Some law firms take only a narrow range of cases, but most practices prefer the financial stability of diversification. Different cases are suited to different fee structures and it is important for law firms to choose attorney time and billing software able to handle all of the practice’s billing needs. Here are the billing models used by most law firms.
Hourly Rates: Attorneys tend to like this arrangement because they know they are going to get an adequate fee regardless of the amount of work involved. It saves them from having to try to predict a fair price for what could be an unpredictable case. Although some time tracking software may allow lawyers to log their hours, billing software for lawyers includes the option for multiple rates. A firm might bill different rates based on who is doing the work–jobs done by a paralegal are going to cost the client far less than tasks performed by a senior attorney. Individual attorneys might charge different rates based on the matter or type of activity, and the billing software should be able to handle that easily.
Hourly Rates With Retainers: Some firms expect to be paid in advance for the work through a retainer. While the initial retainer is generally easy to collect, the firm needs to stay on top of the balance to be sure the funds don’t run out. Legal billing and accounting software tracks retainer funds and automatically notifies the firm when it is time to ask for an additional retainer from the client.
Fixed Fee: Simple cases may be billed on a flat price rather than at an hourly rate. Clients tend to prefer fixed fees because they know how much the case is going to cost from the beginning. The arrangement may include an agreement for the client to pay expenses or hourly rates in addition to the fixed fee for any unusual work or excessive consultations.
Contingency: Personal injury and debt collection practices often work on a percentage basis. If the case is decided in favor of the client then the firm using the time billing software reviews the matter expenses and deducts them from the settlement, and then takes a fixed percentage of the remainder as their fee. What is left goes to the client. If the case goes against the client, then the law office typically receives no payment.
Even if your firm uses a simple fee structure today, you still need the right attorney practice management software to give you more options when you expand your practice. Prepare for the future of your law firm by investing in dedicated legal software today.