Ridiculously Remarkable

BY MICHAEL R. MOORE, ESQ.
CFO and VP of Business Affairs
Ridiculously Remarkable
LEGAL BILLING
HOW BETTER BILLING PRACTICES
IMPROVE YOUR LAW FIRM
AND YOUR LIFE
Copyright © 2012 by Rocket Matter, LLC. All rights
reserved. Certain materials have been reproduced in this
book with the permission of their copyright owner.
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their respective owners.
ISBN: PENDING
First edition, October 2012
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Disclaimer:
We’re happy to inject interesting ideas into legal
business discourse. We believe those who open their
minds to some of the concepts in the book will recap
the benefits of improved efficiency and profitability. This
book contains a mix of facts, analysis, and opinions,
and we hope readers find it thought provoking and
helpful.
That said, though we believe the information meets
those criteria, we assume no responsibility for errors or
omissions and do not warrant or guarantee accuracy,
completeness, or appropriateness for any specific set of
circumstances. Similarly, we take no responsibility for any websites,
links, or other content referred to, linked to, or suggested.
Nothing in this book should be construed as or deemed
a substitute for legal or other professional advice.
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WHAT IS ROCKET MATTER?
Rocket Matter is the leading web-based practice management and time and billing application for small to mid-sized
law firms.
When we launched in February of 2008, we were the first
legal technology available for running a law firm online. We
were surprised at the number of attorneys who immediately
joined our service, looking to manage their matters, clients,
and invoicing from any computer at any time.
Since then, amazing mobile devices, such as the iPhone®,
iPad®, and Droid®, have transformed attorney access to
information. In addition, the global economy has declined,
putting new pressures on the operational efficiencies of law
firms and altering the makeup of large, traditional law firms.
In that time, via the Rocket Matter product, plus our blogging, video, CLE, webinars, and contributions to legal trade
publications, we’ve helped law firms navigate these new
waters.
We’ve introduced new ideas for marketing, operations, and
technology to help legal professionals adapt to the everchanging professional environment. So, please enjoy this book and become part of our cuttingedge community if you’re not already! Follow us and spread
the good word!
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TABLE OF CONTENTS
W H AT I S ROCKET MATTER? . . . . . . . . . . . . 4
F O R E W O RD . . . . . . . . . . . . . . . . . . . . 7
Part 1 : P R O B L E M S C A U S E D BY
BAD BILLING PRACTICES
Chapter 1: The Longer You Wait, the Less You’ll Get Paid . . . . 12
Chapter 2: Clients Won’t Pay a Bill Unless They Receive One . . 14
Chapter 3: Not Billing in a Timely Fashion Sends a Message . . . 16
Chapter 4: You’ll Poison Relationships and
Scare Away Business . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Chapter 5: You Cause Problems for Your Client &
Screw Up Her Budget . . . . . . . . . . . . . . . . . . . . . . . . . 21
Chapter 6: Delaying Billing Is Like Giving Away Free Money . . 23
Chapter 7: Communication Breakdown. . . . . . . . . . . . . . . 25
Chapter 8: You Have No Way to Predict How
Much Money You’ll Make . . . . . . . . . . . . . . . . . . . . . . . 27
Part 2 : H O W T O G E T Y O U R
B I L L S O UT O N - T I M E
Chapter 9: Avoid Timesheet Sudoku – Capture
Time with Easy, Modern Tools. . . . . . . . . . . . . . . . . . . . 31
Chapter 10: Beat the Procrastination Monster . . . . . . . . . . . 34
Chapter 11: Use the Pomodoro Technique. . . . . . . . . . . . . 36
Chapter 12: Get a Bill Buddy. . . . . . . . . . . . . . . . . . . . . 39
Chapter 13: Standardize the Tools . . . . . . . . . . . . . . . . . 41
Chapter 14: Make Small Improvements Each Quarter . . . . . . 45
Chapter 15: Rolling Out Changes and Letting
Your Clients Know . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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Part 3 : S U C C E S S S T O R I E S
Chapter 16: Jeff Lewis bills on the go and gets paid faster. . . . . 53
Chapter 17: Joseph Booth marks his time daily
and invoices his clients promptly with detailed billing statements .55
Chapter 18: The Rules. . . . . . . . . . . . . . . . . . . . . . . . . 57
A B O U T THE AUTHOR . . . . . . . . . . . . . . . 59
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FOREWORD
In the mid-‘90s I was a young lawyer practicing in NY at a
firm with around 60 lawyers. Surrounded by a cadre of ridiculously smart people, I was surprised to see how difficult it was
to get a bill out on-time. There was a constant struggle back
then to make lawyers prioritize “getting your timesheets in.”
Once all the timesheet data was finally assembled, the
bill needed to be edited by the “billing partner” before it
was finally sent out to the client. The process of collecting
timesheet data could take weeks. After that, it could take
several more weeks for the billing partner to finally get
around to editing and sending out the bill.
It wasn’t uncommon to visit the office on a Saturday morning
(as all young associates are inclined to do) and see a partner
at her desk, buried behind stacks of pre-bills, with a harried
admin running back and forth from her desk, making edits.
What a lousy way to spend a weekend.
It was one of the few times I was thankful for being the low
guy on the food chain, at least insofar as I wasn’t responsible
for getting bills out.
As a result of all this, sometimes clients wouldn’t get billed
for months after the relevant work was performed. The client
complaints were predictable. I couldn’t begin to guess what
the aggregate financial impact of all of this must’ve been on
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the firm. Of course, not all partners were like this, but slow
billing was more the rule than the exception.
When I left the private practice of law for the business world
and became the client in the “attorney-client” relationship, I
saw the same struggle from the opposite side, and it brought
with it a whole new set of problems.
