1. Dr. Laurie Dean-Newton Tuesdays 6:15pm-9:45pm R206

2. Introduction to Timekeeping & Billing Tracking time for the purpose of billing clients is called timekeeping Timekeeping and billing are important issues in any firm because the only thing lawyers have to sell is their time The expenses attorneys incur on behalf of clients must also be tracked for reimbursement

3. Expenses Expenses are recorded on expense slips Common expenses – Copying costs – Court reporter fees – Electronic legal research – Expert witness and witness/subpoena fees – Filing fees – Overnight delivery charges and postage – Travel expenses

4. Computerized Billing Systems Saves a substantial amount of time over manual billing systems Timekeepers still must record what they do on a timeslip, which is then entered into the billing system – Some systems allow timekeepers to enter their information directly without paper slips Can produce reports that can be used to help operate the law firm business Yield more accurate and frequent billings

5. The Computerized Timekeeping and Billing Process The client and attorney reach agreement on legal feesLegal staff perform services and prepare timeslipsTimeslips and expense slips are entered into the billing systemA pre-billing report is generated and reviewedClient billings are generated and mailed or emailedManagement reports are generatedClient payments are entered into the billing system

6. Legal Fee Agreements Based on: – The type of case or client matter – The specific circumstances of each client – The law firm’s preference for certain types of fee arrangements Should also specify the legal procedures that the attorney is not obligated to provide to the client Hourly rate fee is the most common – Fee for legal services billed to the client by the hour at an agreed- upon rate

7. Types of Hourly Rate Fees Attorney or paralegal hourly rate – Based on the attorney’s or paralegal’s level of expertise and experience in the particular matter Client hourly rate – Based on a single hourly charge for the client, regardless of which attorney works on the case and what he or she does on the case

8. Types of Hourly Rate Fees Blended hourly rate – Single hourly rate set by taking into account the mix of attorneys working on the matter Activity hourly rate – Based on hourly rates that vary depending on the type of service or activity performed and the degree of difficulty of the activity

9. Contingency Fees Entitles the attorney to a certain percentage of the total amount of money awarded to the client – If no money is recovered, the attorney collects no legal fees, but is still entitled to reimbursement for all expenses incurred Typically range from 20 to 50 percent Must be in writing Risky because if no money is recovered, the attorney receives no fee

10. Contingency Fees May be used in combination with hourly fees Typically used by law firms that represent plaintiffs in cases in which monetary damages may be awarded – Personal injury – Worker’s compensation – Civil rights – Medical malpractice

11. Flat Fees Fee for specific legal services that is billed as a specific dollar amount Sometimes called a fixed fee Usually used when a legal matter is straightforward and involves few risks – Preparing a will – Uncontested divorce – Name change – Bankruptcy

12. Retainer Fees Retainer for general representation – Typically used when a client such as a corporation requires continuing legal services throughout the year – Allows the client to negotiate and anticipate what the fee will be for the year – Usually covers only general legal advice Case retainer – Non-refundable fee paid at the beginning of a matter Pure retainer – Obligates the law office to represent the client throughout the time period agreed upon

13. Value Billing Alternative to the traditional fee system Uses a type of fee agreement based on the basis of the perceived value of the services to the client Typically requires that the attorney and client reach a consensus on the amount of fees to be charged

14. Reasons for Using Value Billing Client never knows during any stage of the work how much the total legal fee will be Clients sometimes avoid calling because they know they will be charged for the time Clients have trouble seeing the relationship between what is performed and the enormous fees that can be incurred Hourly billing encourages lawyers and paralegals to be inefficient

15. Recording Time Billable hour consists of 60 minutes of legal services – Can bill in tenths or quarters of an hour When completing your time records: – Include as much detail as possible – Use clear, easily understandable language – Make sure it is legible

16. Timekeeping Practices Find out up front how many hours must be billed and track where you are in relationship to the quota Find out when timesheets are due Keep copies of your timesheets Record time contemporaneously on a daily basis Record actual time spent and do not discount time Be aware if billable hours are tied to bonuses or merit pay increases Be ethical Be aware of things that may keep you from billing time

