The Institute for Paralegal Education

Welcomes You to

Ethical Issues and

Responsibilities

in Billing For Paralegals

ETHICAL ISSUES AND RESPONSIBILITIES IN BILLING FOR PARALEGALS

TABLE OF CONTENTS

Page #

Speaker Biography ........................................................................................................ 1

PowerPoint Slides ......................................................................................................... 2

Billing and Collections ................................................................................................... 9

Are You Getting Paid For What You Do? ..................................................................... 13

Effective Billing Can Make a Difference ...................................................................... 15

Time Tracking Solutions .............................................................................................. 17

Appendix A – Sample Time Sheet (No Time Increments) ............................................ 19

Appendix B – Sample Time Sheet (Fifteen Minute Increments) .................................. 20

Appendix C – Sample Time Sheet (Six Minute Increments) ........................................ 21

Unlawful Practice of Law ............................................................................................. 23

Beverly Michaelis received her J.D. from Lewis & Clark Law School. She is a member of the Oregon Bar with over 20 years experience in the legal field. Ms. Michaelis practiced with a personal injury firm in Portland and provided pro bono legal services through the Volunteer Lawyers Project for over 8 years. She is a practice management advisor for the Professional Liability Fund, where she provides confidential assistance to attorneys and law office personnel in docket control, software, conflict of interest systems, file management, trust accounting, time management, and other practice management issues. Before joining the Professional Liability Fund as a practice management advisor in 1996, she was placement director and associate executive director of the Multnomah Bar Association for 8 years. She is co-author of A Guide to Setting Up and Running Your Law Office, A Guide to Protecting YourClients’ Interests in the Event of Your Disability or Death, and A Guide to Setting Up and UsingYour Lawyer Trust Account published by the Oregon State Bar Professional Liability Fund.

Blog: http://oregonlawpracticemanagement.wordpress.com/ Web site: http://www.osbplf.org Twitter: http://twitter.com/OreLawPracMgmt LinkedIn: http://www.linkedin.com/in/beverlymichaelis Google+: https://plus.google.com/u/0/105625849928945743762#105625849928945743762/posts

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 1

The Institute for Paralegal Education

Welcomes You to

Ethi l I d R ibilitiEthical Issues and Responsibilities in Billing For Paralegals

Ethical Issues and Responsibilities in Billing for Paralegals

• July 25– 1:00 PM – 2:00 PM Eastern

Presented by Beverly Michaelis, J.D.

Practice Management Advisor

Oregon State Bar Professional Liability Fund

1,936 1,625,

1 4121,412Topics

1. Ethical Billing Practices

2. The Relationship BetweenProfessionalism and Billing

3. How to Avoid Crossing the Line

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 2

Ethical Billing Practices

Timekeeping Must Be

• Thorough

• Accurate

• Honest

• Complete

NALA and NFPA Model Codes

Prohibited Billing Practices

1. Misrepresenting Work Performed

2 Padding Time2. Padding Time

3. Billing Under Attorney’s Name

4. Charging for Clerical Tasks

Know the Basics

• Your Billing Goals

• The Firm’s Process

• How to Account for Non-Billable Time

• Relationship to Your Evaluation

Steps for Success

Budget Your Time

1. Annual Goal

2. Monthly Goal

3. Bi-Weekly Goal

4. Weekly Goal

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 3

Keep a Record

• Retain Copies of Your Timesheets

• Run “Before” and “After” ReportsRun Before and After Reports

Manage Your Time

1.Identify Time-Wasters

2.Cast Out Clutter

3.Banish the E-Mail “Pop-up”

4.Go on “DND”

Keep Accurate Time

• Stop Debating – Capture it All!

• Know How Your Time is Spent• Know How Your Time is Spent

• Know Your Non-Billable Hours

• Contemporaneously = NOW!

$25/day

$125/week

$500/month

TINY TIME ADDS UP

$6,000/year

How?Keep it Simple

1. Start

2 Stop2. Stop

3. Client

4. Description

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 4

Block it Out! DIY Digital Solutions

• Excel Spreadsheet

• Word TableWord Table

• Formulas

• Auto-Expand Abbreviations http://tinyurl.com/texter-abbrev

Chrometa

http://tinyurl.com/6k929hb

There’s an App for That!

