The issue of billings isn't just about revenue. It's also about
professional integrity, communications and client trust. Billings
are one of the most important avenues of client communication;
inaccurate, vague and/or delayed billings can cost more than
yesterday's time. It can result in lost trust and future
At the same time, it has been estimated that attorneys fail to
bill from 10-25 percent of their legitimate billable hours due to
bad recording habits, disorganization, being overwhelmed and poor
team management. That's a painfully large part of anyone's revenues
to lose, especially when it represents legitimate work done and
Here are eight ways attorneys lose legitimate billable hours and
fail to communicate effectively with clients, with solutions on how
to bill more effectively.
Problem 1: The periodic 'reconstruction'
Reconstructing hours at the end of the day may lose you 5 to 10
percent. Waiting a week can lose as much as 15-25 percent.
It is virtually impossible to accurately reconstruct work done
more than a day ago. The big pieces may get recorded, but most of
the smaller pieces - momentary conversations, e-mail responses
and impromptu meetings - will be lost, even though each was
legitimate client work. From the ethical side, trying to
reconstruct work done more than a few days ago is an exercise in
fiction writing - imprecise and possibly erroneous.
Solution 1: Track your time concurrently
The most obvious solution is generally the most hated. But is it
more enjoyable to not get paid for 10-25 percent of your work? Is a
10-25 percent increase in revenues worth a change of habits?
Reduce the struggle by obtaining a separate dictation machine just
for recording time. Carry it with you at all times. Dictation is
less intrusive and more explanatory than software or writing time
sheets, and can be done anywhere - in the car, on the train,
at home - helping you capture more time.
Problem 2: The good client courtesy
"It was just a two-minute call, she's a good client, I won't
nickel and dime her." How many calls do you not record in a given
month? How many of them contained important information or valuable
Solution 2: Record it -- always
Record everything you did, without judgment - and decide
only once - at pre-bill - what to bill or comp.
Ethically, professionally and financially, recording everything is
the only choice. That way, the client has full information on your
work for them - and sees what you have decided not to charge
Problem 3: The interruption
How many times have you hung up the phone and were immediately
attacked by a team member with a question, or dashed out of your
office late for a meeting? Such interruptions cause you to fail to
record your time - and often it's lost forever.
Solution 3: Keep your door closed
Train your team to honor it, and to hold non-urgent questions
for regular daily meetings or specified open-door times. Designate
non-call times and have your assistant take messages, facilitate or
pass on calls to your team. Then designate a call-return time,
instead of returning calls on the fly. No matter how rushed, always
take the 30 seconds needed to dictate time.
Problem 4: The 'I was in lala land'
You've worked for four hours, but you've been unfocused and
unproductive. So you write down three. Or two. After all, "I didn't
get much accomplished, so I can't very well bill for
Solution 4: Record it all without judgment
A certain amount of unproductive wandering around is often
necessary. Your brain is processing unconsciously even when you're
not very conscious. Three hours of "wandering around" often leads
to one flash of inspiration. So write it all down and save that
judgment for the pre-bill stage.
Problem 5: The 'Work in progress' black hole
Many lawyers just don't get around to billing some clients,
especially when there has been little progress, or it's a "D"
client. So the bill waits a few months and accumulates - and
the client's recollection of calls, meetings and so on get
Solution 5: Bill monthly, unless the client says not
Remember that billings are a crucial part of client
communications - possibly THE crucial part. It's the basic
report to the client on your activity for them, and what you're
charging. Delaying your billing is obfuscation, since you've done
work that obligates the client to pay, but you haven't given them
the courtesy of telling them. Essentially, it's not an option to
delay these reports unless the client specifically directs you
Prompt billings help assure prompt payment because the client is
more likely to remember recent activity and less likely to question
items. Anything less than monthly billing means the loss of the
time value of money (you're playing banker for your client) and
sets you up for the next problem area.
Problem 6: The first write-off
The vague, reconstructed or delayed bill is sent. The angry
client calls with questions, so you trim the bill a bit to placate
them - but really to compensate for your poor billing
See Solution 5.
Problem 7: The second write-off
The unhappy "D" client negotiates your bill down again and still
doesn't pay. You call them again to ask for payment, and end up
trimming the bill even more.
Side note: At this point, you'd do well to ask yourself a
question. Was that a "D" client in the beginning, or was it an "A"
who went downhill due to poor communication - such as billing
See Solution 5, but also re-examine your client intake process.
Are you accepting "D" clients? Or are your communications and
client service creating "D" clients?
Problem 8: The final write-off
That "D" client who has consumed more unbillable time arguing
about billing finally refuses to pay.
Should you sue for fees? Never, unless the amount is huge. If you
do consider it, remember to add in the dollar, time and
psychological costs of defending an unfounded grievance or
malpractice claim, because both are the refuge of the "D"
None, except to review solutions 1-7 for next time.
Conclusion: It takes a perspective shift
For most attorneys, poor billing practices are actually a
symptom of other problems: poor client selection, poor office
procedures, office disorganization, poor team management and
attorney overwhelm. Focusing on these areas can produce significant
But the larger solution is a shift in perspective. You must stop
tracking billable hours and start tracking time.
That's right. Record everything. Don't make those moment-to-moment
value judgments about billable or not billable. Simply record all
of your time, and then make only ONE judgment each month about how
much to bill.
And how to decide how much to bill? Stop thinking in terms of the
time you put in, and start thinking of the value you delivered.
Look at the total dollars, and ask yourself, "Was I worth that this
month? If so, bill it undiluted. If you still feel the need to
write down some time, show it on your bill, then deduct a courtesy
discount, and let your client know the consideration you're giving
Either way, remember that providing your client with a full
accounting of your work for them is an essential professional
N.B.: If you also record everything
non-billable - admin, marketing, personal - for a week or
two, you'll learn more than you wanted to know about your work
habits and time wasters. The awareness will have you operating a
bit more efficiently.
The law - and the billable hour - are merciless
taskmasters. But you can reduce the misery by making sure you get
paid for all of the hard work you do, and by making sure your
billings are communicating effectively to your clients.
Dustin A. Cole, president of Attorneys Master Class, is a
master practice advisor who helps attorneys build more profitable,
enjoyable practices and create financially successful retirement
and transition plans.