As a business client, getting a stale bill from your law firm is
the worst. When it happens, the bill is almost always higher
than anticipated and has all sorts of detail on it that is, for the
most part, a distant memory. Sometimes I took advantage
of that delay, requesting big haircuts (i.e., write-downs). Not
surprisingly, I almost always got whatever discount I asked
for, usually because the firm was – paradoxically – in a rush
to receive payment for the bill that inexplicably took several
months to send.
Finally, I got yet another perspective, that of a provider of
web-based software for small and mid-sized firms. That gave
me an idea of how big and widespread this problem really is
and how it adversely impacts so many other things.
The people at the firms we service, our customers and friends,
are among the hardest-working lawyers in the profession. In
addition to suffering all the normal pressures inherent in the
practice of law, these lawyers are often under tremendous
practical pressure to handle business concerns, things like
paying the rent and meeting payroll, that I took for granted
working as an associate at a big firm. For these lawyers, it’s
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particularly important to minimize the things that can create
additional pressure and stress.
And among all the things that are extremely difficult to
control lies one simple thing that – with today’s technology – should be easy to manage: getting bills out on-time.
Making a personal commitment to get your bills out on-time
is completely under your control. It’s not difficult to do with
today’s technology and can make a direct and immediate
positive impact on both your practice and your life. We see it
virtually every day with our customers.
No matter the practice area, our happiest lawyers all have at
least one thing in common: They are timely billers.
This book is an attempt to put forth the simple proposition
that an improvement in your billing practices will result in
improvements throughout your entire practice. It’s a friendly
suggestion written from the perspective of someone who has
seen the problem from several different angles.
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Note:
As an e-book, the content is necessarily broad and
limited. Specifically, while there is a ton of interesting
and important advice available on evolving issues like
“value-based billing” and on what you should charge
for your services – and we may write on those topics
in the future – this piece is instead limited to the simple,
narrow idea of how important it can be (whatever your
method of charging) just to get your bills out on time.
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PART ONE:
PROBLEMS CAUSED BY
BAD BILLING PRACTICES
When you don’t get your bills out in a timely
fashion, you inadvertently cause yourself
several problems. Some are obvious; some
aren’t. But they’re all equally nasty and
take a huge chunk out of your profitability.
Highlighting a few of these will, hopefully,
give you some inspiration to take action.
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Chapter 1
THE LONGER YOU WAIT, THE
LESS YOU’LL GET PAID
The longer you wait to send out the bill, the more likely
you’re in for a haircut and the bigger that haircut is likely
to be.
When I was in private practice, the biggest, ugliest bill
reductions occurred almost uniformly in cases where a
whole bunch of aggregated time entries, all several months
old, were bundled together. When I shifted my career and
became a client, if I received such a bill, there was virtually
no chance I would have any kind of detailed recollection
of the work involved, let alone whether the time spent was
reasonable or not.
Worse yet, when I received such a bill and was in a position
where I reported to a CFO, I couldn’t even approve it myself.
I had to get “sign off ” on a bill like that to get it paid. Try
getting a prickly CFO to approve a bill that’s several months
old when that CFO has (a) already costed-out the matter to
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which it relates and (b) already reported those results to his
CEO and the Board of Directors. Good luck with that.
Faced with the choice of going to bat for your outside counsel for full payment on a bill like that or recommending
approval with a big discount, you can guess which would
happen. It took awhile, but finally my friends in private practice started believing me when I told them that, contrary to
what they might think, it’s far easier to get bills paid on time
– regardless of how big they are – when they’re sent regularly and on-time. It’s just a corporate fact of life.
Rule #1:
The longer you wait to send out the bill, the more likely
you’re in for a haircut and the bigger that haircut is
likely to be.
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Chapter 2
CLIENTS WON’T PAY A BILL
UNLESS THEY RECEIVE ONE
Let’s start with the obvious: Just like Wayne Gretkzy, who
reminded us that he didn’t score on 100% of the shots he
didn’t take, I usually don’t pay bills I don’t receive.
Most clients don’t think to themselves, Gosh, I haven’t heard
anything from my lawyer in awhile; I should send her a check
just to make sure she’s OK.
Clients simply will not pay a bill they haven’t received. The
first step to getting a client to put your bill into a “must pay”
queue is to get it out to your client in the first place. There are
exceptions (e.g., bankruptcy or fiduciary situations where
advance court approval may be required), but even in those
situations the principle is the same: the clock for payment
doesn’t start ticking until the bill is received.
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Always remember this: Whatever “slow pay” instinct
they have doesn’t even start until they get the bill to
begin with.
Of course, if you’re able to secure an ethically compliant
retainer, you’ve gone a long way toward limiting this particular problem. Nonetheless, a bill is still required to draw
down that retainer.
Rule #2:
Whatever “slow pay” instinct a client has doesn’t even
start until she gets the bill to begin with.
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Chapter 3
NOT BILLING IN A TIMELY
FASHION SENDS A MESSAGE
When dealing with bills with outside counsel, one of my alltime favorite fact patterns is below. It’s the classic - Palsgraf
v. Long Island Railroad - of lawyer billing:
1. Receive snail mail bill from law firm. This bill
features time entries from work occurring three to
four months ago.
2. One day later, receive phone call from billing partner. “Mike, I’m hoping by now you’ve received our
bill in the mail and …” Insert one or both of the
following: “It’s approaching our fiscal year end” or
“My other partners are pressuring me to collect our
outstanding fees.”
When you sit on a bill, you send your client an implicit
message that receiving prompt payment really isn’t all
that important to you.
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Said another way, if you’re sending bills out several months
after you’ve done the work, how important can getting paid
in a timely fashion really be?
