Customized Legal Billing for Varied Fee Arrangements

For any law firm to be successful, it has to understand the needs and priorities of the client and work in a way that adds value. Typically, clients may want the firm to offer alternative options to hourly billing and charge an appropriate fee based on the value of their service. From the client’s perspective, the value the attorney has provided is judged depending on the results achieved. But for lawyers & law firms, the thing that is important is to get paid for the time spent on the client case.

Today, many law firms have realized that they need to be flexible in fee and billing arrangements to keep their firm profitable and make clients happy. For this reason, they are offering varied fee options and flexible payment alternatives for clients convenience, instead of rigidly continuing traditional billing methods. In exploring alternative fee options, the law firms are better served by taking the help of a good legal billing software. Software from which they can generate bills for different payment arrangements such as hourly, fixed fee, percentage rate, contingency, retainers, and disbursements, etc. Especially by using legal billing software on cloud, the law firms can take advantage of many advanced features and have flexibility over different billing arrangements.

Hourly Fee

This method of billing arrangement is typically common where law firms bill their client’s specific hourly charges as negotiated with the client. In such cases, the lawyers billable hours are recorded under the relevant matter, and statements are generated accordingly as per the hourly rate. However, the hourly billing method can also have different hybrid arrangements. Arrangements such as mixed hourly rates where different billing rates are charged for various billing hours, flat / fixed fee plus hourly where certain hours are charged flat rate and others on hourly billing, hourly rate plus contingency where the portion of fee is hourly, and a percentage of contingency fee is offered upon successful closing of a case, etc. Any expense incurred by the attorney while working on the case is also tracked and included in the billing.

Fixed / Flat fee

This type of billing involves fixed or flat rate for a defined service provided to the client which could be the total fee for the whole service or the fee for handling just a portion of the case. In some cases, the clients can also negotiate for blended fee arrangements on a particular matter where individual tasks are assigned fixed rate, and others are offered as a percentage of value.

Percentage

Unlike contingency or success fee, percentage billing fee is based on charging the client a percentage rate on the amount involved in the matter. This type of billing is mostly negotiated in cases where the amount is predetermined. Here the rate at which the client is charged could be the same for the whole service or may change as per the negotiation.

Task-based fee

It is another billing practice where attorneys come up with a budget in advance of performing a particular task related to a client case. Many times they consider UTBMS (Uniform Task-Based Management System) standard codes to categorize the billing and evaluate the cost of their legal work. The work performed by the attorney has billed accordingly but not exceeding the estimation of proposed budget. This type of billing arrangement will help both the clients and law firms to track the budgets and decide whether to proceed with a particular task or not.

Contingency fee

In a contingency fee arrangement, attorney fee is linked to the success or failure of the case. In many cases, the contingency fee is combined with hourly or flat rate to guarantee a minimum amount to the attorney. Upon winning the case, the lawyers will receive a certain percentage as contingency fee on the total amount of settlement. The percentage of the fee offered will mostly depend on the complexity of the case. Typically, law firms will have a fee agreement contract with the client, based on which billing would be done for the appropriate amount.

Retainer fee

In this arrangement certain amount is paid to the attorney upfront before the beginning of legal services. As the case progresses, the charges for attorney service is billed against the retainer fee, and the amount gets deducted from this individual account. Costs like court filing fee, photocopy costs and other expenses are considered as disbursements and are included in the billing in addition to the attorney charges.

The Legal billing software from TimesManager is a cloud based system designed specifically for law firms to efficiently manage time tracking, invoicing & billing activities. TimesManager Legal billing software offers accessibility to time and expense tracking, split billing, CRM and document management. To make the bill processing more efficient, the software also integrates with LEDES, ABA and UTBMS task code applications.