Solo attorney James Baron shares essential considerations on each stage of billing in law practice in a recording of a recent program with the Hampshire County Bar Association.
This program was part of a series we recently offered live as a collaboration with and exclusive to the Hampshire County Bar Association, a service organization composed of attorneys, and is dedicated to improving the quality of the practice of law in this county by providing support to the community, the bench and the bar on relevant local issues. The organization’s purpose is to maintain the honor of the profession, to promote the administration of justice, to advance the science of jurisprudence, and to foster and encourage cooperation and good fellowship among the members of the bar as a non-profit corporation. The Hampshire County Bar Association offers many services and programs to the local community and its members such as the Domestic Relations Program for Children, Hampshire Conciliation Program, Hampshire Elder Law Program, Lawyer Referral Service, Lawyer for the Day (Probate and Housing Court), as well as the parent education programs Parents & Children in Transition (PACT), Only One Childhood (O1C), and For The Children (FTC).
Q&A from the original program is included, edited to exclude individual participants.
This program is presented by James Baron, a solo practitioner in Special Education and School Law, licensed in Massachusetts and New Hampshire.
So, welcome to the fifth session in our law practice management Speaker Series hosted by LCL | Mass LOMAP and the Hampshire County Bar Association. LCL provides free and confidential services to the Massachusetts legal community, mental health and well being consultations, clinical evaluations and referrals, practice management consultation, and resources, through our Massachusetts Law Office Management Assistance Program, known as LOMAP. Today’s topic is doing best practices with James Baron who I’ll introduce momentarily. I just want to remind you that next week will be our final session in the series. The topic there will be Benefits of Law Practice Management Software, which will be presented by Laura Keeler, Mass LOMAP practice advisor. She has hosted our previous session and regrets missing today’s but is hosting a solo and small firm meetup for the ABA TECHSHOW, which is getting even more great info and insight to share with you all. We’ve been recording this series so if you haven’t seen it, or can’t find them, those recordings, just let me know in the chat and we’ll send you those links. And then also, please use the chat to submit any questions during the presentation, and then after the presentation is over if you have questions you can also unmute yourself, or use the raise hand feature.
Now I have the privilege of introducing James Baron. James is a solo attorney, he’s a member of the bar in Massachusetts, New Hampshire and Florida as well as the United States District Courts in Massachusetts and New Hampshire. Mr. Baron handles a wide variety of education related legal matters, ranging from special education to discipline to disputes involving college and university students. He has presented on special education issues for MCLE, Massachusetts Advocates for Children, the Federation for Children with Special Needs, and the Asperger’s Association of New England. Mr. Baron has also presented on the topic of Running your Own Special Education Law Practice at the 2014 and 2015 Annual Conference of the Council of Parents Attorneys and Advocates, COPA. He has also presented on Using Technology to Handle Student Records and Gain the Edge from Intake through Hearing at the 2017 to 2018 COPA conferences. Mr. Baron has served as Guardian ad Litem/Education Advocate for the Massachusetts Juvenile Court. He’s also served on the Board of Directors for the Greater Waltham ARC and the Waltham Community Foundation. As a member of the Law Review at Suffolk Law School, Mr. Baron published an article entitled When Good Intentions Go Bad: MCAS Graduation Requirements in Special Education Children. Mr. Baron was selected as Super Lawyers Rising Star in the area of School Law for the years 2011 through 2017. Mr. Baron has been running his own law practice since passing the bar exam in 2007. He is a co-founder, past board member, past vice president and past president of Starting Out Solo, the group whose mission is to provide support, education, mentoring and networking to lawyers who started their own law practices, as the first legal career step out of law school. Mr. Baron earned a Bachelor of Arts degree from Brandeis University and Master’s Degree in Education from Emmanuel College, where he also earned a Massachusetts Teaching Certification, and a law degree from Suffolk University Law School. Over to you, James.
Okay, thanks very much Rachel. And so, I’ll be talking about billing and some best practices with billing, and if you have questions, feel free to stop me as we’re going through it, and I’ll be happy to address questions as we’re going through. If it looks like time is running tight, you may have to hold questions to the end but for now I can take them as we just go along. So, Rachel was the timeframe on this is about 45 minutes to an hour, is that right? Okay. All right, good. Okay, so what will we be talking about?
Within the overall category of billing are a bunch of subcategories that we really need to look at. It all starts with client selection, making sure that you choose the right clients that hopefully you’ll be able to bill and get paid with. We’ll look at initial consultation and whether you should bill for that. We’ll look at the fee agreement, or the letter of engagement, in terms of some billing matters that are in the fee agreement. We’ll talk about types of engagement and how billing will work, depending on how, what kind of engagement you have with the client is an hourly or flat fee, contingency or some sort of hybrid model. Then we’ll talk also about what you can bill for, and what you really should not bill for. How to track your time. We’ll look at details about the invoice, and we’ll talk about how to get paid once the invoice has gone out and it’s time to get paid. And we’ll also be looking at how to handle disputes.
So I’m not going to do a formal poll here, but think a little bit about tracking your time, and whether you really love doing it or hate doing it. Most likely, you are probably in the area of hate it. Very few people, attorneys, like tracking their time. Oftentimes you completely forget to track your time until afterwards and you realize, “Oh boy now. Now what I think I’ve spent the last hour or two working on something and I forgot to write down the exact starting time.” So it’s an important thing to do, but it’s something that is just not — billing is probably the least favorite part of practicing law for me other than just getting paid. But tracking your time and sending out invoices, and trying to collect money, and trying to keep your clients happy is, you know, it’s a burden.