I know this much: My other vendors are pretty concerned
about being paid on time, to the extent that some of them
will actually cut off my service if I’m more than 30 days
behind. We’re professionals and don’t just do things like
that, but you get the general idea. When a firm waits for
several months to send out a bill, it’s inadvertently creating a
justification for the client to take that bill and stick it on the
bottom of the “pay” pile.
I remember seeing a sign posted at one of the windows at
the County Clerk’s office back when I was practicing. It said
something like this: “Your Poor Planning Does Not Result
in My Emergency.” Same idea with your bill.
Rule #3:
When you don’t send bills in a timely fashion, you send
your client a message that receiving prompt payment
really isn’t all that important to you.
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Chapter 4
YOU’L L POISON RELATIONSHIPS
AND SCARE AWAY BUSINESS
Here’s the first non-obvious drawback to bad billing practices: They cost you business. Take, for example, the following real-life anecdote:
A few months back, a good friend of mine, who is a successful technology entrepreneur, told me about his experience
with a litigator. Prior to founding his current venture, he was
recruited to help turn around a different, financially troubled
technology company. Part of his turnaround efforts involved
trying to keep valuable employees from jumping ship while
he was doing his best to raise additional financing.
Sadly, the company didn’t make it. Worse yet, one disgruntled
employee decided to sue my friend – personally – for being
“defrauded into” staying with the company. A truly ridiculous claim on the merits but one purposefully constructed
to circumvent the company’s insolvency.
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My friend hired a local defense counsel and fronted a
$10,000 retainer. The case went through fairly standard
pleadings. About a year later, the case was resolved prior to
trial. During that year, a few months into the case, my friend
received one bill where about half of his initial $10,000
retainer was drawn-down. No other bills were sent until a
final “catch up” bill was delivered about two months after the
case was disposed of.
It was sent by email. The bill? About $ 70,000. Seventy.
Thousand. Dollars. Amazing.
So, here’s the rub: Was the amount outrageous? Maybe.
Maybe not. It’s impossible to tell without a lot more information. However, the billing practice itself was abhorrent.
Surprise, delay, poor communication, you name it: It’s difficult to try to imagine a worse way to do it.
The story for the lawyer, haircut aside, has graver implications. Frequently, the biggest sources for billable work are
(a) existing clients and (b) referrals from happy clients. That
said, it’s often easier to get more work from existing clients
than it is to find new clients to give you new work.
Consequently, you want to be doing everything you
possibly can to encourage your existing clients to bring
more work to you. Conversely, you don’t want to do
anything that discourages clients from doing so. Your
billing practices influence this, big-time.
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Many people live in mortal fear of getting blindsided by a
huge, unforeseen legal bill. That fear actually deters prospective clients from seeking out more legal services. Most of us
know at least one person with a “I can’t believe the bill my
lawyer sent me” story.
But here’s the real tragedy from the legal profession’s
perspective: My friend is a guy who values legal services and
is constantly involved in deals (a great source of future legal
work). He pays his bills on-time and runs in circles with lots
of other guys just like him. This lawyer’s horrid billing practice ended up irritating my friend, hurting his own pocket,
and losing untold amounts of future business. And it’s not
just that particular lawyer who loses in that situation.
Here’s what my friend says to me and probably every other
person he talks to when he re-tells this story 500 times (and
he will tell it at least 500 times):
“Mike – what is it with these lawyers? Why can’t they
just send me a normal bill once a month like every single
other vendor I work with?”
Good question.
Rule #4:
Sending late, large, and surprising bills will ruin your
relationship with your clients and hurt your chances of
earning more business from them.
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Chapter 5
YOU CAUSE PROBLEMS
FOR YOUR CLIENT &
SCREW UP HER BUDGET
If your client has a business and that business has any type
of management “best practices” in effect, there is a good
chance that by sitting on a bill you are creating more work
for your client. In reality, you want the opposite. You want
me, the client, to perceive you as someone who solves problems for me, not someone who creates more of them.
For example, if we’re working together on a project, I have
likely budgeted an estimated amount to pay you during that
project. If you don’t bill me timely, it’s going to be difficult
for me to accurately plan or budget for when I’m going to
need to pay your bill.
You ask: ”Why would you (the lawyer) give two hoots about
my (the client’s) internal budgeting practices?” The answer
is this: If a business has budgeted to pay something during
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a specific time period, the bill has a darn good chance of
getting paid as a matter of routine if it’s timely received.
Often, once a budget has been prepared and approved, it’s
already been mentally “spent” by the person responsible for
that budget. When your bill matches (or comes in under)
the amount that was budgeted and is delivered in the time
period it was budgeted for, you are a very long way toward
getting that bill into the dreamy, beautiful “just pay it” pile –
the pile where puppies and unicorns frolic.
Take it from a finance guy: That’s the pile you want your bill
to find.
Rule #5:
When your bills come in on-time and on-budget, your
client is more likely to automatically pay them without
thinking twice.
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Chapter 6
DELAYING BILLING IS LIKE
GIVING AWAY FREE MONEY
Growing up in Western New York State, everyone either
knew or knew how to get to “a guy” who could get you a little
cash quickly if you needed it. Of course, this guy was not a
Chamber of Commerce member, but if you needed it, guys
like that were available.
The deal worked something like this: They’d lend you a fixed
amount of money, say $1,000. Until you paid all of that principal back, you’d pay “points,” typically on a weekly basis.
“Points” usually represented grotesquely large (and most
certainly illegal) amounts of interest. Failure to pay could
result in a broken face.
The basic “point” of the “points”: There is a time value to
money. A dollar today is worth a lot more than a dollar
tomorrow.
