By Andrew Laufers
When I attended Hamline Law School from 1994-1997, the professors talked about learning to think like a lawyer, but no one ever discussed how to bill clients and track time. After working in a large national firm, a small downtown St. Paul firm, a small rural practice in Madison, MN, and now my own solo family law firm located in Lake Elmo and Prior Lake, I’ve learned that how you bill clients and track time is an important part of maintaining a successful practice. I use the traditional hourly billing model, where retainers are placed in a trust account and then placed in a business account as funds are earned. Within this model, I’ve shared some best practices below that I have learned about billing and entering time. I hope they are helpful to practitioners that use the hourly billing model and spurs ideas among all of us on how to optimize the traditional model.
Enter your time as you work
As you finish each task, you need to enter your time. As a habit, I enter time before I move on to the next project or task. In today’s modern world I can even record this in an app, which makes entering time much easier than in the past. In my experience, it reduces client attorney conflict to enter time as you go, because you will be much more accurate in your time tracking. Plus, there is nothing more dreadful than trying to reconstruct time records. If time records are not accurate, clients rightfully complain, and you lose trust with your client.
Bill frequently
Billing frequently ensures that clients are notified of what is going on in their case and ensures regular cash flow for your firm. Clients should be sent a statement even if no work has been done on their case, because a billing statement answers the question so many clients ask: “What is going on in my case?” Furthermore, sending an infrequent bill where the client owes a large amount of money increases stress for all parties. The client may not be able to pay the bill and, just as importantly, you are not being paid for your work and may have to withdraw from representation.
Use billing software
There are many billing and practice management software programs on the market. Use one in your practice. These programs provide data and analytics, and billing platforms attorneys cannot create on their own. When I first started, such programs were limited. In my mind, it is malpractice to not use a billing software program on the market.
Talk about money with clients
As attorneys, talking about money with clients can feel uncomfortable, because it is transactional. In my mind, client representation represents a series of choices for client and attorney. When I go to the car mechanic for a car repair, my mechanic talks about the costs of various options to fix my problem before doing the repair. Based on those options presented, I can make decisions about what is best for me. Attorneys should talk about the monetary cost of various legal options with their clients. The client should have the information to make a fully informed decision about how to proceed in their representation, with awareness of the potential costs of representation.
Do not quote a definite price
Finally, be careful about providing definite estimates for work. Clients will expect that you abide by that estimate, so you should provide a range of estimates. Costs can range based upon factors beyond everyone’s control, such as the other parties’ behavior or government regulations.
I hope these ideas are helpful. Let’s continue the discussion—feel free to email me at alaufers@lauferslegal.com with your ideas or post to one of the MSBA’s online communities.
Andrew Laufers has over 25 years of experience practicing law in Minnesota and Wisconsin. After obtaining an undergraduate degree in Biology from the University of Minnesota – Morris, he then went on to attend law school at Hamline School of Law (now Mitchell Hamline School of Law). After graduation, he opened his first solo law firm in rural Madison, Minnesota, where he successfully practiced for five years. Heading back to the Twin Cities metro area, he successfully practiced for the next 20 years in mid-size and large national firms. During this time, he was recommended by peers and recognized in 2011 as a Minnesota Rising Star in family law practice area by Super Lawyers, a Thomson Reuters rating service of outstanding lawyers. He has won awards for client service and overall high achievement. He has also enjoyed teaching classes on appeals and other legal topics to his peers, as well as doing informational podcasts for the general client market. Andrew has had the opportunity to bring a family law case before the Wisconsin Supreme Court. In July 2022, Andrew opened his own practice - Laufers Legal Services with offices in Lake Elmo and Prior Lake.