LexisNexis has done a survey of lawyers, and has found that lawyers lose about 40% of their billable hours due to poor time tracking. And you know that to me sounds fairly reasonable that you know when I think about my own time. You know, sometimes I purposely don’t track every second that I’m spending on a client matter. But, you know, sometimes it, you know, I really do realize after the fact that oh I probably should have charged for something or track the time and I didn’t do it.
So let’s talk about client selection. Choose wisely, because when you get a client that makes your life difficult or makes your practice difficult, it can really wear on you, mentally, emotionally. You want to avoid the caffeine replacement client, that client that is going to keep you up at night, the client that you know when you stare at the ceiling at two or three in the morning, you’re thinking to yourself, “Oh, why did I take that client? I knew I shouldn’t have done that.” And I think you’ve been practicing for a while, probably everybody has had that experience where you realize that the client that is just the client is causing you a lot of stress. And no matter what you can bill for that client, if you’re losing sleep at night, it’s not worth whatever you can earn. So choose wisely to avoid that.
One thing you can do to avoid that is be upfront and honest about your fees. I usually tell clients with our very first phone call or consultation, what the fees are, the hourly rate or if it’s a flat fee, what the flat fee will be. I talk about what the retainer is, I talk about what they should expect for the first month’s invoice, and again for me as Rachel was talking about I do education law. So oftentimes the very first thing I need to do is a record review. Parents will come in, I will tell them what records I need, and they’ll spend a significant amount of time, maybe five to 10 hours of time, reviewing records, and that is billable. So I track that and I warn them right up front that I’ll be doing a record review, I’ll be tracking my time you’ll see that on the first month’s invoice, and you multiply by my hourly rate, approximately what you’ll see on the invoice is X amount of dollars. And by being honest and upfront early, there is the chance that that I’ve lost, and in fact I know that I’ve lost clients who realize that they can’t afford it or that it will create too much of a financial burden. And as much as I you know I don’t want that to happen. I would rather have that happen, than to have someone who can’t afford it, commit and get into it with, you know, with my representation, and then receive an invoice and realize that they made a mistake, and they either cannot afford it or they’re going to they’re going to have pretty bad financial burden themselves, because of the legal expenses that they’ve incurred. I would rather tell them right up front, what it’s going to cost, and if I lose the client because of that, then I lose them. But I think that they appreciate the honesty upfront, rather than finding out later how expensive something will be when they didn’t didn’t expect it.
So, the initial consultation, the client calls me up, and of course the initial consultations are online, but whether it’s online or in person, do you charge for it? Do I charge for it? And the answer is, generally, yes, I do. But you need to think about the type of law that you practice, what the competition is doing, what other lawyers are doing in your area. How much benefit the person gets from that consultation, is it a quick 10 minute meeting and they sign on, or have you spent a half hour or an hour talking to the client and they walk away with great information, and you don’t get anything. So, you know, I look at when, when people contact me for representation, sometimes they’ll say I’ve got a quick question. And, you know if they have just a quick question, sometimes I’ll just talk to them quickly but usually when someone says they have a quick question, it’s not a quick question. Or, the question is quick. The answer may not be so quick, but you know there are people out there, really just want to speak quickly with a lawyer. There are people out there who are really looking for a one time consultation. They don’t want to commit or to engage in for them. They just need to ask several questions where they want to go over a situation with a lawyer. Sometimes I’ll get calls from people that they were at a school meeting, and they’re angry, they’re upset about something that has happened. And gosh darn it, they’re going to talk to a lawyer. So, sometimes they want to want to do that. Then there are people who really do want to hire a lawyer. And of course there are the tire kickers, that are just talking to lots of lawyers, trying to see who they’re most comfortable with, what the costs are and so on.
And so what I’ve done is I’ve set up multiple options for clients, and in fact back I’ll jump in to my website right now to show you how I have this set up for initial consultations. Alright, so you should see my website right now on the screen. If you do not, please let me know so I can fix it. You’re seeing my website and you can, you can see, okay, good, thank you. And on my website right in the middle at the top, I’ve put a button for them to schedule a call or meeting with me. So whether they’ve come to me because they’ve Googled me or have been referred to my website. I click on Schedule a call or meeting, and in fact when they call my number, there’s my voice message saying if you want to set up a consultation, to go to my website, select this button. So the way I’ve set it up. By the way, let me take a step back, this is through Calendly, calendly.com. (Related: Scheduling Automation Tools for Lawyers: Calendly Keeps Up with the Rise of x.ai.) So, with Calendly, it syncs up with my, I keep my calendar synced up with Google Calendar, it sync things up with I think just about every major calendar package out there. And so it knows when I’m busy and when I’m available. One option that I have is for a brief 30 minute consultation. So if somebody wants to consult with me, they can click on this button. The next screen will know the days and times that I’m available for these days right now. And you can see that I do charge for that 30 minute consultation, I charge $30 for a 30 minute consult. And what the person would do is they would choose the date that they want to select something, they click on it, the times pop up, they can select the time that they want the meeting, confirm that. And now we’re at the screen where they would enter details. And again, I’m hoping that you’re seeing this and I’m assuming you are, if you’re not, please let me know. So they will enter their name, email address, choose how they want to meet with me, do they want to use GoToMeeting which is what I use, it’s very much like zoom, or do they want a phone call, they share some information, and I’m not gonna go through every step here but I prompt them for information that I need. Then at the end down at the bottom, notice that there’s a button, click with PayPal, or Pay with PayPal. So they can click that button and bring them into PayPal, and they can charge into their credit card. So, I bill for it right up front. They don’t pay at the time of consult, they pay when they’ve actually scheduled. If they cancel before the meeting, then I would refund the money. Certainly not, non refundable. It is refundable as long as long as they give me notice.