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By not sending your bills out on-time, you are essentially
offering interest-free financing. Insofar as you don’t bill me
for your work, you’re letting me use your time and effort
at an implied discounted rate.
To look at it from a different angle, if the client is a business,
by not billing on-time you’re helping finance their business for free. Had you required cash at the time service was
provided, the client would need to either pay the cash or get
the cash. Getting the cash would’ve cost the client interest –
the same interest (by analogy) that you essentially eat by not
sending out a timely bill.
Of course, ethically compliant retainers and evergreen situations aside, not a lot of professionals operate on an instantaneous pay-as-you-go basis. A little delay is normal and
reasonable. But not several months.
The lawyer’s “opportunity cost” of not billing is also significant. Think about what you could’ve done for yourself or
your practice had you collected faster. Had you benefitted
from getting that cash quicker, you might’ve been able to
expand faster, do a little more advertising, and so on.
Rule #6:
By not sending your bills out on time you are essentially
offering interest-free financing and performing your
services at a discount.
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Chapter 7
COMMUNICATION BREAKDOWN
Doing good, quality legal work is really just a baseline – it’s
assumed you’ll do good work. What makes the difference is
listening well, knowing the client’s particular situation and
history, returning calls and emails timely, avoiding surprises,
and yes, sending bills on-time.
Good communication is at the core of any successful attorney-client relationship. In turn, good attorney-client relationships are a primary reason why lawyers get referrals.
Frequently, it’s not the lawyer’s propensity to consistently
“win” that builds trust, loyalty, and goodwill.
I saw this over and over again when I practiced law at my firm.
Clients were clients for generations, and yes, good results
were important, but that alone wasn’t the glue cementing
that loyalty. I also experienced it myself in business when I
retained my own lawyers.
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There are lawyers who I really, really like, lawyers I enjoy
working with even when the subject matter we’re working
on is hardly fun. Yes, they’re smart, and yes, I think they do
good work, but their propensity to keep me informed, to
spend time brainstorming with me (without making me feel
as though every single half-second will cost me), to always
call me back in a reasonable time, and to always send me
timely and fair bills is what makes me consistently use – and
recommend – them.
Subject to applicable attorney-client privilege concerns,
sending out a timely, concise, and well-detailed bill can
memorialize value delivered in addition to serving as a
chronological tally of what’s happening in a particular
matter, at least from the client’s perspective.
Rule #7:
A regular, descriptive bill is a nice backstop to ensure
that you are keeping the client well-informed and that
you are on top of the matters at issue.
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Chapter 8
YOU HAVE NO WAY TO
PREDICT HOW MUCH
MONEY YOU’LL MAKE
Knowing how much money is going to come in the door
(and how much is going out) during any particular time is
a fundamental concern of any business. Your accountant
might call this “understanding your cash flow.” If you don’t
have a good handle on your cash flow, you’re asking for – at
best – a lot of extra stress.
For most companies, the absence of a cash forecast would
be virtually unthinkable. Curiously, for many law firms, it’s
a common missing element. Sure, most lawyers have a good
sense of what needs to be paid, but ask them about how
much they’re forecasting to collect over the next two months,
six months, and 12 months. Frequently, you’ll be met with
a stare comprised of ½ confusion and ½ disbelief, as in
“nobody could know that!”
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For sure, there are elements of a lawyer’s cash forecast that
are very difficult to accurately gauge. The most frequently
cited example: Who knows when that new business will
come in the door?
However, there are plenty of elements of your cash flow
that can be, for the most part, largely predictable. And
all those predictions, in turn, flow from the most important, controllable piece: getting your bill out on-time.
Looking at your current client base and workflow and assigning reasonable estimates to when you think you’ll perform
pending billable work (by mining things like your current
task list, calendar, litigation scheduling orders, corporate
filing deadlines, and so forth), you can get a decent sense,
without much work, for how much you’ll be billing and at
what time.
Getting those bills out on-time will start the clock for
payment, and when those bills go out is something that
ought be highly predictable.
Once you start doing a little cash forecasting, you’ll also
find that it’s very helpful in setting realistic, achievable goals.
Laying out billing forecasts has a way of forcing you into
thinking about strategic things like deciding what you want
your practice to look like one year from now, three years
from now, five years from now, and so forth.
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Rule #8:
Getting your bills out regularly and on-time is the
most important tool you have in predicting your future
income.
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PART TWO:
HOW TO GET YOUR
BILLS OUT ON-TIME
As you can see, there’s no shortage of problems (for both you and your clients) that can
be avoided simply by committing to send
your bills out on-time. If you think you might
be able to do better – and you probably
wouldn’t be reading this book otherwise
– then we’re going to give you a bunch of
potential ways to improve.
We’ve seen dramatic improvements happen
several times before, and we’re entirely
confident that you’ll enjoy the same success
as those who have implemented the same
practices.
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Chapter 9
AVOID TIMESHEET SUDOKU
– CAPTURE TIME WITH
EASY, MODERN TOOLS
In the summer, my Dad likes to sit on a chair in his garage
and do Sudoku puzzles. When I see his forehead cringe,
his pencil in hand, it conjures up the memory of seeing
colleagues at my firm trying to fill out their timesheets.
When I was practicing law, one of the worst feelings was
looking at my watch, realizing it was the end of a very long,
hectic, pressure-filled day, and then looking down at a
timesheet that was virtually blank.
Back then, I’d have a three-foot stack of Redweld® expandable folders nearby – all representing different matters – and
I knew that I’d worked on each one of them (in addition
to taking phone calls on other matters), but I didn’t have a
damn thing written down. As far as that timesheet knew, I
had played golf all day.
