Posts Tagged ‘Ethical Billing Practices’

Ethical Billing Practices: Invoice Details

March 15th, 2016 By Virtual Paralegal Services

The Model Rules of Professional Conduct, specifically Rule 1.5 and corresponding state rules, prohibit attorneys from charging unreasonable fees. There are several factors that determine whether a fee is reasonable. One factor is the time and labor required to provide the service. Providing sufficient detail in your client invoices is critical to ensuring your charges are reasonable. Many solo and small firms fail to track time on a regular and frequent basis, resulting in the failure to retain important details required to support the charges. Waiting until the end of the month or even the end of the week to enter time, creates several issues, including:

  • Higher probability of clients contesting invoices.
    If a client contests an invoice, you not only lose time trying to resolve the issue, you also decrease the chance of repeat business or a referral from that unhappy client.
  • Increase in discounted and voided fees to appease client concerns.
    Attorneys many times simply reduce their fees in order to avoid complaints escalating beyond them. This hurts revenue and cash flow.
  • Greater exposure to potential claims of unethical practices for charging unreasonable fees.
    Communication is the number one issue leading to disciplinary actions. Invoicing is a form of communication that provides details around what an attorney is doing for the client. Not communicating enough detail in an invoice is an avoidable risk.

Attorneys should regularly track their time to be able to support the level of effort behind the fees they charge. It is a simple, yet too often ignored or de-prioritized activity. Improved tracking of time, benefits the attorney in several ways:

  • Minimize client complaints about overcharging.
    Communicating specifics to a client by increasing the invoice detail, preempts clients billing concerns, reducing negative reactions to fees.
  • Improve revenue and cash flow.
    Don’t lose billable time and revenue due to inefficient billing practices. Avoid having to reduce fees due to client concerns.
  • Avoid claims of charging unreasonable fees and unethical practices.
    No attorney wants to be brought before disciplinary council. You can avoid these claims; and if a claim is made, better support your fees by showing a sufficient level of detail.

By tracking your time regularly, you are not only able to provide more details to support time and effort, you also minimize client complaints by justifying your time and fees.  One way to track time more accurately, is to review the day’s activities and dictate or write out your efforts at the end of each day.

Virtual Paralegal Services helps solo and small firms provide ethical and effective billing procedures by providing back office financial support.  VPS clients provide time activities through email, dictation, and other means, and VPS transcribes and organizes their time for detailed invoicing.  VPS’s team of back office support personnel are experienced in law firm operations and provide a cost effective means of managing financial operations including: tracking time, invoicing, collections, and account reconciliation. Contact VPS today to learn more.

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