Another reason why I do like to charge is that it does stop the no shows. I personally find it very frustrating when somebody has set up a meeting with me, and there are no shows, and there’s no basically if there’s no skin in the game for them, then there’s a lot more incentive for them to just kind of brush it off if they change their mind. By putting a little bit of money up front, they’ll remember. I found that my level of no shows has gone way down since I’ve charged, even for this initial consultation. So, for $30, my goal here is not to get rich. This is not meant, it’s really not meant for me to make a lot of money on. It’s really meant just for someone to commit, and take it seriously. And know that my time does have some value. Now with this 30 minute consultation, sometimes they become a client, and again, sometimes they just want to talk to the lawyer for a little while to get some feedback and run something by a lawyer and see what a lawyer says about their situation. And if that’s all they’re looking for, that’s great, I have no problem with that, and hopefully they’re satisfied with the outcome. So let me jump back, now I’m in the PowerPoint, clear, so hopefully you’re looking at that. I’m sorry before I do that, let me, let me go back to Calendly and show you other options, so I’m not going to fill this out and actually schedule the event, with that in 30 minutes. Another option that I make available is for the client who feels like they need more than just a brief consultation. For the client that feels like they want me to review some records, they want, they really want to dig in. So sometimes they’ll schedule this initially, and sometimes this will be a follow up. So click on that, in this I am charging more money. This is a bigger commitment for both of us, for both the client and for me. So, for this I’m charging, $275, and the same idea applies, they choose the date and time that they want, they’ll fill in the information, and again they will pay with PayPal.
So Calendly syncs up with PayPal, so then I’ll just get a notice. Out of the blue I’ll get an email saying that somebody has paid amount of dollars for consultation or getting notice of when the consultation is. And this is generally, this is on my website, so I’m assuming that it’s okay for me to be talking about this during this presentation. Evening and weekend consultation, for that one, I mean, that one basically is even a higher amount of money because someone is, they’re asking me to give up my evenings and weekends to try and speak with them. So it doesn’t happen often, but there are people really want to speak to somebody quickly on off hours, which is okay, they’ll have to pay for that. And then I have one more option or referrals from other professions, doctors, lawyers, educational advocates, and when they click on this, you’ll see this one is free. It’s a 15 minute consultation, really more of a professional courtesy to other professionals who are referring clients to me. And this will pretty much work the same way for scheduling, but they won’t, a potential client won’t have to pay anything to speak with me but this will be more limited, this is 15 minutes. And it’s really just meant to get to know each other for me to learn a little bit more about their case and see if it’s something that I can help with, because usually when they’re referred from another professional, that other professional has already done the screening, in terms of whether it’s really, the person really does need to speak to a lawyer.
And you can be flexible. I was flexible, for instance, a few months ago things were a little slow, so I stopped charging. I did not charge for the 30 minute consultation, I just took that option off the table. The 30 minute option was on the table, but I took away, having to pay for it. Once I got busy and I realized I really don’t want to be giving away 30 minutes at a time, then I started charging for it again. So it does happen. I think charging a small amount of money will stop the people from being a no show.
So in your fee agreements, once you’ve spoken with a client and you agree that, you both agree that you want to move forward together, you absolutely should be signing a fee agreement, or have a letter of engagement. This is your contract, so make sure you draft it wisely. Billing is a big part of this. Be very clear in the fee agreements. I’ve tried to re-word, I mean I think we all start off with samples even lawyers or wherever we’re getting our template from for a fee agreement. (Related: Fee Agreement Best Practice Guide for Lawyers in Massachusetts [Templates].) I’ve tried to make it as hard to put it into layman’s terms as much as possible because I really do want the clients understand what they’re committing to and what, what I’m committing to as well. We’ll be coming back to the fee agreement, a few times during this presentation.
Let’s talk about the type of engagement that you have and how you’ll bill for them. So of course there’s hourly, that’s the traditional way of, whoops I’m sorry let me go back up, hourly is traditional. X amount of dollars and that’s what you’re going to bill for, the X amount of dollars per hour times the number of hours, I’m sorry does someone have a question? (Host: Can you switch your screenshare back to your PowerPoint since we’re still looking at the Calendly page. I know it’s hard to keep track of the toggle, thank you.) Okay, are you seeing the screen now that says type of engagement? Alright, great, thank you. So, hourly is the traditional way of doing things, you probably will collect a retainer and you’ll draw down on that. Or if you don’t collect the retainer, you may just bill it, the client each month and they will pay.