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I rationalized: I was so busy today doing “real” work; I just
didn’t have time to track time. So, it was my turn to play
Timesheet Sudoku, trying in vain to accurately re-create
every detail of my day. Inevitably, I’d either forget exactly
how long I did spend on something or I’d forget about stuff
altogether.
I knew that the client would be charged based on my time, so
I was super cautious about recording it, erring on the side of
under-recording. That’s how a legitimate 11-hour day magically (and tragically) shrunk into a 6.5-hour timesheet. That
said, sometimes I’d see partners in their offices on a Saturday
morning trying to complete timesheets for the prior week. I
have trouble remembering what I did an hour ago, let alone
four days ago.
There’s no way around it: You must get in the habit of
capturing time as close as possible to when it’s being
expended.
The greater the distance between doing and recording, the
less accurate the capture. The less accurate the capture, the
less accurate the bill. So, capturing time when it’s being
worked is key to ultimately getting a good bill out on time.
The good news is this: Unlike when I was practicing, there
are plenty of tools today that enable you to capture time
automatically. Applications are available that, for example,
automatically send time to a pre-invoice directly from calendar events, to-do’s, phone messages, or document uploads.
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The best way to ensure that your time is being kept accurately is to stop (or minimize) doing it all yourself. Today’s
practice management applications do this for you.
Rule #9:
Get in the habit of capturing time as close as possible to
when it’s being expended, which is easy to accomplish
with 21st Century tools.
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Chapter 10
BEAT THE PROCRASTINATION
MONSTER
“Hard work can pay off in the future, but laziness pays off
now.” –Homer Simpson
If only …
Unfortunately, procrastination usually comes with brutal
consequences. The problem of procrastination is particularly evident when it comes to billing, because of course
billing isn’t “real work,” and it can always wait. Plus, unlike
clients, an unprepared bill cannot talk. It cannot call five
times an hour (and send three emails during that same
hour) to remind you that “the response is due tomorrow!”
The unprepared invoice is completely silent.
All that unbilled time that’s sitting in your records won’t
call. It won’t email. It’ll just sit there, never complaining.
In a lot of cases, those of us who have a penchant for procrastination are “helped out” by the existence of objective,
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third-party deadlines. We have “X” days to respond to the
complaint, the Form 10QSB must be filed with the SEC
within “X” days of the close of the quarter, and so forth.
These deadlines simply must be met.
However, in most cases with billing there are no such
deadlines. We’re not going to get our bill automatically
voided if it’s sent out on the 31st instead of the 30th. We’re
not going to have to put our malpractice carrier on notice
if in May we realize that we totally forgot to send out the
March invoice. In the absence of this, when there’s a choice
between working on something with a scary deadline and
working on billing, billing waits. And waits. And waits.
So how do we fix that? Several options exist.
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Chapter 11
USE THE POMODORO
TECHNIQUE
One simple way is to find an established workflow method
and adopt it. Our founder Larry Port has written about some
he likes (check out our blog at www.legalproductivity.com).
Larry finds the Pomodoro Technique particularly helpful,
as do a number of our subscribers. That technique involves
getting some type of timer, such as a little windup tomato
timer, an app on your phone, or a timer that’s embedded in
your practice management application (e-mail me, and I’ll
hook you up). Next, set it for 25 minutes, and then work on
only a single task for that time. No interruptions, no coffee
breaks, no checking email, no pit stops. Just complete focus
on a single task.
When the timer runs out, give yourself five minutes to take
a break, and then start up another timer. Simple, yet highly
effective.
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TRY TIME BLOCKING
If picking an overall workflow technique isn’t really your
thing, you can try something even easier: Employ a technique known as “time blocking.” Time blocking is when you
reserve a recurring, scheduled event on your calendar for a
given activity. Many of our subscribers use this as well. They
pick a day (or a portion of a day) each month to be “billing
day.” They use recurring event technology in our software to
block it out for them.
Then, come hell or high water, on that designated day of the
month, the firm gets its bills out. Period. Sure, some kind
of dire emergency could interfere with the plans, but that’ll
be extremely rare. Pick the day, mark it as a recurring event,
and respect it by calendaring around it and – if applicable –
making your staff calendar around it.
USE CHECKLISTS
Another useful tactic, similar to the recurring date commitment, is to develop a standardized process for getting your
bills out. In other words, come up with a formal checklist
and abide by it. In the best case, you commit to a recurring
event date on which you deploy the checklist. The checklist will detail the exact way you handle your billing day, the
precise order in which you do things (e.g., Step 1: Check for
unbilled time, Step 2: Run pre-bills, Step 3: Put together
transmittal letters, and so forth). Checklists are used every
day by pilots, for good reason.
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By listing a specific, ordered procedure, you are more likely
to (a) follow it and (b) make fewer errors while you’re
executing. There is psychological “safety” in checklists, and
they also serve as a memorialization of the idea that this task
isn’t huge, amorphous, and scary; rather, it’s doable, specific,
ordered, and accomplishable.
Rule #10:
Realize that procrastination costs you money. The
Pomodoro Technique, checklists, and time blocking can
help you get the bills out on time.
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Chapter 12
GET A BILL BUDDY
A lot of changes in life are a heck of a lot easier to accomplish
if you’ve got a partner helping you along. If you’re starting
a diet, trying to quit a habit, or starting a workout routine,
getting someone to do it with you is a great way to keep both
of you on track. It’s added discipline and extra support. It
can even result in synergistic gain. Picking someone to be
your “bill buddy” can be a terrific way to help make sure you
are getting those bills out on-time.
