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In a survey conducted by the Technology Committee of the State Bar of New Mexico, about 40% of the 460 attorneys who took part said that they use time and billing software for preparing bills. A national survey conducted by ILTA with about 200,000 respondents showed a percentage of over 50%. The numbers are good, but they should be higher.
Billing programs have taken the place of the abacus and the adding machine. Attorneys need to be aware of the tools now available to keep track of time and electronically prepare bills whether they handle cases on an hourly basis, or rely on a flat fee or contingency. Even alternative fee arrangements such as value-based billing require keeping track of your time. Unless you are a very experienced attorney who can determine the length of tasks down to the minute, you cannot be sure that you are being paid a fee commensurate to your skills and time spent. Additionally, you need to be able to prepare a bill that explains the complexity of the legal matter at hand, convincing the client that he or she received something of value equal to the amount charged.
Solo attorneys with small practices can keep track of time with an Excel spreadsheet, but attorneys with broader practices or in larger firms require software that is multifaceted: that can keep track of time, monitor the trust account, prepare payroll, and perform other financial tasks. Until self-aware programs are developed, humans will be needed to enter the data, but existing programs can still save you time and money.
Consider A Program’s Specifications
If you use or plan to use case management software in your practice, the billing system should be able to interface with it. The system should be easy to use, reliable, and cost effective. A basic system should be able to track time and associate events with clients and their files. It should also be accessible remotely, compatible with office programs such as Word or WordPerfect, and able to connect to and synch with handhelds such as a Palm T|X or Blackberry Storm.
Most billing software does not just track time and organize bills but also presents the data to help a lawyer prepare a budget or determine whether a flat fee is possible for certain projects. Arranging client information by category can allow an attorney to determine the cost and time for a specific task. Based on that information, he or she can give the client an estimate of the cost of a project and, perhaps, separate certain tasks and bill those at a flat rate. Particularly with matters such as completing registration forms and corporation documents, it is my experience that most clients prefer to hear that a project will cost X amount of dollars rather than take about X number of hours to complete.
Time Matters from LexisNexis, a popular case management program, is capable of arranging information by category. Besides automatic time entries, the program can keep track of expenses and group billing information with the case file (as long as you use the program’s billing and accounting component). To organize tasks without resorting to long or complicated names, use the billing codes provided by the American Corporate Counsel Association’s Uniform Task-Based Management System (UTBMS). Although these are more popular with large law firms, small firms can also use them. UTBMS codes can be found at www.abanet.org/litigation/utbms. The site provides codes for litigation as well as counseling, projects, and bankruptcy sets.
Add In License Fees
User licenses for billing software can cost between $200 and $2000 per year. Add to this the cost of the training consultant, and you can see that setting up a system is not something to be undertaken lightly. TABS 3, PC Law, TimeSlips, Amicus Accounting, and TimeSolv Legal are examples of time and billing programs that, although relatively similar in terms of how they keep track of time and manage bills, offer different features such as connecting with handheld units, or importing information from other programs.
Because software fees can be high, identify the features of the program that will be most useful. To help solo and small firms, the ABA has created a chart of the various case management programs with integrated time and billing software. This can be found on the ABA’s website. I recommend that you review it, and in doing so, consider what program will work in your practice and how you will use it to the advantage of your clients.
