Now more than ever, law firms are looking for ways to reduce costs, improve efficiencies and hold on to their clients by providing better value. Billing is often a struggle for firms and clients alike. By reevaluating the tools and workflows your firm uses to track time, bill clients and collect payments, you can accomplish all three goals.
It doesn’t have to be a daunting process. By following these five steps, you can quickly identify where timekeeping and billing workflow problems exist — and how to fix them.
Step 1: Document Your Current Billing Processes
The first step in improving billing workflow is to determine how all the firm’s attorneys currently track their time. It is not uncommon for each attorney to have their own process. Depending on your firm’s size, you can create a questionnaire or talk with each attorney to get a sense of the processes each timekeeper is using and the degree to which these processes are standardized, easy to complete and efficient. You should also document all tools attorneys are using to help determine if there are gaps or bottlenecks caused by the use of disparate systems.
Step 2: Identify Your Pain Points
Once you understand precisely how attorneys are billing, you can figure out where the firm may be losing time and money due to inefficient on inconsistent processes.
In many firms, timekeeping is a tedious task. Getting attorneys to input hours into the system in a timely way can be a major challenge. They may be using manual methods to track time, or the timekeeping software may be difficult to use. When timekeepers attempt to reconstruct their billable time hours or days after performing the work, they are likely to forget the details. Inaccurate timekeeping has serious effects on overall revenue. Some studies show firms that record time as it happens see 25% to 40% higher revenue. To be effective and accurate, your timekeeping system must be intuitive and simple, so attorneys don’t get in the habit of delaying time entry.
Attorneys may also be submitting bills that don’t match clients’ criteria. If attorneys are not using a standard format and consistent guidelines, clients will be more likely to question invoices, resulting in an extended time for invoices to get paid.
Step 3: Assess Your Risks
Next, identify specific processes within the billing workflow where your firm may be vulnerable.
Are there particular steps in the process that attorneys regularly fail to complete on schedule, leading to delayed bills? If your firm can’t submit accurate bills in a timely way, your clients may start looking for a firm that can.
It’s also critical to consider how flexible your billing workflow and payment systems are. As the COVID-19 pandemic is reshaping how we work, you should evaluate whether the firm’s billing workflow system allows attorneys to easily keep time when they are away from the office or while working from a mobile device.
Lastly, take a look at your methods for securing payments from clients. Complex systems for remittance that require the involvement of firm staff may be delaying payments and raising overall costs. Increasingly, clients are requesting the option to pay by e-check or credit card. Does your firm have a system in place to accommodate them?
Step 4: Identify Opportunities to Shore up Weaknesses
Next, it’s time to determine how to increase billing efficiency and translate those gains into significant cost savings and improved client satisfaction.
Simplifying and automating tasks can go a long way toward saving money and time and eliminating errors. For example, it may be helpful to set up automatic alerts to notify staff of missing time, overdue receivables, matters that are running over budget or clients that are in collections.
Billing workflow isn’t just about software and workflow, though — it’s also about people. You need to consider how much change the culture at your firm will tolerate and identify approaches with demonstrable benefits over your current systems. Your attorneys won’t embrace a system that requires a great deal of training. They will, however, respond well to tools that are tailored to the way they actually work, which may include activities like dictating notes and making time entries when out of the office, whether traveling, at home or out meeting with clients.
Step 5: Identify the Right Tools for Timekeeping and Billing
Once you know what you need to fix, it’s time to choose the tools that will allow you to do so quickly and cost-effectively. Look for systems that are adaptable, intuitive for non-technical users and easy to integrate with software your firm currently uses. Systems that integrate with a mobile application will make it much easier for attorneys to enter time when working remotely.
Also, consider technology that can put your timekeeping and billing data to productive use in the form of reports and business intelligence. A system that allows you to create your own dashboard with customized charts and graphs can quickly become a powerful tool for tracking past-due bills, identifying workflow bottlenecks and identifying new efficiencies. Always-on systems that offer automated alerts, including customized and automated collections notices, are especially valuable for reducing time to payment, as well as the hours your staff spends collecting payment.
Finally, consider investigating reputable third-party systems that can integrate with your technology to accept credit card payments from clients. When it’s easy for clients to pay, they are much more likely to pay on time.
When evaluating different providers, be sure to ask about the levels of support and training they provide to make sure those mesh with what your attorneys need. You should also look for providers that offer seamless updates without shutting your entire system down.
Better Timekeeping and Billing Practices Lead to More Satisfied Clients
Improving timekeeping and billing workflow doesn’t just make life easier and more profitable for your people. It also improves client satisfaction and loyalty. Every one of your clients is on some other firm’s business development list. Good billing practices allow you to engage confidently with your clients and make it easy for them to do business with you.
Illustration ©iStockPhoto.com
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