If your firm is big enough to have a partner or two, a fellow
partner is a logical choice. This is particularly helpful if you’re
using a modern practice management application to help
with billing. A partner-to-partner buddy system to commit
to better billing practices, coupled with an agreed-upon
implementation of the right practice management tool, can
quickly and dramatically improve a practice and – ultimately
– your entire professional lives.
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A paralegal or admin can also keep you on track, though
that’ll only be effective if you can successfully manage the
boss/subordinate dynamic. The staff member has to feel
comfortable enough holding you accountable such that
they’ll actually do it. Conversely, you’ve got to be OK having
your staff “ride herd” on you.
If you prefer to defer to a professional, they’re also available
to help. For instance, pros like Nora Riva Bergman (www.
reallifepractice.com), Ari Kaplan (www.arikaplanadvisors.
com), and many others are working every day with lawyers
to adopt new technology and improve business practices.
A recommendation if you’re considering hiring a pro to
help: The best ones always give plenty of valuable, free
stuff up front in the form of webinars, e-books, articles,
and the like. Plus, many (like Nora and Ari) are genuinely
fun to work with and extremely well connected.
Rule #11:
Working with someone else will keep you accountable
and help get your invoicing done on-time and regularly.
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Chapter 13
STANDARDIZE THE TOOLS
When (a) one lawyer is using a combination of a notepad,
an Excel® spreadsheet, Post-It® notes, and her cell phone to
track time, (b) another lawyer is using software installed
on his computer (which can only be used wherever his
computer happens to be), and (c) the staff is using some kind
of degraded, free tool they downloaded from the Internet,
it’s a huge recipe for inefficiency and trouble.
When we see what some of our own subscribers were doing
before they subscribed to our legal billing software, it’s easy
to see why billing was a task that always got put on the back
burner. The amount of inefficiency that’s inherent in such a
“system” (if it can be called that) makes the task way harder
than it needs to be. Worse yet, the inefficiencies usually
compound over time.
Everyone in the office needs to be using the same tool,
preferably, a tool that offers ubiquitous access (home, office,
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on the road, etc.). A tool that’s also easy to use removes the
psychic resistance to using it.
Yes, to do it right, there will be a small initial “investment”
required in the form of training – maybe an hour or two per
person, basically the equivalent of a lunch hour or two. And
that “investment” in training will pay off immediately in the
form of better data management, hundreds of billable hours
saved, and even better, more efficient client service.
With respect to billing, unifying tools used in an office can
help ensure that (a) data loss is minimized, (b) data entry is
minimized, (c) everyone has access to the same data, wherever they are, and (d) reporting ability is no longer limited
by access to specific personnel (or, if that limitation exists, it
is by conscious choice).
For instance, when a client calls and wants information
about their current invoice, the answer won’t have to be “I
don’t know. Betty is out sick today.” or “I don’t know. Joe has
all his records with him.” So long as a particular user isn’t
access-restricted by a setting (some solutions, like ours,
enable the client to toggle access settings on and off for security purposes), any user can login and get the information
the client needs.
It goes without saying the tool selected has to be reliable,
easy-to-use, and readily adaptable by everyone who will use
it.
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Don’t underestimate the need for uniform, quality tools.
Joel Spolsky (a legendary figure among software developers
and the driving force behind www.joelonsoftware.com) set
the need for the best tools as one of his criteria of the famous
“Joel Test,” a quick test he developed in 2000 to assess the
quality of a software team. It’s critically important.
By the way, if you decide to try out a practice management
tool to help you with this, I’ll offer some advice on that, as
well. Not advice about the particular tool, though I do think
we think we offer a very good one ourselves, but about the
process of picking one.
Personally, I’m someone who enjoys trying out software. I
like to fiddle around with stuff, kick tires, evaluate features,
test-drive the UI (user interface), and that sort of thing. In
fact, I’m pretty good at that because I’ve been in the software
business for almost 15 years. But if you’re not a pro with software, don’t do it like that; it’s probably a complete waste of
your time.
Think of it this way: My Dad was a machinist for over 40
years. He can look at tool & die equipment and very quickly
and accurately determine whether it’s any good and whether
it’s the right tool.
Me? Forget it. I can hold it, look at it, pretend like I’m “evaluating” it, and maybe read the specs, but without spending
some time with someone who really has experience with
both the product and my needs, I’m in trouble. The exact
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same thing applies to business software, even though folks
don’t always think of it that way.
If you’re not a software professional, admit it and proceed
like you would doing due diligence on anything else. It’s not
a 10-minute project, but it’s not a 10-hour project, either. Do
it right.
When it comes to evaluating applications for your business, don’t just sign up for a trial, diddle around for a few
minutes, tell yourself you’ll “learn it later when you have
the time,” and so forth. Instead, invest a little time in taking
a live demo, asking questions, actively testing the support
team, taking a little free training, and so forth. Your practice
is too important not to.
To that end, we find that the most successful attorneys who
subscribe to our service take the training, interact with our
support team, ask questions, and tend to stay with us a long
time.
They’re serious about improving their practice. We have the
knowledge, experience, and desire to help them do that –
and that’s the start of a perfect marriage.
Rule #12:
Employ easy-to-use and reliable tools to make billing
easier, eliminate errors, and keep the office staff on the
same page.
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Chapter 14
MAKE SMALL IMPROVEMENTS
EACH QUARTER
We’ve surfaced some problems (obvious and not-so-obvious) with respect to bad billing practices, and we’ve offered
up some specific suggestions on how to improve your own
practice. But there’s a lot of material to consider. “Where do
I even start?” a lot of people think.
Here’s a possible way to narrow it down a bit:
When we say “get your bills out on-time,” that can be somewhat subjective. So, for purposes of coming up with a testable action plan, let’s deem “on-time” to mean “at the beginning of every month.”
