Lawyers and other legal professionals know that law firms are tempting targets for cybercriminals. You probably know a friend of a friend who accidentally sent confidential information to opposing counsel. Even so, it is common at many law firms to send sensitive client information via email. In doing so, you may risk ethical complaints, data breach liability, and reputational damage.
At the same time, changing your workflow is challenging, especially when your caseload is growing and staffing is shrinking. LexShare offers an alternative. It combines strong security with products you already use and trust.
👉 Check out the PracticeMaster Integration page to learn more about LexShare
Wait.. why not just add a privilege/confidentiality disclaimer and use regular email?
Tacking on a disclaimer as an email liability shield approach is fast, easy, and familiar, but it might not be secure enough.
Current ABA guidance* recommends a fact-based analysis
In 1999, Formal Opinion 99-413 (1999) stated that lawyers have a reasonable expectation of privacy in standard email. Formal Opinion 477R (2017) changed that guidance.
The 2017 opinion referenced Comment 18 to Model Rule 1.6(c), which states that “factors to be considered in determining the reasonableness of the lawyer’s efforts [to safeguard confidential information when sending information electronically]” include, but are not limited to:
- the sensitivity of the information,
- the likelihood of disclosure if additional safeguards are not employed,
- the cost of employing additional safeguards,
- the difficulty of implementing the safeguards, and
- the extent to which the safeguards adversely affect the lawyer’s ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use).
It also noted that the duty of competence requires attorneys to understand the risks and benefits associated with changing technology (see Model Rule 1.1, Comment 8).
The ABA concluded that sharing client information over the internet is acceptable if the attorney makes “reasonable efforts to prevent inadvertent or unauthorized access,” unless the client requests more security or the fact-specific analysis indicates higher security is required.
*ABA guidance is advisory. Check with your state bar association for local rules.
“Reasonable efforts” require ongoing evaluation of risks and protections
In the eight years since Opinion 477R was published, the list of security risks law firms face has only grown. The tools available to protect communications have changed, too.
Opinion 477R acknowledged the evolving nature of technology. It cited the ABA’s 2016 Ethics 20/20 Commission Report, which declined to recommend specific safety measures, saying that that “technology is changing too rapidly to offer such guidance and … the particular measures lawyers should use will necessarily change as technology evolves and as new risks emerge and new security procedures become available.”
Reputational damage is an independent risk
Clients rely on their attorneys to safeguard their information, and when that trust is breached, the firm can be damaged even if no ethical rules were violated. An email disclaimer will not stop a hacker. When emails are misdirected, it is not always possible to un-ring the bell. Reputational damage can be especially devastating for firms that rely heavily on referrals.
LexShare offers better security without sacrificing ease of use
Lawyers are understandably reluctant to add new technology to their workflows, even when they want the benefits it provides. It takes time to learn a new process. Some tools add too many extra steps, cutting into your already-limited work time. Or they are difficult for clients to use, so your phone is ringing with support requests.
LexShare makes secure sharing easy on you and your clients. You can send or request a document from PracticeMaster with a few clicks:
- You choose the appropriate level of security based on the situation
- You can write the body of the email right in the workflow or get a secure link and add it to your email manually
- You can set up a notification to alert you when the document is accessed or sent
If you choose to add eSignature capability, the process for getting an eSignature is similar.
On your client’s end, the message looks like a normal email; they just click on the link to get the secure document. If you decide to add extra security, the client must answer a challenge question before viewing the document.
Use case: Sending sensitive information to a client
Imagine that you need to share confidential, written information about your client’s matter, and time is limited.
Your perspective: Instead of sending a letter or making an appointment, you decide to send an email and attach the confidential information. Since the information is sensitive, you use LexShare to send a secure link with a pre-arranged challenge question. You complete the entire process inside PracticeMaster in just a few minutes.
The client’s perspective: Your client receives the email in their regular email inbox. They answer the challenge question accurately and read the information on your secure portal.
