Best Billing Practices for Paralegals – Q1 2023 Career 101
Paralegal billing is one of the key revenue generators for your firm’s payroll, operating expenses, benefits, and bonuses. This review of best practices aims to help you better capture efficient billing time for your firm. Paralegals, like attorneys, must abide by ethical billing practices, such as 1) charging reasonable fees (cannot be unconscionable), 2) completing work efficiently; and, 3)charging only for time spent on a client’s matter.
First, become familiar with your firm’s types of billing practices. Communicate early and frequently with the attorney and client(s) regarding their billing setup and preferences.
Second, here are a few good rules to follow:
▶ Your billing should show value to your client, or rather how you are moving the case forward.
▶ Communicate effectively and often with clients but do not bill for it excessively. Best practice is to keep your verbal conversation to a minimum and utilize written communication as much as possible. This way clients have something they can physically refer back to and follow up on as needed.
▶ Manage client expectations by relaying realistic time and cost estimates for case and billing updates.
▶ Review your billing goals weekly. Pick one small improvement you can make for the next week that will get you closer to your goal; you may be surprised how quickly you reach it.
▶ Always bill with the client in mind. A good practice is to pretend you are the client and you receive the invoice – would you pay it?
Third, here are some common pitfalls to avoid:
Discrete Billing Entries: Firms will often set a time limit for any task, i.e., the least amount they will charge is 0.1 or 0.2 for any given task. However, you should not be billing for every task if it in fact did not take that long. Rather, you can combine time entries within a category for time actually spent. A good example is emails.
Do Not Charge:
“Review email, draft response, review email response, and respond (0.1) x 4.”
In this example, you are charging 24 minutes but maybe it really only took you 6 minutes. The above entry is an example of bill padding.
“Multiple email communications with opposing counsel regarding discovery deadline continuation (0.2).”
Here you are grouping together multiple tasks under one billing entry according to the time it actually took you to do the work (12 minutes).
Vague Billing Descriptions: Avoid general or vague descriptions in your billing descriptions.
Do Not Charge:
“Legal Research (3.2).”
That is too vague. Nor do you want to be overly detailed as billing is a discoverable communication that could end up in the public domain as part of a court case, and you do not want to give away any attorney-work product or privileged communications. Descriptions should include the who, what, and why described sufficiently enough to evaluate the appropriateness of the task.
“Research for attorney Smith regarding proper deadlines for serving deposition subpoenas for business records (0.8).”
Capture Billable Time in Real Time. There are so many tools and tech available today, there is no reason you should not be capturing your time in the moment. If you have to go back and re-create your time from memory or notes at the end of the week or month, this is when problems can arise. Invariably, times get lost or misrepresented.
Intra-Office Conferencing: Cases are discussed internally amongst legal professionals and time should be billed appropriately, not excessively. A good rule guideline is to bill this type of communication at a minimum and, if you can, it is better to contribute it to another task. If a client’s invoice has 30-40% of the bill spent on intra-office conference communications then it is too much. If a client sees a lot of discussion but very little action moving the case forward, then they tend to question the legitimacy of all the internal communications.
Lisa Phillipson is the Operations and HR Manager at Bellator Law Firm. She graduated from University of California, Santa Barbara with a degree in English Literature and has been working in the legal industry for over 12 years; seven of those years she spent as a paralegal in areas such as criminal defense, medical malpractice, and civil litigation. Lisa has a passion for people, community building, and creating organizational systems. She is adept at streamlining procedures for efficiency, business development, building successful teams, and effective communication. As a strong believer in company culture, Lisa always looks to improve on the standard and believes in creating law firms with inviting and goal-oriented office cultures. email: firstname.lastname@example.org