Is The Billable Hour Holding Your Firm & Staff Back?
June 18, 2015
Billing by the hour may be the traditional invoicing method for small law firms to charge clients, but that doesn’t necessarily mean it’s the best option for you and your clients. Recently, many small law firms have begun moving away from hourly billing, opting for a flat rate fee based on each client’s legal needs. Has your firm ever reconsidered its billing practices? In doing so, you may find a new approach works better for both your firm and your clients.
Consider These Law Firm Billing Practices
Prioritize value, not hours
When your firm charges clients by the hour and holds lawyers to billable hour targets, you send a message about your priorities. This practice tells your attorneys that the value of their work can be measured by how much time they spend on a given matter, rather than by the quality of their final product. Quality is always better than quantity.
If you free your attorneys from the billable hour, you encourage them to adopt efficient practices that could streamline service and provide a better experience for both lawyers and clients. You also free your attorneys to better manage their time by rewarding the timely completion of high-quality work.
Give clients clarity
Since clients hate the uncertainty that comes with billable hours, you can greatly improve their experience with your law firm by providing upfront, unchanging costs.
When determining how much to charge for certain types of work, your firm will still use time estimates to determine the correct amount to charge. While this may result in some matters that bring in less money-per-hour than expected, your firm will gain client goodwill and loyalty. The firm can also benefit from increased certainty surrounding incoming payments, and even pick up more clients in the time saved through more efficient practices.
What type of billing process does your small law firm use? How does your method help your firm’s productivity and client relationships? Share your thoughts with us on Twitter by tweeting at @SmokeballNews!