If You Use Paper

• Find a Format that Works

• Practice ABY (Anything But Yellow)Practice ABY (Anything But Yellow)

• Dedicate a Place and a Pen

Other Options

• Dictate Your Time

• Combine To-Dos and Time LogCombine To Dos and Time Log

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 5

Best Practices

• Enter Time Directly

• Run That Timer!Run That Timer!

• Use Billing Codes

Accurate Time Entry

1. Helps with Staffing Decisions

2 Contributes to Accurate Budgeting2. Contributes to Accurate Budgeting

3. Benefits You!

4. Avoids the Snowball Effect

The Magic Formula: W3

Who?

What?What?

Why?

Professional StatementServices Rendered

Review Documents $500.00

Summarize Deposition $750.00

Analyze Discovery $375.00

August 30, 2013

Review, analyze, and index three boxes of documents produced by Defendant ABC in response to Plaintiff’s Fourth Request for Production of Documents

5.0 hours @ $100/hour $500.00

Professionalism and Billingand Billing

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 6

By encouraging the use of lower-cost paralegals, rather than attorneys whenever possible permitting

Missouri et al. v. Jenkins (1989)Richlin Sec. Service v. Chertoff (2008)

rather than attorneys whenever possible, permitting market-rate billing of paralegal hours encourages cost-effective delivery of legal services.

Justice Brennan

Factors for Awarding Paralegal Fees

1. Qualifications

2. Work Performed

3. Billing Detail

4. Going Rate

How to Avoid Crossing the Line (UPL)the Line (UPL)

1. Accepting a Case

2. Declining a Case

Don’ts

3. Setting Fees

4. Selecting Legal Documents

5. Drafting Without Supervision

6. Interpreting Documents

Don’ts

p g

7. Giving Answers Based on Rule, Statute, or Case Law

8. Telling Clients Their “Rights”

9. Making a Judgment Call

Don’ts

10. Appearing in Court

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 7

What Can I Do?

• Convey Facts

• Relay Simple StatementsRelay Simple Statements

• Send Transmittals

Know the Rules inY J i di ti !Your Jurisdiction!

THANK YOUfor attending today’s Teleconference/Webcast

Please visit us online at www.ipe‐sems.com for a complete list of upcoming learning opportunities or for more information.

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 8

BILLING AND COLLECTIONS

Turning legal work into income is an important aspect of managing a law practice. Instituting and following procedures for timekeeping, billing, and collections reduces stress and makes financial success possible. Billing procedures must include accurate timekeeping, immediate entry of time, preparation of statements, and monthly billing.

Timekeeping

Billing begins with accurate timekeeping. Your daily time records should account for every tenth of an hour. Enter the time spent after each activity in your time and billing program or record it on a daily time sheet. (See samples at the end of this chapter.) If you have trouble keeping current with your time entries or maintaining time sheets by hand, dictate the time after each activity. Procrastination in timekeeping causes a loss of billable time, because lawyers generally underestimate time when they reconstruct it later.

When starting out, keep track of every block of time throughout the workday. Account for

billable time and also for time spent on administrative chores, breaks, and so on, to give you a picture of your total productivity. You can use the information to decide how much time you should be working and how efficiently you are working. It also gives you an idea of how much a particular legal procedure costs you. You can then use this knowledge to set flat or fixed fees and give clients accurate fee estimates. A total productivity breakdown also allows you to know when time spent on administrative chores can be shifted to a staff person.

Preparing Billing Statements

Your bills should provide the client with specific information about what you did to earn the fee. Many fee disputes are caused by misunderstandings about billing statements. The bill should show fees charged, costs incurred, and trust account activity, as applicable. (See the sample bills at the end of this chapter.) Always include a due date. Many clients prioritize bills according to due dates and will place a bill without a due date at the bottom of the bills-to-pay pile.

Remember that you should not transfer client funds out of the Lawyer Trust Account until

you have given notice to the client. (See the PLF publication, A Guide to Setting Up and Using Your Lawyer Trust Account.) Be sure to show the trust account transfer and balance on your monthly statements so that you can make all the trust transfers at once after you have sent out the statements.

When describing your work, be sensitive to the client’s perceptions. For example, many

clients do not want to be charged for conferences between lawyers. Some clients do not think their lawyer should charge for research because they are supposed to know the law. Some clients do not know that 0.5 on the bill means a half-hour rather than 5 minutes.

