Avoiding Common Billing Mistakes and Fee Disputes
Keeping clients happy is not just about providing a quality service and the results they need, but also ensuring that your fees are fair and billing arranged professionally and transparently. Many legal firms, and solo attorneys, fall into the traps of common billing mistakes and find themselves struggling with fee disputes.
A client may take issue with your billing format and process, the overall cost of your services or a lack of transparency with regards to what they are actually paying for. Should you encounter such an issue, you could enter into a lengthy fee dispute battle and put your reputation at risk. It is for this reason that proper billing management and transparency is important, and the first step is avoiding common mistakes.
Define Your Time Properly
It’s easy to fall into the trap of condensing certain projects or milestones into one day, and then billing those milestones for the number of hours spent working in the day. This is actually fairly common among less experienced attorneys and firms, but it can cast doubt into the mind of your clients. By lumping tasks together, you may give the impression that you are hiding inefficient practices, even if you have no such intent.
The easiest way to define and manage your time is through software. Practice Panther helps lawyers manage invoices, expenses and billing, and with its integration with your email and calendar, it is far easier to manage your time and show your clients just how much time has been spent on each milestone in their case.
Tracking Expenses is Essential
Expenses are a common inclusion on legal bills, but it’s easy to lose track. Clients more than ever want to see exactly how their money has been spent, and if they suspect that a single dollar has been spent on expenses that weren’t necessary, then a fee dispute might occur.
Again, software can work wonders with expenses management. Practice Panther’s integrated management system makes it easy for you and colleagues to log all expenses and assign them to individual cases. All of this information can then be turned over to the client when providing an invoice, or discussing the result of the case.
It’s also wise to discuss with your client from the beginning what funds may need to be spent on. Fee disputes are far less likely when the client has agreed upon a timeline, a price and general expenses – and with a reliable piece of software, there’s no reason you can’t do this. The email and schedule integration makes it easier to share information with your colleagues and clarify your plans before getting to work.
Avoid Delegation and Multi-Billing
It’s easy for a senior attorney to use a paralegal to help with a case, but when a client is paying senior attorney fees, it becomes not only unethical, but fraudulent. Avoid falling into this trap and organize properly how you will manage a case, and if a paralegal will be involved in fulfilling certain milestones, simply include this on your planning documents and adjust the fee accordingly.
Multi-billing, whereby a number of attorneys appear at the deposition and regularly work on a case that can be handled by one attorney, is another cause for concern. In some cases this might be necessary, but in cases that can be handled with the services of one attorney, a fee dispute is likely. It’s essential that a client is given the services that they need, and no more – unless they specifically ask for it.
Arrange a Signed Fee Agreement
A signed fee agreement is a document that outlines what a client will pay. Typically, these documents are provided not only to ensure a client pays only for what they agree to, it also sets out provisions in the case of unexpected events. For instance, expenses and general overhead costs will be outlined, but provisions will be made in the agreement if more than one attorney is required to work on the project.
Specific circumstances can be laid out in the fee agreement whereby more attorneys, or staff members, begin working on the case. This puts the client’s mind at rest, knowing that the case will only cost them more than expected if A) an unexpected event occurs or B) they agree to involve more people to improve chances of success.
A signed fee agreement may also outline any retainer fees that might be necessary. These agreements are beneficial for both parties, helping you avoid fee disputes and ensuring you maintain your food reputation, while also giving clients the best insight into what their case will cost.
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