Ask three lawyers how billing works at their firm, and you’ll get three workflows, but the core is the same: time is recorded, reviewed, and turned into an invoice a client will pay. This guide explains the main pieces real firms use, including prebill review, task codes, e-billing, and the difference between costs a firm can pass through and costs it can’t.
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 uncertain work like litigation), flat fee (one price for a defined matter), contingency (a percentage of recovery), or a mix of these. 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 cycle:
- Timekeepers record their work throughout the month, entry by entry, against clients and matters.
- Costs post to matters as they happen: filing fees, court reporters, copies, postage.
- The billing clerk prepares prebills: draft statements the responsible attorney reviews to fix descriptions, write down time when needed, and catch missing entries.
- Final statements go out by email or e-billing portal, with online payment links, and trust balances are applied where the fee agreement allows.
- Payments post and accounts receivable are worked: reminders on aging invoices and replenishment requests on low retainers.
Step 3 matters most. Firms that review prebills quickly bill faster, write down less, and collect more.
How Do Attorneys Bill Their Time?
Time is billed in increments, usually tenths of an hour (0.1 = 6 minutes), and sometimes quarters. Each entry has five parts: the date, the timekeeper, the matter, the time rounded to the agreed increment, and a description clear enough that the client knows what it was for. A two-minute call to opposing counsel is still 0.1; Telephone conference with opposing counsel regarding deposition scheduling is the kind of entry that gets paid.
Two habits matter even more as clients get stricter:
- Real-time entry. Time logged while work happens is usually more complete and accurate than time rebuilt at the end of the week. Timers and mobile entry make the right habit easier.
- Task codes. Insurance and corporate clients often require UTBMS task and activity codes on each entry, sent as LEDES-format e-bills. Firms that bill these clients need software that adds codes as work is entered and checks statements before they go out, because coding mistakes often mean rejected invoices.
The ethical floor is simple: bill only the time actually worked, round only to the agreed increment, and use the agreed rate. Padding is a serious offense; chronic underbilling slowly starves the firm.
What Is Block Billing by Attorneys?
Block billing is putting several tasks into one time entry: Draft motion, call with client, review discovery responses: 5.8 hours. That hides how long each task took, which is why clients distrust it, courts cut it in fee petitions, and e-billing systems often reject it under client billing rules.
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 simple, 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 written questions, 2.2. Same work, same total, but each line is easier for the client, the court, and e-billing software to review. Billing software that makes fast single entries easy — timers, saved phrases, and split-entry tools — helps firms break the block-billing habit without slowing lawyers down.
What Can Attorneys Bill For?
Whatever the engagement agreement makes billable is work done for the matter. In practice, there are three buckets:
- Professional time: research, drafting, review, court appearances, depositions, negotiations, and important calls, emails, and meetings about the matter, including paralegal time on legal work at paralegal rates.
- Advanced costs (hard costs): out-of-pocket payments to third parties for the client’s matter: filing fees, expert witnesses, court reporters, service of process. These pass through under the agreement and must be tracked to the matter.
- In-house costs (soft costs): copies, postage, mileage, and research databases. They are billable only if the fee agreement says so and the rate is fair; many firms absorb them.
What’s usually not billable: firm overhead, fixing the firm’s own mistakes, clerical work like filing and scheduling, and time spent preparing the bill itself. When in doubt, the engagement letter decides. 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
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FAQ
Why is the prebill review step so important in law firm billing?
Prebill review is where draft statements are checked before they become final invoices. The responsible attorney can fix unclear descriptions, correct missing or wrong entries, write down time when needed, and make sure costs are assigned to the right matter. Because this step affects invoice accuracy and client trust, firms that review prebills quickly tend to bill faster, cut write-downs, and collect more reliably.
What makes a time entry more likely to be accepted by a client?
A strong time entry is timely, specific, and tied to a clear task. It should include the date, timekeeper, matter, amount of time, and a clear note of the work done. For example, Telephone conference with opposing counsel regarding deposition scheduling is much better than call. For clients that require UTBMS codes or LEDES e-billing, correct coding is also essential.
Why do clients and courts object to block billing?
Block billing puts several tasks into one time entry, so it is hard to see how much time went to each one. That lack of detail can make invoices harder for clients to review and easier for courts or e-billing systems to cut or reject. Breaking tasks into separate entries creates clearer accountability without changing the total work done.
Are all law firm costs automatically billable to the client?
No. Costs are billable only if the engagement agreement allows them and they are tied to the matter. Hard costs, such as filing fees or court reporters, are often passed through to clients. Soft costs, such as copies, postage, mileage, or research databases, depend on the fee agreement and fair pricing. Firm overhead, clerical work, fixing the firm’s own mistakes, and preparing the bill itself are usually not billable.
How does legal billing software support the billing process?
Legal billing software helps firms record time, track costs, generate and review prebills, apply trust balances, process online payments, and manage accounts receivable. For firms serving insurance or corporate clients, features like UTBMS coding, LEDES e-billing, and invoice checks can also reduce rejected invoices and make billing rules easier to follow.