Legal Software for Legal Billing​

Written by Shrisha Sapkota
Written by Shrisha Sapkota


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Efficient billing is essential for law firms to be profitable and successful. After all, if you don’t invoice your clients, you won’t get paid.[1] However, a lot of law firms have difficulty streamlining the process of billing. This is understandable since record billing and chasing down payments from clients are tedious tasks that sometimes fill even the most experienced lawyers with trepidation.

Keeping an eye on your billable hours and keeping a record of it, manually maintaining every court date, drafting invoices, being paranoid about different hearing dates, and reducing the chances of overlapping.[2] Lawyers should not have to spend all of their time minding these tasks when they could be working on solving important cases instead.

Lawyers usually miss out on legitimate billing time when they record it manually because accurately keeping track of every single time they call, text or study something for a case is simply not possible. It’s unlikely that they will recall the exact minutes they have spent on phone conversations, email responses, and reviewing a paralegal’s work.[3] Remember, whatever work you do for a client is billable – even tasks that you might consider small and insignificant by themselves like a short emil follow up or a two minute call. All of this sums up to a big billable amount at the end.

When lawyers are out of the office and on the go, they make phone calls and respond to emails or text messages constantly. With such busy schedules, lawyers forget the exact minutes spent on each client case and there is a higher possibility of losing billable hours when this time isn’t recorded. [4] Without precise and meticulous timekeeping, the billable time shrinks down considerably and impacts your business’ financial gains.

This is where software for legal billing comes in. Legal billing software is crafted by keeping in mind all these things and even those little details a lawyer tends to forget.[5]

Law firm billing software is the tool law companies and lawyers utilise to track the work they have done, and the time and expenses they have spent working on cases; and to ultimately charge their clients accordingly for all of that. A simple legal billing software makes handling each step of legal billing operation much easier, convenient and efficient. The software takes care of everything including creating and reviewing bills, tracking time and expenses, invoicing, operating trust accounts, payments and collections.

Why You Should Opt For A Legal Billing Software Instead Of Doing The Billing Manually

There is a common misconception in the legal industry that time management has to be done conventionally by manually noting down the working hours and creating time log books. But what gets overlooked here is the fact that time spent on client work is billable, but time dedicated to bookkeeping is not.[6] And if you don’t record the working hours while you are clocking out of work that day, you will probably forget about it altogether.

When doing this manually, lawyers have to go through a lot of paperwork and check back in through all the entries manually, later willing billing and creating invoices for clients. Calculating everything for every client can be quite confusing. Figuring out the total hours spent working for a single client and calculating their total expenses and charges can take up extra time from the lawyer’s already busy schedule. Additionally, figuring out how to charge every client  – by category of the work and whether it’s on a weekly or monthly basis is some extra nuisance that lawyers don’t need to think about. Here, an automated timekeeping and billing software for law would complete all of this very easily in a few minutes.

Automated legal timekeeping and billing software doesn’t just help law practitioners to figure out billable time, it also makes the overall invoice generation and billing operation effortless and straightforward. Softwares for law billing are generally easy to navigate and has a user-friendly interface that can be operated on any computing device including mobile phones, laptops, desktops and tablets. The software application stores the client records and documents on the cloud and with just a mouse click it brings up the data automatically for further entries.[7] These softwares automatically track the time spent on each task, remind clients about payments due soon or pending, create reports and generate invoices.

With the legal billing software, attorneys can classify their client services and generate invoices as per the assigned rates. The software system will let you note and manage expenses and split the charge for each task too. Other additional features include customised dashboard, CRM, calendar, document management and task management.[8] The best law firm billing software are created with the most effective billing and timekeeping tools that enhance the productivity of law firms and grow the profit.

Automated billing offers clear advantages over traditional manual billing constructed either by hand or on a word processor or spreadsheet. Auto-generated invoices, built from systematic time logs and upon preset templates, offer consistency and clarity.[9] Moreover, making the billing process automatic means lawyers and law firms means less error occurs during it since a software is more accurate than typists who probably will make an (human) error at some point like transposition errors. Also, if a law firm can construct a bill faster, it also leaves more time for a managing partner to finalise that bill, using it to convey a more compelling case for prompt payment.[10]

Other major advantages of legal billing software include:

Comprehensive Reporting

Legal billing softwares gives extensive built-in financial and management reports that provide the information needed to run law firms effectively. The reports include data on profit and loss, balance sheets, VAT returns, aged debtors, unpaid bills, cost transfers and client funds movements among other things. Accurate reports allow for data-driven business decisions that can ensure the firm is progressing in the right direction and making improvements to better profitability as it runs. In addition to business reporting, legal billing softwares also provides several auditing functions to ensure financial transparency and accountability.[11]

Visibility Of Finances

To manage their finances deftly, law firms and lawyers need to be fully aware of how it is accumulating and being spent. Their finances need to be completely visible and this can be achieved through a billing and accounting software for law firms. It can support as many banks as the lawyer, client or the law firm needs and provides full review of ledger posting of clients. All the receipts, outgoings and invoices of the law firm can also be managed by a legal billing software via standard ledgers.

