Ask three lawyers how billing works at their firm, and you’ll get three workflows, but underneath they share the same machinery: time gets recorded, reviewed, and turned into an invoice a client is willing to pay. This guide walks through the machinery the way established firms actually run it, including the parts most explainers skip: prebill review, task codes, e-billing, and the difference between costs a firm can and can’t pass through.
How Do Attorneys Bill?
Attorneys bill under one of four fee arrangements, set in the engagement agreement before work begins: hourly (time multiplied by an agreed rate, the default for unpredictable work like litigation), flat fee (one price for a defined matter), contingency (a percentage of recovery), or a hybrid of those. Most firms also take retainers held in trust and drawn down as fees are earned.
From there, billing at a real firm is a monthly production cycle:
- Timekeepers record their work throughout the month, entry by entry, against clients and matters.
- Costs post to matters as they’re incurred: filing fees, court reporters, copies, postage.
- The billing clerk generates prebills: draft statements the responsible attorney reviews to fix descriptions, write down time where warranted, and catch missing entries.
- Final statements go out by email or e-billing portal, with online payment links, and trust balances are applied where fee agreements allow.
- Payments post and A/R are worked: reminders on aging invoices, replenishment requests on depleted retainers.
The quality of step 3 determines almost everything: firms that review prebills promptly bill faster, write down less, and collect more.
How Do Attorneys Bill Their Time?
Time is billed in increments, almost always tenths of an hour (0.1 = 6 minutes), occasionally quarters. Each entry carries five things: the date, the timekeeper, the matter, the time (rounded up to the increment), and a description specific enough that the client recognizes the work. A two-minute call to opposing counsel is a 0.1; “Telephone conference with opposing counsel regarding deposition scheduling” is a description that gets paid.
Two conventions matter more as clients get more sophisticated:
- Contemporaneous entry. Time recorded as work happens is more complete and more accurate than time reconstructed at week’s end. Timers and mobile entry exist to make the honest path the easy path.
- Task codes. Insurance and corporate clients often require UTBMS task and activity codes (the ABA-developed litigation code sets) on every entry, submitted as LEDES-format e-bills. Firms that bill these clients need software that applies codes at entry and validates statements before submission, because coding errors come back as rejected invoices.
The ethical floor under all of it: bill only time actually worked, rounded to the agreed increment, at the agreed rate. Padding is a disciplinary offense; chronic underbilling quietly starves the firm.
What Is Block Billing by Attorneys?
Block billing is combining several tasks into one time entry: “Draft motion, call with client, review discovery responses: 5.8 hours.” It obscures how long each task took, which is why clients distrust it, courts cut it in fee petitions, and e-billing systems increasingly reject it automatically under client billing guidelines.
“Draft motion; telephone conference with client regarding settlement posture; review discovery responses – 5.8 hours”
– Block billing: one entry, three tasks, zero accountability
The fix is mechanical, not moral: one task, one entry, one time value. “Draft motion for summary judgment, 3.2” then “Telephone conference with client regarding settlement posture, 0.4” then “Review defendant’s responses to first set of interrogatories, 2.2.” Same work, same total, but every line survives client review, court scrutiny, and e-billing validation. Billing software that makes rapid single entries effortless (timers, saved phrases, entry-splitting tools) is how firms break the block-billing habit without slowing lawyers down.
What Can Attorneys Bill For?
Whatever the engagement agreement makes billable is performed in service of the matter. In practice, three buckets:
- Professional time: research, drafting, review, court appearances, depositions, negotiations, and substantive communications (calls, emails, meetings) about the matter, including paralegal time on legal work at paralegal rates.
- Advanced costs (hard costs): out-of-pocket payments to third parties on the client’s behalf: filing fees, expert witnesses, court reporters, service of process. These pass through per the agreement and must be tracked to the matter.
- In-house costs (soft costs): copies, postage, mileage, research databases. Billable only if the fee agreement says so and at reasonable rates; many firms absorb them.
What’s generally not billable: firm overhead, rectifying the firm’s own errors, clerical work like filing and scheduling, and time spent preparing the bill itself. When in doubt, the engagement letter is the referee, and the fastest way to lose a client’s trust is to bill for something they never agreed to pay.
Billing Built for How Firms Actually Work
Tabs3 Billing has run law firm billing for over 40 years: fast time entry with timers, prebill workflows built for billing departments, UTBMS coding and LEDES e-billing, trust integration, and Tabs3 Pay for online payments. See it at tabs3.com or schedule a demo.