Follow the “golden rules” of billing: 1. Proofread statements carefully. Clients view billing statements as a reflection of your

work. If names are misspelled or statements are incorrect, they may believe that you are not paying adequate attention to their cases. Clients immediately notice billing mistakes and are likely to be upset.

2. If you make an error on a client bill, apologize and correct it quickly and accurately the

first time. The client shouldn’t have to remind you a second time.

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 9

3. Offer a “carrot” instead of a “stick.” In lieu of late fees or interest, which may pose problems, give clients a discount if payment is made within 10 days of the billing date. This will improve your cash flow by giving clients an incentive to pay early. If you employ this technique, calculate the discount for the client and include it on the billing statement. (For information on ethical dilemmas related to billing and collections, refer to the OSB publication, The Ethical Oregon Lawyer. For a thorough discussion of truth-in-lending concerns, consult the OSB publication, Fee Agreement Compendium. See Resources, infra.)

You can avoid many misunderstandings about billing by thoroughly briefing clients at the

outset of each case. Explain how you bill and what work is required on the case. Then when the bill arrives, the descriptions and charges on it will match the client’s expectations.

If you are not using a computerized billing program, create a document in your word processing program for all current bills. Make each bill a separate page in that document and keep the bills in alphabetical order by client name. When you open a new file, insert your billing letterhead into the appropriate place in the billing document, and add the client’s name and address. Time and expenses can be entered as ordinary text or in a table. When the table feature is used, formulas can be inserted to aid with computing time spent or expenses incurred. Here is an example of three time entries created in a word processing document with the table and formula visible:

Professional Services Rendered Hours Review medical records obtained from Dr. Jones 1.5 Office conference with Dr. Jones regarding client’s prognosis 1.0 Phone conference with client regarding defendant’s settlement offer

.50

{=SUM(ABOVE)}

Here are the same time entries in a final bill, ready for the client. The table is not visible. The formula field now shows the total hours spent working on the client’s case:

Professional Services Rendered Hours Review medical records obtained from Dr. Jones 1.5 Office conference with Dr. Jones regarding client’s prognosis 1.0 Phone conference with client regarding defendant’s settlement offer

.50

3.0

Spreadsheet and database programs may also be used to create client bills. These programs have advanced features to assist with calculating time and expenses.

If your spreadsheet or word processing document becomes cumbersome to work with due

to the number of client bills it contains, it is probably time to invest in a computerized billing program. You will likely recover the cost of your investment in such software very quickly because you can use the time previously spent generating bills manually to produce billable hours. If purchasing a program is not feasible and your billing document has become too long, break it up.

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 10

Organize client bills into separate documents in alphabetical segments, such as Bills A-E, Bills F-J, Bills K-O, Bills P-T, and Bills U-Z. Set up and save each client’s statement in the proper document, for example, the statement for Sam Jones is saved alphabetically in the document “Bills F-J.”

If you are tracking your time manually, take your time sheets and enter the time into the

current bills daily. Scroll down through the bills or find each client’s bill using the search function and the client’s name. If you diligently enter your time on a daily basis, you will need to spend very little time finalizing the bills. At the end of the month, all you will have to do is make any corrections, total each bill, fill in any trust account activity, and print or e-mail the final copy.

The Monthly Billing Cycle

You should send bills monthly and at the immediate conclusion of a case. Send bills at the same time each month, preferably before the last day of the month. Most people and businesses are prepared to pay bills at the first of the month. Late-arriving bills are often put off until the next month. The longer the gap between completing legal work and billing, the less likely it is that the client will pay.

If cash flow is an issue, consider two billing cycles. Divide the client list in half. Mail or e-

mail A-M bills by the 15th and N-Z bills by the 30th. This simple step can improve your firm’s financial health by leveling the natural peaks and valleys of accounts receivable and payable. Improved cash flow is important if you need to spread out the age of your accounts receivable. (The number of accounts that are 30 days, 45 days, or 60 days past due.) Dividing the billing cycle also increases your average daily bank balance because you are collecting more accounts throughout the month. If you apply for financing, the age of your accounts receivable and your average daily bank balance will be key factors in the loan evaluation process.

Remember, clients must consent to all billing practices. Be sure to include billing

information in your fee agreement with the client or enclose a billing brochure.