Then there’s a flat fee billing, where it’s different from the traditional way of doing that. Estate planning is a good example of the traditional way of doing that. You’re going to charge X amount of dollars for doing something like drafting an estate plan. I actually have started to, not started, I’ve been doing this for several years now, where I do a flat fee for litigation. Which one, it took me a long time to figure out how I could charge a flat fee for litigation. Why would I want to do that? Because when you litigate it can get very expensive for clients. Sometimes they would be caught off guard by an invoice that was much larger than they expected. Sometimes I would discount the invoice, because I just felt so bad about the amount of time that litigation took. So you’ll see what I’ve done is I’ve broken down the litigation to stages. And I charge a flat fee for each stage of litigation, which so the client will prepay it. And then there are ways that that money can be refunded, depending on when the case gets resolved. And we’ll go into that in more detail. So you can actually do flat fees for litigation, although certainly is more complicated to do that. But I’ll tell you that the clients, since I’ve started to do this, the feedback that I’ve received from my clients is overwhelmingly positive. That they appreciated knowing upfront what the cost would be so they could budget for it, and so they knew they would not get caught off guard with getting invoices that were larger than they were planning for.
There’s contingency billing, which really is not billing until the case is pretty much resolved, where you get your standard fee, a third or 40% or whatever that might be.
And then there’s a hybrid. And sometimes, actually I’ve got part of a hybrid built in, when I start off with clients as well, with for example, when I start off, most of my work is not litigation. Most of my work is just advocacy for clients, school district. So I charge hourly, but for that record review I’ve capped the costs. So, as long as the clients send me, only the records that I’m asking for and they don’t overwhelm me with other records. I kept the cost of 10 hours of my time. So if it takes me more than 10 hours of time, and they’ve sent me only what I’ve asked for, then, I don’t bill them for any more than 10 hours. Now if they send me a lot more than what I’ve asked for, then that cap does not apply. And I, I build that right define that by the number of pages, because I know if they send me what only what I’ve asked for, they should not be sending me any more than about 400 pages. So if they send me more than that then, then I’ll charge you know if it takes me more than 10 hours. You can also have, an another example of a hybrid is you could have contingency, but maybe the client will pay certain fees as you go along.
So I talked about the flat fee for litigation, and here’s an example from my fee agreement. So this is just one section of the fee agreement. And this is the fee agreement that we sign only when I’m engaging in litigation. So this is not my standard fee agreement. This is more when things have really, we haven’t been able to get resolution and the client and I have no choice but to file for a due process hearing. So you’ll see it says payment schedule client agrees to pay a flat fee for the above service. So in other words, I will have defined what we’re doing for filing for due process here for the above service, according to the following payment schedule: Amount due, when signing this agreement. So if I’ve already done a record review then there’ll be a dollar value in here. Or if I’ve not done a record review, then I have to take that into account and there’ll be a higher amount listed right below it. Let me see if I can highlight, okay so we’re, I’m at 1.a.ii. The initial fee, if I have not done a record review yet. Then below that. Part B. If we have to go to what’s called a settlement conference, which is kind of like a mediation, but it’s a little bit more complicated than that but there’s something in special education, which is available in Massachusetts called the settlement conference, it’s optional. It won’t always happen. But if we do decide to go to a settlement conference, then a certain amount would be due one week prior to that settlement conference. Same idea with what’s called a pre-hearing conference. If we end up going to a pre-hearing conference which again, may or may not happen, then a certain amount would be due one week prior. If we go to, if we have to do discovery, then a certain amount would be due prior to discovery. And then finally, if we really have to do a due process hearing, if the case has not been resolved, then at least three weeks prior to the due process hearing that final payment would be due. So that way if we get resolution, early on, then they never have to give me the amounts from parts B, C, D, and E. If we get resolution at the settlement conference, they don’t have to pay me parts C, D, and E. And you’ll see that there are asterisks here and basically that means that these are optional. If we don’t do that, then no amount is due.
So, when I first started to implement this way of billing for flat fees for litigation, my refund policy was not as robust as it is now. I attended a presentation from someone from the BBO, this person presented at a Starting Out Solo meeting and he was very clear: The BBO frowns upon nonrefundable flat fees. (Related: Flat Fees: A Three-Dimensional View [Mass BBO].) They don’t like it when lawyers say it’s a flat fee and this cannot be refunded once you pay it. In fact, if, if someone pays me X amount of dollars to start the litigation, and the case magically settles the next day, I cannot in good faith, keep that money, in good conscience, keep that money. That wouldn’t be right. So I had some refund options built in there. But then after listening to the BBO talk about this I built, far more refund options in there. And this next section is also from my fee agreement. And each part that’s refundable and just about every part is refundable, will have a sub section below it, defining how it can be refunded. So you’ll see here, the initial payment, it may be partially refundable as follows. Within three weeks of signing the fee agreement, as long as the request has not yet been filed with the BSEA, that’s the Bureau of Special Education Appeals, the client may request in writing that this agreement be cancelled. And that a partial refund be issued. The refund will be based on the following schedule. If the hearing has not been filed yet, if the hearing request has not yet been filed with BSEA. So I’ve tried to make it as clear as possible. There can be a refund. And what are the options? Well the first thing, if the fee agreement is cancelled within one week of execution, then most of that money will be refunded. If it’s cancelled after one week, but within two weeks, then some lesser amount will be refunded. Why? Because I’ve spent time on it, the more time that goes along, I’ve almost certainly spent time on this case. If more than two weeks passed, but it’s within three weeks, then a lesser amount will be refunded. And then no refund after three weeks of signing the agreement. And that has been very fair, up to this point.
