Imagine a luxury yacht being prepared for a journey down the east coast of the Mediterranean. The captain gives the command to pull anchor and get underway. Little does he know that the anchor remains in place even as he powers up the engines and push the yacht forward. If nothing changes, the yacht will drag that anchor all the way down the coast.

We did a lot of research prior to building NuLaw. That research continues today as we seek to make NuLaw even better. One of the things we have learned is that poor billing practices are to a law firm what an anchor is to a ship dragging it behind. Poor billing practices drag down a law firm by stealing valuable time, interrupting cash flow, and creating friction between attorneys and clients.

A big part of the solution is upgrading a firm’s billing software. For the record, we have built an ABA-compliant accounting and billing module into NuLaw. Still, we get the fact that software alone will not do it. A change of mindset may be necessary.

3 Poor Billing Practices

There is a lot we could discuss on the topic of poor billing practices. The following three practices can drag a law firm’s entire accounting and billing department down, leading to a billing process that is much lower than it needs to be.

1. Inefficient Timekeeping

Most law firm accounting departments rely on multiple timekeepers to record their data before pre-bills can be turned into invoices. Inefficiencies lead to information not being submitted in a timely manner. One timekeeper lagging behind drags down all of the others waiting to follow.

2. Manual Processes

Any portions of the billing process that require manual operation also slow things down. Those manual processes wait on data entry, review, and error correction before they can move forward. One breakdown in the manual process interrupts everything.

3. Client Demands

The bane of existence for many law firm accounting departments are clients who demand certain formats for their bills. Such demands make it exceedingly difficult to adopt a single format with efficiency built in. Thus, accommodating multiple formats gets in the way of efficient billing.

Overcoming Poor Billing

A captain sailing a yacht dragging the anchor knows there is an easy solution to his problem: he pulls the anchor. Rectifying poor billing practices isn’t as straightforward, yet it can be done. Poor billing practices can be overcome with the right strategies.

The first is to adopt paperless billing. Paper only creates issues where none need exist. Switch everything over to electronic billing and you solve a lot of the problems that come with manual processes, data entry, and so forth.

Next, we recommend using automation wherever feasible. For example, starting the automated review process is as simple as sending a pre-bill to the first reviewer. As soon as that person is done, the software automatically forwards it to the next person, and so on. If any one reviewer takes too long, the system automatically sends a reminder.

Finally, many of the billing problems law firms have with their clients revolve around non-compliant practices. As long as a law firm is making the effort to shore up accounting and billing, it might just as well upgrade software to something that is ABA compliant. A compliant accounting and billing package will alleviate many of the problems that legacy software creates.

Billing doesn’t have to be an anchor dragging behind your law firm. If it is, it’s time to pull anchor and get underway. Hopefully we have given you some good ideas to get started.