Comments I hear more frequently than I’d like:

Law firm A: “Client B uses e-billing tools and audit services to cut my bills arbitrarily – simply to reduce its legal spend with no consideration given to the value of my services.”

Client B: “Law firm A always inflates its invoice – adding extra time, expenses and staff, knowing that the bill will be cut, but motivated to add hours to meet its billable goals.”

Can this marriage be saved? Certainly – especially where the goals of both sides are reexamined and readjusted to coincide. And where both parties communicate early and often. Clients want to see the value of the legal services from the law firms they engage; outside counsel want to be fairly and quickly compensated for their work. So what can each side bring to the table to disrupt this stalemate and reach common ground?

AFAs are gaining in popularity right now. Are you ready to take the leap? If not, what can be done to make hourly billing more palatable for both parties? Your goal should be the creation and presentation of a timely and informative bill which meets reasonable guidelines, which passes cleanly through an audit, which educates the client on your worth and efficiency, and which results in a faster payment cycle. At a high level, four simple steps can help both sides reach this goal:

  • Client and firm – communicate at initial retention: Clients should provide concise reasonable guidelines (please four pages or less!) and law firm billers should read them (that means not just the billing administrator but everyone in the firm who will be providing services to the client.)
  • Client and firm – communicate at matter assignment or within the first 30 – 60 days: Both parties should set expectations/ agree on matter handling/ budget/ staffing / matter progression.
  • Law firm – review: Before each invoice is submitted, the law firm/ responsible attorney should review the bill with “client eyes” to insure compliance with 1 and 2 above. If you were the client, would you pay every item on this bill?
  • Client – pay promptly: your firms should be compensated without delay where they have earned it. Net 90 should not be the norm.

And here’s a stretch for firms – think about invoice submission as another opportunity for client development. What could you do to turn this into a true marketing tool to further reinforce your value?

Do you want to reduce your legal spend in 2018? Request a demo to see how Acuity can help!