Okay, so now let’s just talk in general, what is billable? You fall asleep at your computer for an hour, because you’re working on a case sorry but that’s not billable. So you want to be careful. In general, most activities, most legal activities that you engage in, on behalf of the client is billable. And that should be listed in your invoice. However, you can’t bill for anything that is clearly excessive. I also, let’s say that I need to do legal research. I try to be reasonable. If it’s something that I feel I should have known, or that you know it’s really not a novel issue that I’m researching, I’m researching something that it’s just you know, I know I’ve run into this before and I just I can’t remember what the case law is, or I can’t remember what the statute or regulation is. I don’t charge for that kind of legal research. It’s not the clients fault that I can’t remember what what the case law or statute or regulation is so they shouldn’t have to pay for that. That’s my personal way of thinking about this. But emails with a client, drafting memos to the client or on behalf of the client, phone calls with the client, meetings, hearings settlement conferences, talking to opposing counsel, that’s all billable. So, certainly that I track that as best I can and the client will see that on the invoice. I do differentiate between. Oops, sorry.
I do differentiate on my invoice between attorney, paralegal, and travel rates. So most of the work that I do, of course, is billed at the attorney rate. If I do something at that I feel doesn’t really require legal training, for example, the client sends me a 400 pages of records. And I keep as electronic of an office as possible and scan everything in. I OCR everything, Optical Character Recognition, so that I can scan for, so I can search for keywords and quickly find a document that might be important. So, scanning in documents, that doesn’t require legal training, you know, there was no class I took in law school for how to scan documents, so for that, I’ll track that in the client will see that on the invoice, scanning time, but I’ll bill that at a much lower rate, at a paralegal rate. And likewise, I don’t charge my full rate for traveling. So if I have to drive somewhere to go to a meeting. They’ll see something billed at what I call the travel. It’s a much lesser rate.
So, the rule of professional conduct in Massachusetts is very clear that you cannot bill for anything that is what they call clearly excessive. And if you, if you go to the Mass Rule of Professional Conduct 1.5a, you’ll see, you’ll see that this is a copy, this is what 1.5a says the factors to be considered in determining whether a fee is clearly accessing the following the amount of time and labor that’s required. (Related: Too Much of a Good Thing: Understanding the Rule 1.5(a) Prohibition on Clearly Excessive Fees [Mass BBO].) How novel and difficult is the question that you’re dealing with. How much skill is required to perform that. That’s why, if I’m feeling something I know I should know the answer, I have to research that that’s not normal. That’s me just not being able to remember. So, that would be clearly excessive in my mind to bill a client for things I really should know. The likelihood, if apparent to the client, that the acceptance of employment, in other words, if I’m going to do some work for a client, does that preclude employment, other employment. I may have to turn down another case in order to work with this client. The fee customarily charged. So, you know, there, just knowing you’re where you are, what other attorneys are charging and I don’t know if attorneys really talk that much about their fees. Some do, the attorneys that I speak with in my circle of special ed attorneys, we don’t elaborate to each other but sometimes we’ll talk about what our hourly rate is, the amount involved and the results obtained. So I don’t have to read this entire thing, but if you go to the Mass Rule of Professional Conduct, you’ll see what is defined as being clearly excessive.
In my fee agreement, there’s a section called time charges, and I lay out everything that I could think of that I might bill for. But I’m also very clear, the time charges include but are not limited to. So, there may be more. This is not necessarily all comprehensive all encompassing. But generally, telephone calls, reading and responding to emails and drafting emails, court appearances, including the Bureau of Special Ed Appeals, which technically is not court but that’s where hearings take place, Team meetings at schools, travel time, legal research, deposition, reviewing materials, all of that. So I tried to think of everything that I do on behalf of clients, and I put it in here. And I also told them, I bill in increments of 1/10 of an hour.
So how do you track your time, how do I track my time? There are multiple ways of doing it. The high tech way, the low tech way, and the no tech way, doesn’t matter how you do it as long as you do it. (Related: Killing Time or Billing Time? [NCBA Center for Practice Management].) I started out with no tech, I just kept a time tracking sheet that I wrote down, starting time and ending time, and generally what I did, who the client was and I’ll show you that in just a moment. Currently I use Zola suite, which is through the Social Law Library. Actually, my subscription to Zola Suite is through the Social Law Library because it’s free if you have a Social Law Library membership. (Related: Zola Suite — Social Law Library Member Benefit) You can also subscribe, just to Zola Suite if you want, but there are other competing products out there. There’s Cosmo Lex and Clio, MyCase, Rocketmatter, and others. So there are a lot to choose from.
And you should track your time even if you do flat fees, you should still track your time. Because if you ever have to, let’s say that you have to backup whether your fee that you charged for a flat fee is reasonable, part of that is probably going to be showing what time you spent on the case. The client may not necessarily see that individually the time breakdown with each invoice or through a monthly invoice as the matter moves along if it’s flat fee. But nonetheless, you should have backup for what you did so you can prove that your time was reasonable.