Generally, bills for work you performed in January should be
in your clients’ hands no later than February 10th. Bills for
work you performed in February should be in your clients’
hands no later than March 10th, and so forth. I’m suggesting
that time period because it generally corresponds with how
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many other vendors bill – and that’s a good thing, especially
if you have business clients.
Of course, your particular practice may require a different tactic (e.g., bankruptcy lawyers might be subject to the
Court’s rules), but if that’s the case, get as close as you can
to monthly.
If you find the volume of suggestions overwhelming, just
pick one or two and commit to implementing them over a
90-day period; that is, one quarter.
Your official implementation date will start on the first day
of the month after the month during which you’re reading
this. Whatever time there is left in the current month, use it
to prepare. Use it to get whatever you need in place to move
forward with your own “get my bills out on-time” initiative.
For example, if you don’t already have one, get your practice management tool and take a little training. If you already
have one, make sure you’re proficient with it – remember,
the quality of your tools has a significant impact on your
ability to succeed.
Try it out, and let us know what worked and what didn’t. We
would genuinely love to hear your experiences. We are big
believers in sharing information and experiences; it makes
us all better and is super easy to do these days.
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Rule #13:
Don’t try to introduce new changes to your office
practices all at once. Instead, incorporate a couple
every quarter, starting with the most important fixes.
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Chapter 15
ROLLING OUT CHANGES AND
LETTING YOUR CLIENTS KNOW
Part of the billing process is good communication. Good
attorney-client communication underlies everything in
the relationship. So while getting your bills out in a timely,
predictable fashion is ultimately going to be a great thing
for you and your clients, it needs to be managed in a professional, friendly way.
Here’s an example of how not to do it: We recently worked
with an attorney on a small corporate project. We’d never
worked with this particular attorney before, but for several
reasons (tactical and economic) we like to spread little
projects out among a few different firms. This new attorney
completed the project in a timely way, the quality of the
work was fine, and we received the first bill. It was a modest
bill, in line with the work performed.
At first impression, I took that as a good sign – here’s a lawyer
who’s got their business house in order. I like that. For me,
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the “non-legal” things a lawyer does have always proven
to be a pretty darn good form of due diligence on the
lawyer herself.
If her staff is friendly and polite, if she returns calls promptly,
if she gives me realistic, practical advice (not yessing me to
death or promising things I know can’t be promised), and
if her bills come to me on-time, she’s probably also a darn
good lawyer. I can’t prove that assertion empirically, but
after over 15 years or so, those facts – plus a “vouch” or two
from a respected friend or colleague – have become a lawyer
screening method that’s never let me down.
However, in this case, a few days (literally) after receiving
the bill, this new lawyer sent an email (yes, an email) indicating that payment hadn’t yet been received and inquiring
as to when payment would be made. Basically, a collection
letter – a few days after we received the invoice, which was
about two weeks after the work was completed. That’s just
too much. That’s overdoing it.
I know I’m a new client, but don’t presume I’m slow-pay (I’m
not), especially when I’ve given no reason to draw that inference. That email turned my initial impression 180 degrees. It
went from “This lawyer runs a nice shop” to “I wonder who
this lawyer owes money to” and “Maybe I’m this lawyer’s
only source of income.” I also wondered why this lawyer
wouldn’t just pick up the phone and call me. Emails like that
almost always come off wrong, especially when there’s no
pre-existing, solid relationship between the people to begin
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with. When in doubt, when a billing issue is involved, bypass
email and use the phone. Call me.
On that line of thinking, if there is a problem (other than just
a routine, polite follow-up call inquiring about payment),
don’t put everything on your admin to handle. Maybe that
client has a very understandable reason why they haven’t
paid or there’s a personal or private issue involved. A pro
handles stuff like that face-to-face, or at least together on
the phone, lawyer-to-client.
So, while getting bills out on-time is very important, it still
needs to be put in context. It can’t be the tail wagging the
dog, so to speak.
That said, if you’re turning over a new leaf and committing
to getting your bills out on-time, here are a few additional
implementation pointers:
For new clients, detail your invoicing practices and
payment expectations right up front, in plain English, in
your engagement letter. Also, discuss them. Clients will
respect you for it, and it’ll dramatically reduce the possibility of a misunderstanding later. New clients will know
the rules coming in.
For existing clients, who may have been used to “not-sogood” billing practices from you in the past, it’ll require some
proactive moves. Discuss your new practices with them.
From a formal standpoint, you may need to amend your
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engagement agreement, and it may require some personal
meetings, as well.
Whatever you do, don’t introduce it in a letter or an email.
Confirming it in a nice, friendly, non-lawyer-like email is fine
(possibly required, depending upon jurisdictional requirements), but it needs to be discussed first. Handle that stuff
like the pro you are. The Golden Rule applies.
Rule #14:
Let your clients know in-person when you are making a
change to your billing practices.
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PART THREE:
SUCCESS STORIES
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Chapter 16
JEFF LEWIS BILLS ON THE
GO AND GETS PAID FASTER
After eight years at a law firm, Jeff Lewis left in 2006 to start
his own practice, Broedlow Lewis LLP. He is a certified
appellate specialist in California and represents individuals
and businesses in complex litigation, both at the trial and
appellate levels. One of the problems Jeff encountered was billing. He used
an Excel spreadsheet. As the day went on, Jeff would fill it
out with his clients’ names, the work he did, and how much
time he billed. He then would have to cut and paste it into
QuickBooks®. It was a nightmare. He struggled with software programs that were tied to a
desktop computer, eventually settling on a cloud-based billing and practice management program. The program he
chose was Rocket Matter®, which allows him to seamlessly
bill time as he goes about his usual activities.
