Billing management is crucial to the success of law firms. If you are inefficient when it comes to billing, customers will be unhappy, there will be delays in payments, and in the end, profitability can suffer. Among others, one of the most important is to avoid underbilling, which is possible by doing the things we’ll briefly mention in this article.
- Track Billables Effectively
One of the best things to do is to use legal billing software for tracking billables. This will help improve the accuracy of the billables compared to relying on other methods, such as manual time recording. With the right software, lawyers can capture bills as they work. It is optimized for efficiency while also offering the highest level of precision.
- Record Everything
Speaking of billables, it is also important that you record everything that is done for a particular client or case. Small but important tasks can be easily ignored, and this is what will make underbilling prevalent in the law firm. Make sure that each item recorded has accurate billing descriptions to avoid disputes.
- Get a Signed Agreement
Law firms, above other industries, should know the importance of a contract. With this, from the onset, the contract should state the agreed fees. This will help to set expectations both on the customer and the legal service provider. It also sets out provisions on what will happen in case the client fails to meet legal obligations, such as the interest that will accrue. This will also help in the prevention of disputes.
- Consider the Competition
Conducting a thorough research of the competitive landscape is another easy way to prevent underbilling in your law firm. With knowledge of how much other law firms are charging, it will be easier to determine the right pricing strategy. Use the current competitive landscape as a benchmark for setting your prices.
- Delays in Invoices
Underbilling can also happen when there is a delay in invoices. Consequently, the latter can result in payment delays. To send invoices on time, consider tapping a digital technology. For instance, with RocketMatter, you can enjoy an electronic system that automates sending of invoices, making sure that clients will be billed on time, and in turn, they can also make timely payments.
- Know Your Worth
For law firms to attract more clients, some might resort to lowering their prices. However, this might not always work. When you lower your rates, you are undervaluing your services. This can result in under-billing. Do not try to lure clients by being the cheapest legal service provider. This can compromise your profitability. Instead, focus on improving your service, and when you are exceptional, clients will not mind paying more!
Take note of the things mentioned above so that you won’t end up underbilling! From tracking billables to knowing your worth, consider our recommendations to bill effectively and efficiently.