Maintain Billing Flexibility

In addition to generating monthly statements, be prepared to give clients their bills on short notice – for example, when they show up unannounced with checkbook in hand. Also, have your bill ready when a client picks up final documents for a particular matter. If you maintain up-to-date records, you will be ready to tell each client what is owed at any time. And if you keep up on daily entry of time into your billing system, you can print out a statement on the spot.

Keeping billing records current also allows you to hand clients a finished work product with

the bill attached. This method works well for matters that end with the production of a document (wills, contracts, etc.).

Record Keeping

Retain a copy of each client’s bills in the client file and in a file of all bills sent out that month. Any records related to trust accounting must be held for five years after termination of the representation. ORPC 1.15-1(a).

Collections

You can usually foresee the likelihood of collecting a particular fee at the outset of a case. A client who is obviously unreliable or unable to give you money before work commences is even less likely to pay after the work is finished.

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 11

Attempting to collect delinquent amounts generally produces nothing but more headaches. Sometimes you can recover some of the debt, but clients often respond to collection efforts by filing a malpractice claim or disciplinary complaint. If a client objects to the amount of a bill, offer to use the Bar’s fee arbitration program. If you do take action to collect on debts, remember that you must abide by the debt collection laws. Any debt collection letters must contain the correct statutorily mandated language.

Time spent on collections would be better devoted to establishing a system to secure more

fees up front and end representation of clients before past due amounts have accumulated. Keep the rules governing withdrawal (ORPC 1.16) in mind when dealing with a client who is reluctant to pay. Depending on the type of proceeding and the particular court, it may be impossible for you to withdraw from representation after a certain point.

Review your accounts receivable regularly. If a client appears to be unable to pay, call and

determine his or her financial situation. Then decide whether you want to withdraw from the case or continue with the understanding that you might not be paid. It is very difficult to competently represent a client when you are preoccupied with the client’s unpaid bill.

Continuing to represent a client who refuses to pay, however, can get you into ethics and

malpractice trouble. As the client continues to withhold payment, your resentment builds, you tend to delay working on the file, and you may be reluctant to communicate. In this hostile environment, you are very vulnerable to a malpractice claim or ethics complaint. Usually, the non-paying client finds fault with you as a way of rationalizing nonpayment, and you may end up with an ethics or malpractice claim. (For more information on collection-related issues, see the discussion on Fees, infra.)

Excerpted from A Guide to Setting Up and Running Your Law Office (All Rights Reserved 2009-2013) Professional Liability Fund Reprinted with permission

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 12

PROFESSIONAL LIABILITY FUNDwww.osbplf.org

MALPRACTICE AVOIDANCE NEWSLETTER FOR OREGON LAWYERSIN

BRIE

F

THIS ISSUEJune 2005

Issue No. 95

ARE YOU GETTINGPAID FOR WHAT YOU

DO?Attorneys often ask me how they can

increase their income without workingmore hours or raising their hourly rates. Inresponse, I ask them the following ques-tions:

• How many hours do you work perweek or month?

• Of the hours you work, how manyhours do you write down and keeptrack of?

• Of the hours you write down andtrack, how many hours do youactually bill?

• Of the hours you bill, how many hoursare you paid for?

The answers to these questions shedlight on what improvements can be made –improvements that do not involve workingmore hours or raising rates. On average,attorneys are paid for only half of thehours they work. Look at the accompany-ing chart, for example. If your hourly rateis $100, working 60 hours per week wouldgenerate only $3,000 in income – theequivalent of only 30 hours of work.Tracking all your hours worked, billing allthose hours, and getting paid for all thosehours would increase your income sub-stantially.

KEEPING TRACK OF YOUR TIME

If you don’t keep a daily time sheet,you are probably underestimating the timeyou spend on client matters. Keeping adaily time sheet at your desk (or on yourcomputer) and using it as you perform

tasks greatly improves your ability tokeep track of your work. If you form thehabit of writing down your time as youdo the work, you will lose less billabletime. Good time management techniquesenable you to spend more productivetime doing billable work and less adminis-trative time trying to reconstruct yourday, week, or – for the chronically unor-ganized – month.

Blocking off time for a project (i.e.,no interruptions, no phone calls) allowsyou to bill the entire time for that matter.Constant interruptions make it extremelydifficult to accurately record time spenton a particular task or case. Blocking offtime also enables you to concentratesolely on the project at hand.

