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Building trust through billing transparency

Noel Peel

Written by

Noel Peel

|

June 3, 2021

We’re hearing a lot about transparency these days. It is a kind of elixir of modern management, widely discussed as a way to build value with every constituency an enterprise may have, including shareholders, communities, regulators, employees, suppliers and customers. In fact, there has been so much transparency that there are now cautions from the Harvard Business Review and others about the dangers of too much transparency.

On the other hand, a well-known and well-worn negotiating adage is, “When you’re buying, break it down.” Sellers and service providers have traditionally, almost instinctively, resisted the transparency that this approach suggests. “Experts” even offer advice on how to avoid transparency, without ever identifying what it is that is wrong with it. Why do buyers want to “break it down?” Most often, they simply want a basis to trust that the price is fair for both sides.

Where do or should law firms stand on the issue? What does transparency have to offer or inform the thinking of lawyers and law firm managers? After all, an hour is an hour, the service is a professional service focused on the result, so what the client needs to know is that you are working on the file and making progress. Updates can be given by telephone or in meetings, which have the advantage of being billable time. The purpose of a bill for services rendered is to notify the client that work has been done and that payment is due.

If you recognize this type of thinking in yourself or your firm, please keep reading.

In fact, study after study shows that consumers of both goods and services place a high value on transparency and prefer, by large margins, to do repeat business with suppliers that commit to transparency. The greatest opportunity for law firms, especially medium- and small-sized law firms, to take advantage of the documented benefits that transparency offers is found in the humble monthly bill.

Billing transparency helps attract and retain every type of client. The individual client, who may not be experienced in buying legal services, will see where the time is spent on his file and have the opportunity to ask specific questions about why and how things are accomplished on the file. The corporate client is focused on efficiency, who and how many are working on the file, what exactly are they each doing, how many people are going to the same meetings, actual costs compared to budget, etc. A cloud-based law firm management software provides the ideal platform to satisfy both types of clients, while saving you time and immediately improving the firm’s financial performance.

Case activity and billing issues can be discussed in email summaries, telephone calls, and meetings, but nowhere near as completely as can be done when you begin with the information that a billing software such as Smokeball provides. You will be able to show your clients exactly what has been done on their case in each tenth of an hour they are billed for. They will see the complexity of the case, how the various themes are being developed, the value the firm brings to the problem, and be able to better anticipate the trajectory of the case.

Time entries and invoices created with Smokeball turn question-posing entries such as, “Continue work on summary judgement brief,” into self-answering items, like this, “Revised reply to breach of contract counts with new case law, incl. XYZ v. Macy’s.” Clients will see exactly what you are doing every minute you are working on their file. Establishing trust in the usefulness and accuracy of your monthly invoices is an essential building block in constructing a trusting and long-term client relationship.

Other building blocks in the trust relationship include staying in compliance with your state’s ethical rules, and observing the client’s own policies with respect to billing, gifts, entertainment, budgetary requirements, etc. Smokeball’s cloud-based law firm software is uniquely positioned to help you meet and exceed your clients’ expectations in each of these areas.

Building trust in your firm has never been more important; use Smokeball to accelerate the process while improving your bottom line. Contact us today for a free, personalized demonstration.

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