The best legal billing softwares is also integrated to the legal practice management solution so that users get full access to everything required for their work in a single program. This will help law practitioners proceed with their payments faster and also get paid quicker since their ledgers can be accessible anywhere anytime.

Document Management

According to a report, many legal professionals still spend a major part of their time in paperwork, drafting their bills of cost, generating invoices, among other things.[12] Lawyers are losing valuable time here that they could have spent actually solving the cases. And time ultimately equals money. So, lawyers and law firms are losing money doing these tedious tasks manually. However, with the office document management solution that comes in legal billing softwares, data can be accessed and placed in a single place and sorted out according to names of cases or certain keywords. Filing of paperwork and retrieving was one of the time taking tasks and often got misplaced and information was lost, legal billing software helps by keeping electronic records that are easily accessible.[13]

Standard Features Every Software For Legal Billing Should Have

Legal billing software should have many options on billing – like charging by the hour, flat fees, etc. – so that the lawyer can choose what works best for any particular case they are working on.

  • Legal billing software should produce finance reports where users can view outstanding balances, transactions, receivables, etc. in organised reports that are easy to navigate and understand.
  • Legal billing software should be able to track the time attorneys spend on each cases either by entering time taken for any task after completion or by using something like a built-in stopwatch.
  • Legal billing softwares should be able to record all expenses occurred while a lawyer is working on a case. This could include anything from filing fee to printing cost – every expense that is relevant for the case.
  • Legal billing softwares let faw firms and lawyers charge different rates for different clients according to their work and the lawyer’s personal fee demand.
  • Legal billing softwares should be able to create invoices automatically according to the charges and unbilled hours entered.
  • Legal billing softwares should remind clients, law firms and lawyers of any pending or upcoming payments.
  • Legal billing softwares should be able to amalgamate with the legal software accounting law firms use.

Legal e-billing And It’s Merits

Legal e-Billing is the process of automating the review and approval (or rejection) of invoices received by the corporate legal department.[14] Legal e-Billing is software designed to replace paper and email billing between legal ops teams and law firms.[15] It also requires the law firm to submit invoices in LEDES format, to capture detailed information about the work being billed. E-billing software allows legal departments to identify cost-saving measures both in the immediate term and by making use of data-driven strategies for the future.[16]

e-Billing produces an electric file, specific to legal matters. It contains not only the invoice header, matter information and bill totals, but a detailed breakdown of timelines, timekeepers and expenses coded against tasks, activities and expenses. A legal-specific e-Billing solution is essential to capture this level of detail; standard accounts payable (AP) systems cannot capture this.[17]

When legal teams have to manually conduct tasks like reviewing invoices and generating reports, it bogs them down. To save teams time and energy, a legal e-Billing solution automates and simplifies the entire billing process.[18] With the increased pressure on legal departments to improve efficiency and control costs, e-Billing is a solution that quickly generates savings that pay for the investment. This is why it is a popular software purchase for legal operations managers. The benefits of e-Billing are directly related to reducing costs so it’s easy to prove return on investment (ROI) quickly.[19]

Legal teams receive thousands of invoices every year and physically assessing everything takes a lot of time and the calculation will probably end up having some errors. Different billing guidelines – what firms can and cannot invoice for – exist for different firms.[20] It inevitably results in overpayment when law firms have to manually calculate invoices while remembering and correctly applying all these guidelines. So, legal e-billing solutions will aid law firms save a portion of legal spend by automating the process of billing.

Other similar cost-reducing advantages of legal e-billing are:

  • Law firms can submit their work in progress for real-time cost tracking and transparency, which reduces invoice surprises and rejected invoices, and speeds up payment so the legal department can benefit from faster pay discounts.
  • Automating invoice processing and review reduces human error and frees up the legal team to focus on more high-value work.
  • Time is also saved because legal matter and spend reporting is automated rather than needing to be compiled from multiple on- and offline sources.
  • Spend data enables legal analytics for data-driven, strategic decision making including negotiations, panel reviews and sourcing.
  • Effective, fair, consistent legal service provider and law firm sourcing
  • Improved collaboration with external counsel leads to more strategic relationships, better matter outcomes, and more value for money.[21]























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