So, this is a practice management dashboard from MyCase, and again MyCase was one of those practice management tools that I just talked about. I think they’re all fairly similar. The Zola Suite that I use, you know, this looks very familiar to me because Zola suite is broken down fairly similarly to this. You can click on calendar and see your calendar, you can click on tasks and see your tasks, this option right here is the billing tab within MyCase, billing, you can add an invoice. You can add an invoice. You can report a payment that the client made, you can deposit money into trust, request money from the client. So there are lots of different options that concern money, billing or receiving payment. A quick overview of your trust account here, the invoice overview. How much is new that you haven’t built for yet. How much is new that you have unsent. How much is it overdue. Alright so this is kind of your dashboard. When you use a practice management tool, there are timers that you can use. This is a huge help. So you don’t have to write down the starting and ending time, you can just click click a button, so. One moment. So you can click this arrow here, it’s almost like, like a VCR, you just click the button, and it starts to run. You select which matter it is because you will have already defined the client within this software. What the date is, probably what type of work is it, is it billable work or not. And then a description, you would type it in this description that you type in here is what will end up on your invoice. So, you know, as the day goes along and the days, the hours turn into days and the days turned into weeks.
At the end of the month when you go to do your billing, all of these things get combined for each client and they just show up on the invoice. It’s almost like magic; it really is a huge timesaver. So this is an example from Clio. Here’s an example from MyCase. Also you can have multiple timers running at the same time, and you’re jumping back and forth from one client to another to another you just keep clicking the buttons and the time just keeps incrementing for that particular client, and it automatically stops for the other client because you probably, you can probably only deal with one client at a time for billable time. And this is just a close up to see a little bit better what that time tracker looks like.
So, with practice management software, they’re very helpful. I find them very helpful for certain tasks like tracking time and invoicing. Invoicing is pretty much just clicking a few buttons at the end of the month, and the invoice is created, and you send it out. It literally has saved me, I would say, on average, about one day per month of invoicing since I started to use the practice management software. It’s just so much easier than before I used it. What I use Zola has replaced QuickBooks. I don’t have to have QuickBooks anymore for my accounting. I can run reports very easily. If I want to know if I want to see a profit and loss, like, I don’t know how many people have applied for those PPP loans. But part of that, when you apply through the bank is they want to see your profit and loss. Or I need to be able to at least show them what my profit and loss was. So, that reporting is very easy. And that’s kind of those last two bullets there in that first box. Now, there are things that I find questionable. Technically there’s a lot more that these practice management tools can do than what I use it for. Exchanging files with the client, so yes you can, in a secure format, upload files, download files, make files available to clients, have them upload files to me. You know, the feedback I’ve received from clients is they find the interface too confusing. Unless the client is technical to begin with, they have struggled with it. I don’t find it worthwhile. You know I can share files file through Dropbox that I use. It’s very easy to share files through Dropbox or Google or OneDrive. Email. Most of these tools have their own email system built in. I don’t like it. I’m used to Gmail, I don’t want to give that up. I like the way Gmail has their folders built in I’m just I’m used to it. I don’t want to give up, Gmail, so I don’t use these for email. Same idea with calendaring, I use Google Calendar, I don’t want to give that up, so I don’t use the practice management tool for that. And same idea for tasks.
You should be forewarned, sometimes these tools seem like they’re not quite ready for primetime. I’ve had bugs that have been really annoying. With Zola Suite a couple of years ago. It had a bug with their time tracker. And I just, I was pulling my hair out, I was so frustrated because I would spend two hours on something and I would go back to stop the timer, and I would see that the timer never really even started. I thought it did, but it didn’t. Or if it did start, I know that I have been working on something for, let’s say two hours, and it was only giving me credit for, you know like, 10 minutes. So I ended up having to track my time manually anyway until they fixed that bug. And, they were honestly, Zola was a little frustrating to deal with. They first really wouldn’t even admit there was a problem, they were kind of slow in fixing it. Finally it was fixed, but it was frustrated when that was happening. I also find that sometimes they’ll make changes or remove features, without even warning out of the blue, things that I had been using, features which I thought were fantastic all of a sudden disappeared. And when I would call tech support to find out you know where’s that feature. What happened to it? Oh yeah, that got removed. So that’s frustrating.
Be careful when you commit to a practice management tool. They’re proprietary. It’s not like the data at the time that you’ve entered in Zola can be used by MyCase, or by Clio. So you want to think about how accessible your data is. Can you export the data and make it available for importing into another tool, or are you going to have to spend a lot of time re entering data, time for example, that you’ve already entered. If you switch from device switch from Zola to Clio at this point, it’s going to be a difficult, painful switch. Initially started out with Cosmolex, which is also a practice management tool, and then eventually I switched to Zola for multiple reasons that I don’t have to go into right now. But it was very difficult, I had to reenter time but basically about a year. So it took a lot of time so that I didn’t lose everything that I had already entered. There are low tech options, and no tech options.