BILLING YOUR HOURS

Admittedly, it is not possible to bill100 percent of the time you spend at theoffice, but think twice before writing offyour time. Your time is valuable, and youshould be paid for your work. If you mustwrite off time, show the time on the billand reduce the charges. Recording allyour hours on the bill shows the clienthow many hours were actually spent onthe matter, and the fee discount gener-ates goodwill.

Many attorneys are turning to flat feebilling whenever possible. Clients want toknow in advance how much they will haveto pay for a given matter, and providing a“bottom line” number at the outset can im-prove client relations. However, you stillneed to track your time on flat-fee matters;otherwise, how will you know whether youcovered your costs and hourly rate? Youmay discover that you need to raise yourflat fee for future matters of the same type.

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 13

to follow up with these calls. If a client is not payingyour bill, do not take any new matters for that client.Always remember that the easiest way to avoid col-lection problems is to get a retainer up front. Themoney will then be there for you to pay yourselfwhen the work is completed.

EARNING THEIR TRUST

The more your clients trust and respect you, themore likely they will value the relationship and thework you do for them. Many things combine to cre-ate trust and respect in the attorney-client relation-ship. It is not enough to be a skilled lawyer, becauseclients expect a high level of legal skill. You mustmeet, and ideally exceed, your clients’ service expec-tations if you want to build a trusting, respectful re-lationship in which your clients will want to pay forthe services you provide.

Often the issue is not price, but value. Clientstend to focus not strictly on what you charge, butwhat they feel you gave them in return for the feesyou charged. If you build the client relationship bydelivering exceptional customer service as well as le-gal service, you will increase your value to your cli-ents, and the clients’ trust and respect will help en-sure that you are paid timely.

Dee CrockerPLF Practice Management Advisor

GETTING PAID FOR YOUR WORK

The most important rule of gettingpaid is selecting clients who are willingand able to pay for your time. Otherwise,you may find yourself providing probono services on cases that you ac-cepted because you expected them togenerate fees. Carefully screen new cli-ents to minimize the number who don’tpay for your services because they can-not afford your fees. Discuss fees withyour clients at the outset. If you findthey are unable to pay for your services,you can then make an informed decisionabout whether you want to assist them pro bono.

If you bill by the hour, be sure the client under-stands what you will be billing for. For example, inan intraoffice conference between you and anothermember of your firm (i.e., a lawyer or paralegal)about the client’s case, do you bill for both individu-als’ time? What costs do you pass on to clients(e.g., long-distance phone calls, faxes, copies)? Ex-plain to the client your minimum charge. If youcharge by the tenth of an hour (.10), let the clientknow that means your minimum charge will be for sixminutes – even if the task takes only two minutes.

Avoid clients with unrealistic expectations. Theclient who complains about everything, who de-mands constant or immediate attention, or who ex-pects extensive hand-holding is usually the clientwho is never satisfied, especially with your bill.

Before beginning work on a case, have the clientsign a fee agreement stating the services you willperform, the fee for those services, and the terms ofpayment. Clients who will not discuss or agree onfees or who will not sign a fee agreement or pay a re-tainer should set off loud alarm bells in your head.This type of client is virtually broadcasting a subse-quent fee dispute or malpractice claim. Rejecting thisclient at the outset will minimize the aggravation offee collection difficulties, as well as claims.

COLLECTING YOUR FEES

Develop a collection process for past-due ac-counts. Create form letters for overdue bills, and settime limits to trigger mailings. Include a due date onyour bill, for example, “All sums are due and payableby the 15th of the month.” Set up a schedule tophone clients to discuss payment, and don’t forget

Worked

Tracked

Billed

Paid

0 10 20 30 40 50 60

Typical Weekly Statistics

How Do Your Hours Stack Up?

Reprinted with Permission - originally appeared in the June 2005 issue of In Brief, the official PLF publication, www.osbplf.org

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 14

PROFESSIONAL LIABILITY FUNDwww.osbplf.org

THIS ISSUEMarch 2010

M a l p ra c t i ce Pr e v e n t i o n E d u ca t i o n f o r O r e g o n L a w y e r s

Issue 110

EFFECTIVE BILLING CAN MAKE A DIFFERENCEWhat clients are really interested in is the bot-tom dollar. Saying “I believe the total fees will be approximately $5,000” is a lot more under-standable to a client than just saying “I will bill at my standard rate of $200 an hour” – or saying nothing at all. If the client will be responsible for other costs in addition to the fees, explain those costs. If you require a retainer, explain how it will be applied as the work proceeds.

