Improving Client Relationships with Detailed Billing

​[00:00:00]

Hey everyone, Scott Benton here, how are you? I am the host of the Classroom 2 Courtroom podcast where we help you easily transition from a law school student into a professional career as an attorney and where we make the practice of law fun. Now today we’re going to take a look at improving client relationships with detailed billing.

​[00:01:00]

Today, in order to help assist your overall use of the success cycle, which is what we like to talk about on this podcast, in order to help you better understand the actual practice of law, which is the goal of this podcast series, and it’s a subject that’s not taught in law school, strangely enough, but there are reasons for that.

Now we’re going to want to talk about detailed billing and how that matters when it comes to your client communications. Of course, on the success cycle, there are three parts. There’s the to do list or what we call the G sheets G for get it done. That equals a to do list.

Then you’re going to perform legal services. That’s the second part of the success cycle. And then of course, once the legal services. you’re going to immediately bill for your time. And that’s what this podcast is going to be taking a look at this particular episode. Now the point of [00:02:00] doing your billing entries in a more detailed fashion is because you really want to build transparency and trust with your client.

That’s paramount. That’s one of the most important things, transparency and trust. And you can do that through clear and concise, Detailed billing because it provides your clients with their inside clear insight into the work that the firm is being done. So you want to do clear and detailed billing because it provides your clients with insight into the work that’s being done on their case. They need to be able to look at a bill that they get with the billing entries listed out and immediately understand what work has been done.

So this is going to help your clients really see the true value. In terms of the money that they’re busy spending which reduces the likelihood later on for disputes over the fees That they’re being charged a lot of times There are legal fees being charged for many many Activities [00:03:00] that can really add up.

So Based on their case, you want to make sure that they’re seeing value for the money that’s going out, that eventually that’s going to be a good investment because there’s going to be typically money coming back in. When you look at your billing entries, you want to make sure that they’re readable and understandable because that means That your client is going to be able to read them and understand them, and they’re going to see that value.

So you want your billing to really be broken down into specific tasks, because that’s going to help manage the expectations that your client has of you, since it shows Everything that’s involved in each phase of the case, and that’s going to be right there listed on the bill. So your clients must understand that the time and effort is significant and required for the complex legal work that you do, and they’ll be able to see that if those.

Billing entries are written in a clear fashion, so [00:04:00] detailed billing becomes a tool to really improve the transparency between you and your client, and it helps with those communication efforts to them. Communication is everything when it comes to working with your clients. We like to say at the firm that I work at that Clients no longer will pay for legal services, but they will pay for relationships all day long.

And that’s why one of our core values, and one of your core values, should be the importance of building relationships with your client. And it starts with the billing. So you really want to know how to break down tasks in your time entries to really help your client understand what they’re getting billed for.

Now, this is going to build a level of trust. And really, it’s going to build a level of satisfaction in the work that’s getting done because your clients simply will have transparency.

So you can see why billing for your time is one third of the entire success cycle and why it deserves its own [00:05:00] category. It deserves its own category because that’s how important it is and that’s why you need to be able to focus on writing billing entries that really communicate to your client what’s being done.

You want them to feel like their money is well spent and that they’re getting value for the dollars that they’re paying out for your legal services. Now you might also be able to see how Complex writing billing entries can be and you must incorporate specific strategies to make them all Effective as a tool of legal services that you’re completing for your clients This needs to be as far as billing goes an effective tool in your toolbox Simply in terms of the communication.

So there are strategies that you need to know that use detailed billing to help improve your communication. We want to go through those. So first of all, you want to break down your tasks clearly as an example, the billing entry might say worked on case. [00:06:00] That’s it.

Just worked on case, five hours. So, instead of saying that, you can instead put something a little bit more specific, which might be, reviewed case documents, two hours. And then another billing entry that might say prepared legal brief three hours instead of saying worked on case five hours. So you can see that that’s a little bit more specific.

That’s something that’s a little bit more understandable. Again, you want your client to understand the billing entries simply by looking at them. You want to be able to also help your clients follow the progression of their case because you want the story. to always be clear. And when you look at a billing statement with those billing entries, those entries, they tell a story of what happened when you read them all together.

You can see how the case is progressing, for instance, especially when you read them in the order that the legal services were performed. It tells a story from start to finish. And you really want your clients to be able to follow the [00:07:00] story that you’re billing tells. So you want to use descriptive labels.

You want to use words that are very, that really describe the work accurately that’s being done. You also, by the way, you want to avoid vague descriptions, like, for instance, client call, 30 minutes. That tells us that there was a telephone call that took place, but it really doesn’t describe The nature of the telephone call.

It doesn’t say what happened. So you’re going to want to be a little more specific again, which the billing entry might then read phone call with client to discuss discovery strategy, 30 minutes. That’s really specific. That starts to get very, very clear. And if the client was the person on the telephone, then By reading that billing entry when they get their bill at the end of the month, or if it’s every other week, they’re going to look at that and say, Oh yeah, I remember that call because that’s very, very specific as opposed to just client call 30 minutes.

They might not even remember what was discussed. So you want to make your time entries. Immediately after completing each [00:08:00] task, and you want to do that in order to keep your clients up to date on what’s being done. So you want to advance that story of their case, so to speak, when you take an item from the to do list and you perform that legal service, the minute that that legal services completed, you want to then bill for your time immediately and you want to put in clear, billing entry.

You definitely don’t want to wait till the end of the day to create the time entries because it’s just going to cause confusion. You’re going to really kind of forget some of the details. You probably also want to go home. You might be kind of tired. And so you just want to get through your billing entries as quickly as possible.