17. Functions of a Successful Billing System Accurately tracks how much a client has paid Produces regular billings Provides client billings that are fair and respectful Provides client billings that identify what services have been performed Produces billings that are clear

18. Computerized Timekeeping and Billing Systems: Software Main menu/fundamental tasks Entering client-related information Time record data entry Expense/cost record data entry Pre-billing and final statements Management reports – Case/client list – Aged accounts receivable report – Timekeeper productivity report – Case-type productivity report

19. Timekeeping and Billing Software: Main Menu/Fundamental Tasks Generate pre-bills and final statements Manage and track pre-bills and client accounts on hold Manage and track client accounts Record client payments Manage client trust funds and retainers Set up, enter, and maintain client information Accounts receivable Management reports Enter expense costs Enter time records and attorney fee information © 1996-2010 Software Technology, Inc. All rights reserved worldwide.

20. Timekeeping and Billing Software: Client Information Client contact information © 1996-2010 Software Technology, Inc. All rights reserved worldwide.

21. Timekeeping and Billing Software: Client Information Screen

22. Timekeeping and Billing Software: Time Record Data Entry © 1996 – 2010 Software Technology, Inc. All rights reserved worldwide. Billing and payment information Client trust funds

23. Timekeeping and Billing Software: Expense Record Data Entry © 1996 – 2010 Software Technology, Inc. All rights reserved worldwide. Amount Transaction code Description of work done Hours worked Date Timekeeper Time record history Clock timer Client Rate

24. Timekeeping and Billing Software: Generating Final Bills © 1996 – 2010 Software Technology, Inc. All rights reserved worldwide.

25. Timekeeping and Billing Software: Generating Final Bills © 1996 – 2010 Software Technology, Inc. All rights reserved worldwide.

26. Timekeeping and Billing Software: Management Reports © 1996 – 2010 Software Technology, Inc. All rights reserved worldwide.

27. Electronic Billing Involves sending bills that conform to the Uniform Task-Based Management System (UTBMS), a standard way of referring to timekeeper tasks, and comply with the Legal Electronic Data Exchange Standard (LEDES) Many e-billing vendors are application service providers (ASPs) that receive data from law firms, and operate the software over the Internet Some clients contract with their own ASP to audit bills

28. Integrating Timekeeping and Billing, Accounting, and Case Management All three types of software must be able to communicate with one another and share information Three methods of integration – Separate software programs exchange information among themselves – One software product performs all three of these functions – Integration is ignored and the legal organization must duplicate its efforts

29. What to Look for in Timekeeping and Billing Software Timekeeping and billing software should: – Be flexible, allowing the firm to charge different rates, mix different fee arrangements, etc. – Provide a wide variety of billing formats – Be easy to use – Give the user the flexibility to bill each client whenever the user wishes – Allow users to define a list of timekeepers and activities – Include plenty of room for a description of the legal services provided

30. What to Look for in Timekeeping and Billing Software Timekeeping and billing software should: – Permit users to edit timeslips or expense slips – Offer plenty of management reports and formats to help management operate the firm – Utilize a robust security system – Have the ability to integrate with accounting and case management software – Include the ability to comply with the UTBMS and LEDES protocols

31. Ethical Considerations Regarding Legal Fee Agreements Fee agreements should be in writing – Contingency fee agreements must be in writing – Contingency fees are not allowed in criminal and domestic relations proceedings in some jurisdictions Only a “reasonable” fee can be collected Rules of many state bars provide for oversight/arbitration on fee issues Charging an unreasonable fee may constitute criminal fraud

32. Factors Used to Determine if a Fee is “Reasonable” The time and labor required The likelihood that the acceptance of the legal matter will preclude the lawyer from accepting other cases The customary fee in the area for such services The outcome of the matter, including the amount involved Any time limitations imposed The type, nature, and length of the professional relationship with the client The ability of the lawyer involved, including experience, reputation, and ability Whether the type of fee was fixed or contingent

33. Ethical Problems Can you bill more than one client for the same time? When billing by the hour, is there an ethical obligation to be efficient? Should you bill for clerical or secretarial duties? Should you bill for the mistakes of the law office? Must a task be assigned to less expensive support staff when possible?

34. Questions?

35. Next Week Read Chapter 5 Hands On Exercises