Earning Fees and Billing Clients

If we examine the specific process of recording fees and then turning those fees into an invoice (which will hopefully get paid), what seems at first a very simple concept can become convoluted and fraught with problems; duplication and errors and omissions!

In this article I will highlight some of the most common processes at work in many practices which we consult with on a daily basis. I will then explore how the process can easily be more efficient and effective, with a few key changes and a large dose of technology!

Good People + Efficient Process + Intuitive Technology = Perfection!

Okay… so we know that perfection is not really attainable… but we all like to try. What we are really looking to achieve is a bit of progress. Luckily, in almost every firm I have been involved with, there is ample room for improvement when it comes to raising fees and turning those fees into payable invoices:

The common mistakes we see when consulting to firms who choose to upgrade to GhostPractice are:

Manual Recording of Fees AFTER the fact
A total reliance on the physical file is the first and decisive killer to efficiency when dealing with fees. If you are picking up a physical file and then paging through it to "dictate" an account then you have already lost many fees. There is no way that the physical file really contains everything that was done in terms of phone calls; emails sent; emails received etc.

Recording fees into a fee book
Many firms started to recognise that trying to reconstruct the fees from the physical file is not a workable solution. To combat this, some thought was applied and each person or department was given a fee book. Each staff member would record all fees daily or weekly into this fee book. It would then be collected by accounts and posted into the accounts system either daily or more commonly on a weekly basis. This is a better method than "reconstructing" the account from the physical file as in 1 above.

Recording fees into a system
The above 2 (very) common scenario's represented a call to action amongst the software vendors who made a business providing software to attorneys. Many systems were written as "additional/optional modules" which would plug into the accounting system via some sort of integrated link. Again this represented some progress, but there are still some lingering issues.

While recording fees into a system represented quite a large jump in progress, compared to the other two common scenarios, certain fundamental practical problems surfaced:

1. Many of the fees billing systems were storing the data in separate databases. The link between the billing system and the accounting system was far from "integrated" and it became difficult to easily invoice clients accurately and in the format required to entice the client to pay. The fees would be captured in the billing system only to find that the accounting system would render the invoice in a format not suitable from a client's point of view. This resulted in many secretaries having to re-type the data into a "Microsoft Word" document - commonly referred to as a "Fee Note Advice".
   
   
2. The billing systems lacked in user friendliness and were either quite cryptic or just not practical when users had to sit down and use the features in their fast paced business environment. This resulted in many of these billing systems becoming "end-point administration" systems. In other words, users would just do electronically what they used to do manually. They would periodically go to the system and capture in fees on a weekly or monthly basis.
   
   
3. Most importantly, the billing systems were not integrated enough to enable users to work from "one central point". As a consequence, the billing systems became a complete chore, separated from the work they were doing on a daily basis and not integral to how the work was being done!

1. Work with the physical file.
   
2. Scribble notes onto the inside cover of the file or on bits of paper and then place them in the file.
   
3. Print and store all letters; faxes; emails in the file.
   
4. Once a month (if you are lucky) go through the file and dictate an account.
   
5. Secretary types up the account in Word.
   
6. Check and then dictate changes.
   
7. Send out the account.
   
8. Wait for payment.
   
9. Capture into the accounts system.

1. Work with the physical file.
   
2. Record all fees in a fee book.
   
3. Accounts department collect all the fee books on a weekly or monthly basis.
   
4. Accounts team capture all the fees into the accounting system (while this is underway, the staff have to keep notes and then write up fees when the fee books come back).
   
5. Accounts print out all statements/invoices.
   
6. Statements/Invoices are sent to the respective departments for checking.
   
7. If necessary, changes are made.
   
8. Statements/Invoices are sent out.
   
9. Money is collected from the clients.

1. Work with the physical file.
   
2. Record all fees in the fee billing system.
   
3. Accounts department transfer/release fees from the billing system into the accounts system.
   
4. Statements/Invoices are produced in accounts and sent to the various departments.
   
5. A fee note advice is dictated on many of the accounts.
   
6. This fee note advice is typed up in a Word document by the secretary.
   
7. The statement/Invoice is sent out with the fee note advice.
   
8. Money is collected.

1. Work with the electronic file.
   
2. Record fees as you work (often being prompted to do so as you email; produce documents etc).
   
3. Either have an invoice generate automatically every month OR generate invoices on demand (per matter).
   
4. All invoices and statements are sent to clients electronically.
   
5. Money is collected.