Law Firm Billing Policy Primer

Sure, I hate hourly billing.  You don’t have to read much further than here here here to know that.  But keeping track of time is not a sin.  And if you have to charge by the hour, or the client prefers it, you ought at least have a progressive written billing policy.

An example of good service is making sure your clients understand that you will never bill them for phone conversations that last less than ten minutes, conversations which are directed at determining and defining client problems or conversations which do not add significant value to solving client problems. One of the most significant complaints that I hear from clients is their fear that if they call their lawyers they will be billed. In fact, that is exactly what occurs in most firms. Why would any law firm put such a huge barrier between themselves and their client? How can a lawyer hope to learn about issues which might require legal services when they put a system in place which discourages client contact?

I don’t mind spending a couple of hours trying to get to know a clients business model and identifying problems. These are the same problems that typically result in detention and fee based services on the back end. I have always been amazed that most hourly billing law firms charge their clients for each and every phone call, including phone calls made by the lawyer to the client. This approach creates a disincentive for clients to contact their lawyer. I have had to continually reinforce to my clients that they will not be billed when they call me on the phone to discuss general matters, case status or new issues which the company is facing. In essence, I have to beak through the client s prejudice against calling me as their attorney.

Of course, the phenomenon of billing clients for every phone call arose out of an hourly billing model, which, over time, worked to capture every minute as a billing event. Most hourly billing firms are so focused on capturing every moment of time as a billable event that they have forgotten to use common sense. My clients love the fact that I don’t bill them for most phone calls. In order to remind them that they won’t be billed for those calls I include a narrative of the conversations on a billing invoice which shows up as a zero billing item. That way, they can see that we had a phone call and they weren’t charged.