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Every activity he performs, whether calendar events, tasks,
document management, or other, is captured via “bill as you
work” technology. With an iPad® or smartphone, Jeff enters
time anywhere, waiting in court or in between meetings, on
any Internet-enabled device. Then, at the end of the day, he
fills in the blanks using the software’s native billing feature.
He does this daily. By capturing time through tasks, notes, and the use of builtin timers – at any time, from anywhere – Jeff found lost time.
He spends less time doing data entry and gets bills out a lot
faster. To generate a bill, he presses a button and gets all of
his pre-bills.
He presses another button and gets all of his final bills. Jeff
used to reserve a day and a half to enter time and generate
bills. Now it takes only a couple of hours to review the bills
and get them out the door. Clients appreciate getting the bills sooner with information
about the services that Jeff performed still fresh on their
minds. And Jeff really appreciates getting paid sooner. 54
Chapter 17
JOSEPH BOOTH MARKS HIS
TIME DAILY AND INVOICES
HIS CLIENTS PROMPTLY WITH
DETAILED BILLING STATEMENTS
Joseph Booth runs an all Apple® family law practice. He also
uses Dropbox, Fujitsu ScanSnap scanners, and other hightech tools to manage his mainly paperless office. Joe uses
QuickBooks® for his bookkeeping. His practice is fast-paced,
and due to the nature of family practice in general, failing to
capture billing as he goes has been an expensive problem in
the past. With just a paralegal and an attorney working on
billing, it has to be accurate, timely, and efficient. Conventional practices bill their clients monthly. Because
Joe’s practice sometimes bills every two weeks or extends
that out to six to eight weeks for some clients, system flexibility is paramount. Some of his billing is handled with
credit cards and the rest by trust account.
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Joe needed a system that could combine the ability to be
flexible with times and schedule, method of payment, and
ways to capture that billing information. Additionally, Joe
frequently adds extensive text descriptions to his billing
items and needs those surfaced in the bills. Enter Rocket Matter. Whether running on Macs®, iPhones®,
or iPads®, Rocket Matter makes capturing time and expenses
on the go a breeze. Joe’s practice can be run from his office,
home, or mobile device. Joe and his paralegal are able to
record everything in real time and surface it in detailed
reports that can be pulled up in seconds. Joe’s detailed
descriptions can be instantly included in all his billing items,
and there is no more dictation or writing everything down
for later entry. Joe now has the flexibility to bill his clients on whatever
schedule he wants, on a per-matter basis. Monthly billing,
which used to require shutting down the whole office, now
takes him approximately 30 minutes.
What’s more, if he ever needs detailed records in court or
away from the office, he can access them in seconds on his
mobile device. In addition, the detailed reporting enables
him to answer any of his clients’ questions on the spot. All
of this is good for his customer service and his bottom line,
as Joe now carries very low accounts receivable, and his
detailed billing means his clients are never surprised or in
the dark about their charges. 56
Chapter 19
THE RULES
RULE #1: The longer you wait to send out the bill, the more
likely you’re in for a haircut and the bigger that haircut is
likely to be.
RULE #2: Whatever “slow pay” instinct a client has doesn’t
even start until she gets the bill to begin with.
RULE #3: When you don’t send bills in a timely fashion, you
send your client a message that receiving prompt payment
really isn’t all that important to you.
RULE #4: Sending late, large, and surprising bills will ruin
your relationship with your clients and hurt your chances of
earning more business from them.
RULE #5: When your bills come in on-time and on-budget,
your client is more likely to automatically pay them without
thinking twice.
RULE #6: By not sending your bills out on-time, you are
essentially offering interest-free financing and performing
your services at a discount.
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RULE #7: A regular, descriptive bill is a nice backstop to
ensure that you are keeping the client well-informed and
that you are on top of the matters at issue.
RULE #8: Getting your bills out regularly and on-time is
the most important tool you have in predicting your future
income.
RULE #9: Get in the habit of capturing time as close as possible to when it’s being expended, which is easy to accomplish
with 21st Century tools.
RULE #10: Realize that procrastination costs you money. The
Pomodoro Technique, checklists, and time blocking can be
employed the get the bills out on time.
RULE #11: Working with someone else will keep you
accountable and help get your invoicing done on-time and
regularly.
RULE #12: Employ easy-to-use and reliable tools to make
billing easier, eliminate errors, and keep the office staff on
the same page.
RULE #13: Don’t try to introduce new changes to your office
practices all at once. Instead, incorporate a couple every
quarter, starting with the most important fixes.
RULE #14: Let your clients know in-person when you are
making a change to your billing practices.
58
ABOUT THE AUTHOR
Michael R. Moore – Mike is CFO and VP of Business Affairs
for legal practice management software provider Rocket
Matter (www.rocketmatter.com) and a periodic contributor to Legal Productivity (www.legalproductivity.com). A
software veteran and advisor to several Internet and media
companies, he is passionate about data analysis, team building, and helping lawyers adopt and benefit from technology.
Mike received his JD (cum laude) and his MBA (with highest distinction) from SUNY-Buffalo, where he was a member
of the Buffalo Law Review, Beta Gamma Sigma, and Delta
Sigma Pi and taught classes in accounting, finance, and business law.
This book was assembled, contributed to, and edited by
members of the best team in the software business: Larry
Port (Founder, CEO, and Chief Software Architect of
Rocket Matter), Mike Miceli (Director of Marketing, Rocket
Matter), and Tim Baran (Senior Community Director,
Rocket Matter).
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We strongly encourage you to share your comments and
feedback. You can reach us as follows:
Larry Port: [email protected]
Mike Moore: [email protected]
Mike Miceli: [email protected]
Tim Baran: [email protected]
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