Low tech is, you could create a Google spreadsheet yourself. So, for example, this is the way I used to do it before I started using Zola Suite. Before I started to use those to me and let me share this with you. So, you should see my Google spreadsheet here, and this is, I, I just wrote this myself, this is nothing, professional, and you can see the the columns that are here, so I would put a date in, so let’s say it’s March 11, and hopefully you’re seeing me entering this if you’re not seeing me entering it, please let me know. Put in the start time, so maybe I started at 4pm. And then you put in the end time, Maybe I’m starting, stopping this at 4:51pm. So you enter what it is. And some of these next columns are calculations or formulas. So, I don’t know how comfortable or familiar people are with formulas, but basically what I’ve done is I subtract the starting time from the ending time, and it tells me how many minutes on the case. Who do I want to bill it to? You put in the client name. And then in tenths of an hour, how much time have I spent? Well I’ve spent .9 hours. And I’m going to bill for .9 hours. And then times an hourly rate. This is pre predefined hourly rate, .9 hours would work out to 225. I think the hourly rate that’s there is 250 is the default. Or if I want to do this in Paralegal time I put in a P. And you can see that that changes to 112.50. Or if it’s travel time, put in a T, and it’s a lower rate. So, this is all appear at the top. It looks a little complicated, it took me a little while to figure out how to do this. I don’t think I need to go into the details of the formula right now. And hopefully, since this is being recorded, you’ll be able to see this in the future if you ever need to access it. So anyway that’s the formulas that are in there and that’s it. I would keep entering information, you know, literally, minute by minute, hour by hour. At the end of the month, I could sort this by client by date, by time, by starting time, and eventually this would become the basis for my invoices, but it was more manual so it takes more time back. So, you should see me back in the PowerPoint presentation at this point. Whoops, would help if I were there.
And then of course there are the no tech options. This is just a piece of paper. You can write down the task, the start time the end time, total time that you’ve spent on it. And eventually this will become the basis for your invoicing. As far as the invoices, be as detailed as possible. Clients want to see what they’re paying you for. Don’t just have a monthly invoice with how much is due, have a summary of legal services rendered. Really should be better than that.
So, you’ll see the what I’ve entered in Zola Suite; this invoice is actually printed out from Zola Suite, and it did not take very much work at all. As I said before, it’s a few clicks when the invoice is created. And you see that it’s broken down sometimes there are multiple entries per day. Because remember, each of those entries that I entered becomes a line item on the invoice, and you can edit this before you finalize the invoice, and you can see what the quantity is, what, what the hourly rate is. Sometimes you may want to discount something so there are a few things that I said well I don’t want to build a client for that work but I want them to at least see that I did it, and I want them to appreciate that I’m not charging them for it. So you put in 100% discount for those particular things. And then either the line item by line item, what’s the total. And at the end, this goes on to a second page it there’s a summary, a subtotal rather, and a total. So for me this is where practice management really shines because as I said this saves me at least a day a month. So for what I’m paying for the Social Law Library, being able to use Zola Suite, I think is well worthwhile. And I know we’re starting to run tight on time here so I’ll try and move it along a little faster.
How to get paid. My hourly agreement requires payment within two weeks. So they can pay, either by personal check or credit card. And here’s what my fee agreement says client agrees to keep a valid credit card number on file with me, agrees that when the invoice is received and don’t pay within two weeks, either by sending in a check or by paying with a credit card, or I can use the credit card that’s on file. So that’s what the section is saying. It’s just the client is committing to paying within two weeks, once I send that invoice.
Should you take credit cards? I do. And I think the answer for most attorneys should be yes. If you’ve ever read Jay Foonberg, on how to start and build a law practice, for me that was my bible, when I first started to practice. He’s very clear in there, that accepting credit cards is a good thing you should do it. It saves you from having to chase down clients, it saves you from having clients say “oh I’ll send in the payment next month”, or “oh can I send in half this month and half next month”, or “can we create a payment plan.” Basically if they’re asking, “can you do a payment plan,” the answer is, “yes you can charge it to your credit card, that’s the payment plan.” I don’t say white that crassly, but that’s what it’s for. The client, they pay the credit card and then they can deal with their credit card for payment. Yes, there is a fee. But, you know, for the two to 3% that the credit card is charging, it’s worth it to get 97% with no questions asked, no fighting, no, no problems. It’s just part of the cost of doing business. Should you pass along that fee that is not a good idea. You should not do that. Basically you should eat that 2 or 3% and be happy that you’re getting 97 or 98% of the amount that’s due. Mass General Law Chapter 140 D, Section 28 A states that no seller in any sales transaction may impose a surcharge on a card holder who elects to use a credit card, in lieu of payment by cash, check or similar means. So you really, you know, is this a sale? Well, you know, I’m not going to get into a UCC discussion. So it may not technically be a sale, but I think that you should consider this. You should think along these lines. Don’t impose a certain charge to the client. Do you want to discount, you know, for somebody who doesn’t use a credit card, who pays by check? Maybe, I mean that may be something you can consider.
The BBO, if you look at this article that’s on the BBO a website and the link is here, they state “most lawyers, as a matter of good client relations will undoubtedly decide to absorb the discount.” Meaning you’re only getting 97% of the client fee, basically be happy that you’re getting that and you don’t have to go chasing the client. So you can use credit cards to charge the amount that’s due each month. You can use credit cards, technically you can use credit cards to fund IOLTA, the retainer. I don’t. I do not accept credit cards for that, and you need to be very careful with that. You can use LawPay to fund for retainers for IOLTA. The problem with with using credit cards for IOLTA is you’re only getting 97%. So immediately, the client is, you know, or you’re going to have a 3% shortfall in your IOLTA and that’s not a good way to start. LawPay will charge that 3% to your operating account rather than to IOLTA, so that’s why they can do that. But what if there’s a chargeback? What if the client disputes that charge? It’s just, you’re getting into something that I think is a little dangerous. I don’t like it. However I do keep the credit card number on file, and you know it’s up to you whether you feel comfortable doing that or not, some clients some attorneys do some attorneys don’t. I’m okay with it, I mean I try and protect it. I make sure that every credit card number I have electronically is encrypted, but by keeping it on file, it allows me to bill a credit card for the client each month.