If you do it immediately after performing the legal services, then you’re more likely to write a clear, concise billing entry, and you definitely don’t want to block billings where you. Say at the end of the day in that scenario where you take everything that you’ve done and just lump them all together Like worked on a case [00:09:00] five hours.

That’s called block billing. You definitely do not want to do that You want to break it down into its component parts. That’s why when you finish one activity one task. You want to account for that one task and you want to write your billing entry based on that one task so that you’re not lumping a whole bunch of them together.

Now you also want to discuss the billing during the periodic updates that you have with your client and you want to do this so that there really are no surprises later. In other words, you want to go through the billing here. Here’s what we did. Do you have any questions about this? This really gives your client A better context into what the tasks are that were done and you know why they were important and also what they probably have to look forward to.

You might talk to them about the future activities and tasks that you’re going to be completing that will kind of tee up. What they’re going to see on their bill the next time it comes around. There are many benefits of detailed billing for client relationships One of them is that [00:10:00] it’s going to really enhance the client satisfaction.

They’re just going to be happier So clients are going to be happy with the work and with the relationship that they’re building with you So that’s when you have that you really kind of have everything we like to say You know Build relationships and all else will follow. And that’s a pretty good example of that concept.

So clients really feel more in control and informed when they can see exactly where their money is going. They know the story of their case because they can read it in chronological order and really sort of decipher what that story is and they can see progress. The worst thing that can happen is that clients get a bill, they pay their bill, but they don’t understand the billing entries are not really talking to their attorney for quite a long period of time.

And even though work’s getting done, they really don’t see it. They don’t know that anything’s getting done. And so in their mind, because A lot of us like to catastrophize things. They think they’re getting billed for work that’s not being done, or they’re nervous that they’re getting billed for work that’s [00:11:00] not being done.

And no one wants to feel like that. If you feel that way, you’re simply not going to use the service. And if. Your clients are feeling like, no, that there isn’t really any work getting done, but they’re being billed anyway, then you’re going to probably lose those clients pretty quickly. It also increases the trust and the likelihood of maintaining a long term working relationship with your client.

So, They’re not going to back away. They’re not going to just stop paying their bills and disappear and not take your calls. You want to have that layer of trust. You want to have that periodic communication with them. Doing it through billing is not necessarily enough, but if you’re talking to them on the phone and you’re talking about billing, now you’re going to have a much more connected relationship.

Now there are also benefits to the firm of providing detailed billing entries. Detailed billing entries serve as documentation, which just makes it easier to justify the fees that a client is charged in case there are down the road disagreements and there’s a fee arbitration [00:12:00] hearing.

Sometimes fee arbitration hearings will happen because the clients just don’t know what’s happening and they can’t figure out why they’re spending all of this money. They’ll go to the bar and they’ll file a fee arbitration and that’s just not going to be really fun for you or for anybody or for the firm.

And it also takes away your ability, for about a day to complete your legal work and to bill for those services. Detailed billing entries really build a paper trail that shows what work was completed at each step.

So we want to look at how to implement detailed billing practices. You really want to develop a consistent billing structure, and you want to use a standardized format across all of your client files just for consistency.

Now, as an example, you might divide your billing. By tasks such as I’m just using this as a, as an example, you might say, for instance, research and then another one might be client communications or document drafting or court appearances. You want to [00:13:00] incorporate the billing into your client conversations.

As I’ve said, when you talk to them on the phone, you want to make sure you’re going through the different billings and also so they know what to expect in the future. Now, this helps really to clarify the scope of the work that’s being done and also the timing of future tasks. Because in those conversations, if you’re setting your client up properly, you’re going to say, well, this is what I expect to do next.

And this is what I expect to do next. Now we’re going to file this particular motion. So they can kind of anticipate what their bill is going to look like in those billing entries later on. It really helps your client to anticipate and sort of pace themselves when it comes to paying for legal services.

Paying for legal services is really not easy for anybody. And sometimes when you open those bills, especially in the beginning when you’re getting everything set up, it can be kind of a shocking number that you’re looking at. So you want to be able to Get that teed up, make sure that your client knows they’re probably going to see a bigger bill in the beginning so that, when they open [00:14:00] up that first bill, they’re not running away from it and never returning.

That tends to, depends on what you’re working on, but that the bill is not so shocking as you move forward. It’s just kind of getting everything filed and getting everything set up in the beginning can take some time. So at the end of the day, detailed billing is not just a matter of accuracy. It’s really a key tool for improving your client communication and just the client’s overall satisfaction and happiness with the work that you’re doing.

So you want to use clear, descriptive, and timely billing to lead to fewer misunderstandings and just greater transparency for the client. They’ll know exactly what you’re doing. And when your billing’s clear and it’s transparent and it’s just understood by your client, you haven’t used any jargon, then it really goes a long way to just help any potential fee arbitrations from, taking place, you’re avoiding all of that.

So you want to review your billing practices regularly. You want to sit down and you want to look at how you’re doing your billing and you want to figure out [00:15:00] is there anything that you can do to improve your time entries so they can really better and more positively impact the relationship that you’re building with your clients just in order to keep those relationships strong.

I’m Scott Benton. I’m the host of the Classroom 2 Courtroom podcast. Thank you so much for stopping by and checking out this episode. for having me. Now, if you like this podcast and you’d like to get more information about us, you can always go over to our website, which is classroom to courtroom dot com.

That’s classroom the number two courtroom dot com, where you can send us a message to keep in touch with us. You can even inquire about our seasonal associate programs that we have available for law school students. You can come and work with us if you like. And as always, don’t forget to like, share and subscribe to stay on top of all of our newest episodes.

And until next time, we hope you’ll join us in making the world a better place, one client at a time.

​[00:16:00]