Originally published on LawyerCentral by Kyle Bachus on April 26, 2013 Read the original (Internet Archive).