The ABCs of billing and accounting practices at law firms start with keeping all transactions details at a matter level rather than at the client level. Many service businesses perform multiple types of jobs for a customer and generate one invoice that covers everything. The same billing process does not work for law offices.
Law firms are usually required to keep each task (called “matter”) completely separate from other matters for the same client or other clients. For example, if client John Smith gives his attorney two assignments, one for a “divorce” and another for “will preparation,” the law firm must track time and expenses separately for Mr. Smith’s two matters. The same concept extends to generating invoices, handling client advances, etc. For law firms, matter-based recordkeeping is critical because it allows them to produce proper records easily in case of client inquires, billing disputes or state audits.
Whether your firm uses a manual billing system or legal billing software, make sure your recordkeeping is matter-based and you can avoid Pitfall #10. Stay tuned for Pitfall #9.
Register for Easy Soft’s interactive webinar, How to Avoid Legal Billing Pitfalls. Learn how to evaluate systems that can streamline your back office operation for legal billing, trust account management and collections, and in turn tighten state regulation compliance and improve your firm’s financial picture.