It may be helpful to give the client a choice of your standard billing formats and also, if ap-plicable, a choice of frequency (monthly, quar-terly, end of matter). If you prefer a certain format and frequency, tell your clients how and when you will bill, but still make sure it will be satisfactory to them. Most clients prefer to be billed regularly because it helps them plan their cash flow. It also helps you with yours. In addition, a series of smaller bills is less dis-tressing to the client than one large bill at the end. Finally, tell the client you will confirm all of this in a written retainer or engagement let-ter that you’ll ask the client to sign and return to you.

By taking the time to cover these matters at the outset of the representation, you will not only avoid most billing and collection problems but also establish a strong client relationship and trust – which is the ultimate goal.

Keep the Communication Flowing

Even in this age of electronics, the gist of the old adage, “shower the client with paper,” is still relevant. Send clients copies of all appro-priate letters, memos, and relevant documents. It’s important for the client to have access to information.

Do your clients rush to pay your bills? Cli-ents often dread getting a lawyer’s bill as much as going to the dentist. And if that’s not bad enough, sometimes a carefully developed client relationship may be unnecessarily and even per-manently damaged by the way bills are prepared and submitted. This doesn’t have to happen. If you use the right strategy in your billing pro-cess, you can actually improve your client rela-tionships as well as your cash flow.

Start at the BeginningAll too often, billing and collection prob-

lems arise because the lawyer fails to discuss fees, costs, and billing procedures with the cli-ent before starting work on the matter. Corpo-rate general counsel usually require a budget or confirmed fee arrangement, but other clients also want to know what your legal services will cost. Don’t wait for them to ask. Show that you understand their concerns by discussing finan-cial matters at the very first meeting.

Describe for the client how you will handle his or her matter – the strategy, steps, timetable, and whatever else might be involved. If other lawyers or staff will be assisting you, explain who they are and what their roles will be. If pos-sible, introduce these people to the client. Clarify that you will involve these other professionals for two reasons: (1) to provide the needed expertise, and (2) to save the client money. Then discuss the fee arrangement, whether it will be on an hourly basis, a fixed fee, or some other arrangement. If you are billing hourly, give the client your rate and also the rate of each other person working on the case.

Don’t stop there, however, because the client may have “sticker shock” at some of those rates.

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 15

Discuss all steps and strategies with the client as the matter progresses. When possible, or when required by the Oregon Rules of Professional Responsibility, present all the options and give the client a choice. For example, explain that “I believe we could settle this case now for [estimated amount], or we can go to trial. [Explain risks and potential rewards of trial.] What would you prefer?” If you have a rec-ommendation, give it. But give the client a choice whenever you can – and know when the ethics rules require it.

If something occurs that could cause your final fee to ex-ceed your initial projections, advise the client immediately. Don’t just proceed with the work. No client wants to be sur-prised with unexpected fees that were not discussed.

Use Billing As a Marketing ToolA wise lawyer once said, “I bill promptly and regularly,

while the glow of appreciation still shines in the client’s eyes.” This is a good rule to follow. Here are some other points to keep in mind.

● Make your bills descriptive. Specifics on a billinform clients of your efforts on their behalf. It also adds value to your services. For each entry, briefly describe the purpose of the action taken. For example, “Review of documents to determine conformity with client’s in-tentions” (rather than simply “review documents”) or “Conference call to Mary Jones to discuss extending lease” (instead of just “phone call”).

● Avoid terms that may raise a red flag. Cer-tain billing entries consistently vex clients, regardless of how necessary or warranted the action. Some of these statements are interoffice conference (clients don’t want to pay for legal professionals in the same office to talk to one another); research (clients feel you should know the law); travel time (unless you made some arrangement beforehand, clients won’t pay for this); and review of file (unless you give a compelling reason). If you want to capture and bill for this time, discuss it with clients up front and explain why it is important and how it will further their case or matter. Another entry likely to raise a red flag is billing for short phone calls, unless you have an agreement with the client. Clients consider this “nickel and diming.” However, entering the time and then marking it as nonbillable will please your clients.

● Don’t charge for insignificant items. One ofthe biggest sources of client annoyance is being billed for small costs such as postage, messenger service, phone service, and the like, because clients consider these a cost of doing business. You can greatly enhance your standing with clients by not billing for these inci-

dental expenses. Tell the client which costs you charge for and which you don’t, and include a statement in your retainer letter to that effect. Consider capturing these business expenses when you next assess your hourly rate or give a fee quote for a case or matter.