So the way I use the retainer. There’s a traditional way of using a retainer, the client fills that you bill against it you withdraw from it, and eventually the client has to replenish it and you go through the process again and again and again, it’s a cycle. The clients don’t like it, and I don’t like it, in terms of having to ask them to replenish that retainer. And you have to have a fairly large retainer, because you don’t want to be replenishing it every month. What I do is I treat the retainer, more like a security deposit. Forgot the phrase but I treat it more like a security deposit. So I hopefully don’t bill against that retainer. I keep it there just in case it’s needed. So I take a much smaller retainer than I used to do. It goes into my IOLTA, and hopefully I don’t touch it. I bill a client each month, and the client, hopefully pays me each month. They either send in a check or they pay by credit card. I would only bill against the retainer that they’ve given me, if they, if I tried to bill against their credit card that credit card was rejected, I contacted the client and they just basically don’t make good on it, so something’s going wrong anyway. But at that point, because it’s already been defined that I have the right to do it. I would bill against the credit card. Honestly, I’ve never had to do this, since I have been doing this, which is now several years. At the end of the engagement, assuming I have not needed that retainer for any reason, it will be returned to the client in full or would be applied against their final invoice. And here’s the section of the fee agreement that authorizes me to, or that defines how I’m using that retainer. And I make very clear, the retainer will be used in one of two ways. And it’s just as I defined a moment ago. So everything I just said, is in this section 2 of my fee agreement.
What if there’s a dispute? Be reasonable, you know, work with the client, it’s not worth getting an angry client over a few dollars. So, if there’s something that’s even slightly questionable. Give it back to them, don’t, don’t just give in immediately. You should be able to defend why you charge what you charge, but if there’s, you know. Be reasonable. But if it’s questionable, you know, err on the side of caution and be you know you can refund some or all of that, whatever is in question, if it makes sense. I’m not saying you’ll get the most bang just to give in quickly, but hopefully it doesn’t escalate, you don’t want this to escalate if there’s a dispute. Because if it does, guess what’s going to happen? You’re going to end up with a BBO complaint, or malpractice claim, or negative online review. And those are all really bad things can happen. In my fee agreement, this is the paragraph that deals with disputes. If the client disagrees with any fee or expense, the client agrees to notify me. I want to know about it. Tell me right up front that there’s a problem. And we agree to work in good faith to get that issue resolved. If the dispute raised cannot be resolved, if we can’t reach agreement, then we’re agreeing to go to arbitration, to be the Mass Bar, or since I practice in New Hampshire, with the New Hampshire Bar, or some other fee dispute resolution body, and we agreed to be bound by that, not go to court. I’ve gone to mediation or arbitration once with the Mass Bar Association. And this is where I learned that it’s not worth it. You know, for the amount of money that was involved, it wasn’t worth it, let me phrase it that way. If it’s a large amount, then maybe it is. But with the amount of time it took to prepare for the arbitration, to go back over my time and make sure that every single line item really could be defended. In the end, it worked out fine. Financially, it worked out fine for me. I was satisfied. But I was not satisfied with the amount of time that it took. It took away from my being able to practice law for other clients. So, in hindsight I probably should have been refunded whatever the dispute was and not dealt with it. And that is it. So at this point, why don’t we open it up to any questions that people may have.
So, I’ve only got one question so far in the chat and of course just remind everyone, feel free to continue to submit questions via chat, or feel free to unmute themselves and just to relay the one question that we had in chat is and I’ll just read directly.
Are attorneys allowed use PayPal? I thought you were only specific point of sale vendors we could use like LawPay. I do also want to note that I’ll share a webinar on demand that we have a chat with everyone about electronic payments. Thought you might be able to provide an answer James, thank you.
Yes, you can use, I mean you can use any credit card vendor or processor that you want, there’s Square, there’s PayPal, I think Stripe is another one. You can use anyone that you want. I think the issue that you might be thinking of is what I talked about earlier, in IOLTA. I certainly would not fund a retainer in IOLTA with PayPal, because of the issues that I talked about previously, whereas LawPay is. That’s the one vendor that I’m aware of, that is safe to use for funding the retainer, for funding IOLTA. So that might be what you’re thinking.
Great answer James. Thank you and welcome that person to ask any follow up questions in the chat on with anyone else. And I’ll just keep an eye on that for another minute. In the meantime I still haven’t seen anything else come in, so I’m just again want to thank you for such a thorough presentation, really excellent.
You’re welcome. Thank you all for your time but it was a pleasure doing this for you.
Alright, great, well since you’ve got your contact info there, I’ll leave anyone to grab that in case they have any questions kind of emerge over time. And, of course you can all feel free to contact us at Mass LOMAP, and with that, I’ll just say goodbye to everyone. Thank you so much, James, it was a great presentation. I hope you all have a great evening.
JAMES: Thanks very much. Have a good night. All right.
In addition to links throughout the transcript above, check out the following resources:
LTRC Roundtable Discussion: Technology for Billing and Accounting (ABA Law Technology Today, 2021)
5 Ways Billing Automation Saves Time & Money (ABA Law Technology Today, 2021)
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