Client Friendly Billing – Time Entries

A new year brings new resolutions. Despite the time of year, however, we practitioners are always resolving to “keep better track of our time” or “improve our collections.” The importance of effectively performing these two tasks cannot be understated, particularly for solos or smaller firms. But it is hard to keep track of every minute of every day. And it is often even harder to “justify” the amount of legal fees that we have incurred on behalf of a client (perhaps a friend or family member), even though those fees are completely legitimate, justified, and often discounted.

Here is a quick tip

Just recently, I was on a phone conference with a client and a couple of his other lawyers. During that conversation, I learned that one of my billing practices was not only appreciated but had actually increased my credibility as a lawyer and the credibility of my time entries and monthly bills.

It is really simple. As an example, when I get an email from and/or respond to an email from a client, I make sure that it gets entered into my time tracking system. I also make sure that it shows up on the monthly invoice sent to my client. The key, however, is that if the email is not substantive or only takes a few minutes to read or respond to, I do not bill for it. Here is an example of a time entry that might show up on my bill:

  • Email to/from client re: status of case and recent developments (0.2) (not billed).

I track the time so that it shows up in my productivity report but I make sure that my client doesn’t get charged for it. I am able to accurately account for my time and, more importantly, make sure that my client knows I did work on their matter without billing them the time. In my mind, certain actions and tasks should not be billed but that does not mean that clients should not know that these activities are taking place. Clients appreciate it when they find out their lawyers are working for them without billing them for every single minute. Many attorneys may leave these “meaningless” time entries off their time sheets or invoices but, as a client, would you rather see:

  • Phone conf/ w/ opposing counsel re discovery issues (0.60)
  • Email to/from client re discovery issues and specific information needed from client (0.30).

Or

  • Email to/from client re anticipated discovery issues (0.10) (not billed).
  • Phone conf/ w/ opposing counsel re discovery issues (0.60).
  • Email to/from client re conf/ w/ opposing counsel re discovery issues (0.20) (not billed).
  • Email to/from client re discovery issues and specific information needed from client (0.30).
  • Email to/from client re follow-up on additional discovery information (0.10) (not billed).

Were if I was inside counsel (or even an individual), I would prefer the second set of time descriptions. Not only does it illustrate the amount of time my lawyer is working on my case, it also shows that I am not getting nickel-and-dimed by my attorney. In both instances, the client is getting billed for the same amount, but in the second approach, the client gets an idea of everything else that is happening behind the scenes–things that many clients are not aware of or do not consider. This goes back to the 10/7 rule (it takes 10 actual hours to actually bill 7 hours). Not only are you keeping a more accurate log of your time, but you are also giving your client an idea of the behind-the-scenes work that helps to justify that high hourly rate. In other words, you are accounting for the 10 hours even though you are only billing for the 7.

What sparked this post?

My client told the other lawyers on the conference call that, “[Tyson] is extremely conscientious about billing…”, and went on to describe how I did a lot of work behind the scenes but only billed for the substantive stuff (and this is a fairly sophisticated client). That is high praise when pitching your services or hoping to obtain new clients. “Well, the two things I know about him are that he is going to do excellent work and that he is going to bill you fairly.”

The pros and cons

Now, one added bonus and one negative aspect of using an approach similar to this. The added bonus is that my clients are less likely to question my bills. They know that if they were billed for something (whether it was a phone conference, emails to or from various people, or research), it is a legitimate charge (otherwise, it would have appeared as “not billed”). A broad research or drafting entry is more palatable because they know that I only bill for things that “deserve” to be billed for. The downside to this approach is that those 0.1 and 0.2 entries really start to add up over time. In the example I presented above, I billed 0.90 where I could have billed 1.30. That can add up to a lot of fees in the long run. Is the cost/benefit really worth it? That is something you will have to decide for yourself, your practice, and your clients.

Happy clients

To me, having clients who are “happy” with their bills, happy to see that they are not getting billed if they send me an email asking for an update, happy to pay the time entries that actually are billed, well, that is a sacrifice I am willing to make. I have been able to find the right balance and the more I have used this approach, the better I am at knowing when to bill and when not to bill a client for a particular task. And never, ever (ever) discount client loyalty, word of mouth, and goodwill associated with the way you practice.

Now, for my bill to the Lawyernomics Blog:

  • Research and draft post for Lawyernomics Blog; proof and finalize for publication (1.20) (not billed).

About the author: Tyson B. Snow, Esq., is a founding partner at Mumford West & Snow, LLC, in Salt Lake City. His practices focus on management-side employment litigation and all facets of technology-related litigation. He regularly blogs on the interplay of social media and the law at his Social Media, Esq.™ blog. You can follow him on Twitter at: @tysonESQ.