● Review every bill carefully before you sendit. Put yourself in the client’s position. Would you be willing to pay the bill? Send a cover letter, however brief, with every invoice, and always include the magic statement, “If you have any questions about this bill, please contact me.”

The Golden OpportunityPresenting the final bill on a matter is a golden op-

portunity for perpetuating a client relationship and laying the foundation for future work and referrals. The secret is to treat the final bill not as the end of a matter but as the close of a chapter in a continuing relationship.

Always include a cover letter specifically stating that this is the final bill. Clients need to know the matter has been completed.

Thank the client for allowing you to assist him or her. Include reminders about anything else the client needs to do (like “Put your will in your lock box”). In addition, refer to other services you or your firm could provide and suggest that the client keep this in mind. Conclude by say-ing that most of your business comes from client referrals and that you would appreciate such referrals if the client is asked about a lawyer.

Billing is not just a mechanical or financial process. By applying marketing strategy, it can become a client development tool as well.

Dee CroCker

PLF PraCtiCe ManageMent aDvisor

Reprinted with permission - originally appeared in the March 2010 issue of In Brief, the official publication of the PLF, www.osbplf.org.

Ethical Issues and Responsibilities in Billing for Paralegals IPE Page 16

TIME TRACKING SOLUTIONS

Apps Time Master http://www.on-core.com/timemaster/ Start and stop timers for projects Time entry Time increment control (can track in six minute increments to allow for billing in tenths of an

hour) Expense entry Backup and restore – via the app, through iTunes, or via Dropbox integration Exports to Quickbooks Syncs with iPhone and iPad (extra purchase required) Reporting capability iSlips http://www.brainfreezesoftware.com/index.html Start and stop timers Time entry Time increment control (can track in six minute increments to allow for billing in tenths of an

hour) Expense entry Client dialing and e-mailing Wireless data transfer with Timeslips Works with iPhone, iPad, iPod Touch Reporting capability For other recommendations, see these posts: http://www.iphonejd.com/iphone_jd/2009/01/time-tracking-apps.html http://time-tracking-management-software-review.toptenreviews.com/complete-time-tracking-review.html

Options for Mac Lawyers The Fine Art of Getting Paid on a Mac - ABA Law Practice TODAY http://www.americanbar.org/publications/law_practice_today_home/law_practice_today_archive/october12/the-fine-art-of-getting-paid-on-a-mac.html

Interactive Paper Time Sheet Sparkling Sheet www.sparklingsheet.com See current tasks and calendar appointments Automatically sums up time spent performing daily tasks Weekly/monthly reporting Described as a “magical, interactive” paper time sheet

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Legal Time and Billing Software Guides Time and Billing Software Comparison Chart - ABA Legal Technology Resource Center http://www.americanbar.org/groups/departments_offices/legal_technology_resources/resources/charts_fyis/timeandbilling.html Buyer's Guide to Legal Billing Software - Technolawyer http://www.technolawyer.com/tll/legal-billing-software.asp

Best Practice Tips ABCs of Best Billing Practices - ABA Webinar http://www.americanbar.org/content/newsletter/publications/youraba/201212article03.html Avoid Mistakes with Time, Billing and Accounting Software http://www.lawtechnologytoday.org/2013/04/avoid-mistakesbuying-time-billing-and-accounting-software/ Billing & Collections - ABA Law Practice TODAY http://www.americanbar.org/publications/law_practice_today_home/law_practice_today_archive/october12.html Finance: Timekeeping by the Numbers - ABA Law Practice Magazine http://www.americanbar.org/publications/law_practice_magazine/2012/july-august/finance.html Ten Things You Need to Know About Back-Office Systems - ABA GP/Solo http://www.americanbar.org/publications/gp_solo/2012/march_april/ten_things_you_need_know_back_office_systems.html

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Unlawful Practice of Law

ABA Task Force on the Model Definition of the Practice of Law http://www.americanbar.org/groups/professional_responsibility/task_force_model_definition_practice_law.html ABA Standing Committee on Paralegals http://www.americanbar.org/groups/paralegals.html ABA Model Guidelines for Utilization of Paralegals http://www.americanbar.org/groups/paralegals.html

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