Blog Number 3 in our series on Turning Professional Time into Cash Flow is to attempt to focus on billing items that are known to annoy many clients.
There are several billing mistakes many attorneys make that can irritate their clients. The most common mistake is the belief that the more details the include on the bill the more a client thinks the attorney is doing a bang up job.
This is wrong. The only thing the client thinks is that the attorney is doing a bang up job of recording a lot of unnecessary activities for which the client is being charged. Most clients are irritated by a bunch of detail with no little reference to value.
Attorneys who have become effective at client billing have learned to aggregate professional activities into meaningful paragraphs that sometimes span more than one day.
Example:
October 4, 5, 9 and 12: Lease negotiations with Mr. Besots, Ms. Hayward and Mr. Charring-Cross by phone and in person resulting in a completed 5 year lease and a deposit of $16,000. 6.4 hours $2240.00
This short paragraph could have been presented without the value of the 5 year lease and deposit, as many several phone calls, meetings, emails and faxes, but the value would be lost. Even when there is no single value event, there is always value.
Another Example:
September 4, 6, 7, 9: Phone calls, emails, faxes between Ms. Fruitvale’s counsel Mr. Roger Smart to understand the reason why Ms. Fruitvale wants the downstairs furniture. Those reasons ascertained and communicated to client, like value items from the estate can now be considered. 1.3 hours $ 422.50
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If you feel it is necessary to itemize each activity, I suggest you start with a value statement before the itemized entries. Something like:
The following are professional services finalizing a five year lease finalized with Mr. Besot, Ms. Hayward and Mr. Charring-Cross and deposit taken for 33 Merchant Way, Los Angeles. $16,000 deposit made by Lessees.
October 4th 2014 Phone conference with Ms. Hayward. .50 hours $175.00
October 5th, 2014 Phone conference with Mr. Besot. 2.00 hours $700.00
October 7th, 2014 Walk through at 33 Merchant Way 1.25 hours $437.50
October 9th, 2014 Negotiate and prepare lease. 2.65 hours $927.50
Costs advanced:
The other billing process that irritates clients is repetitive listings of Photocopies, Postage, Faxes, Emails, Postage and other overhead costs. If you feel you must charge for phones, postage, photocopies, faxes etc. then try to summarize them into one or two line items for the month. Some attorneys charge their clients a fixed overhead charge to cover all overhead costs like phones, postage, photocopies, faxes etc.
I remember reading an article many years ago on what Attorneys thought clients wanted from the attorneys billing system compared to a survey of clients asked what they wanted from their attorneys’ billing systems. There was a wide gulf between the two. Clients wanted less detail of tasks and more narrative around value received. Most clients felt the endless listing of meaningless tasks felt like a way to bully them into accepting overly large bills based upon activity most of which the clients did not understand in terms of the relationship to value.
I am not suggestion that attorneys should not carefully record time spent on behalf of a client. But when billing for this time, I am suggestion attorneys should try to put the time spent and the services rendered in the context of value for the client.
Interbill has developed a number of billing methods that reduce billing annoyances for your clients. Interbill introduced summarized costs and overhead costs as a percent of fees many years ago. Both of these features are used extensively by Interbill Attorney Customers. Please email info@interbill.com and call 800.733.9933.
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