By emailing a secure link instead of meeting or mailing a letter, you:
- Get the information to the client quickly so you do not lose momentum on the matter.
- Avoid an extra appointment in your calendar.
- Save on paper and postage.
- Keep sensitive data out of email inboxes and limit the risk of unauthorized access to confidential information.
👉 Check out our LexShare video to learn more about this process
Use Case: Receiving confidential documents from a client
In this scenario, you completed the initial consultation virtually and need additional documentation from the client to decide on next steps, including screenshots of texts from the client’s phone.
Your perspective: This particular information is very sensitive, so you use LexShare to send the client a single-use link that allows them to upload the screenshots or files to your secure portal. You complete the entire process inside PracticeMaster with just a few clicks.
The client’s perspective: The client opens the email on their phone or computer, clicks the link, and uploads the necessary files.
By emailing a secure link for the client to upload, you:
- Get a faster response, because the client can complete the task from their mobile device, so you can take the next step in the matter right away.
- Import the screenshots or files directly into PracticeMaster.
- Keep sensitive data out of email inboxes and limit the risk of unauthorized access to confidential information.
See the document sharing process (starts at 2:31).
Use case: Signing a retainer agreement
After reviewing the client’s documentation, you decide to accept the matter. Now you need to get a signed retainer agreement.
Your perspective: The retainer agreement is sensitive, and your client wants to get moving on the matter right away. You decide to use LexShare to request an eSignature on the document. You go into PracticeMaster, select the document, and click “Request eSignature.” You complete the eSignature request process quickly and efficiently.
Your client’s perspective: The client clicks the link, answers the challenge question, and reads the document. Then they sign the document in a few clicks.
Watch the eSignature process from your perspective and your client’s perspective.
By using the eSignature process, you:
- Secure representation fast so the client does not move on to another firm.
- Meet the client’s expectations for speed.
- Save on paper and postage.
- Keep sensitive data out of email inboxes and limit the risk of unauthorized access to confidential information.
👉 Schedule a demo to learn more about how Tabs3 can benefit your firm
Protect your clients, your good name, and your time
LexShare’s plug-and-play integration with PracticeMaster means you can start sending securely right away. Your clients will also welcome a simpler process for sharing and signing. Demo PracticeMaster with LexShare on Tabs3 Cloud today!
Ready to transform your law firm’s billing process? Schedule a personalized demo and discover how Tabs3 Cloud can transform your firm in one complete practice management solution.
The stakes are high: trust account mismanagement is “one of the most frequent causes of [attorney] disciplinary action.” The compliance requirements are voluminous (and sometimes esoteric). With thoughtful planning and attention to detail, however, you can stay compliant.
Note: This article covers general trust accounting principles. The specific rules that apply to your trust accounts may be different, because trust accounting rules are set by states. Make sure to check your state’s rules and consult with ethics counsel as needed.
What is trust accounting?
The guiding principle of trust accounting is simple: Attorneys (and their staff) have a special duty to safeguard their clients’ money because attorneys are fiduciaries for their clients. As fiduciaries, attorneys must act in their clients’ best financial interest. That includes:
- Maintaining separate accounts for clients’ money (the trust account) and the firm’s money (the operational account).
- Making sure that the firm’s money is never commingled with clients’ money.
- Ensuring prompt notification/disbursement when the firm receives money for the client.
- Keeping detailed records of all transactions that involve client money.
- Reconciling trust accounts frequently to detect and correct errors.
The trust account holds clients’ money, like:
- Retainers and advanced fees.
- Escrow deposits for real estate transactions.
- Settlement funds and money awards.
- Other funds received on the client’s behalf.
If an attorney mismanages the trust account, even by accident, the consequences may be serious. Clients might lose trust in the firm. The firm might be liable for damages. Attorneys could face disciplinary action (public reprimand, fines, suspension, and disbarment).
Is a trust account the same as an IOLTA account?
Sometimes people refer to trust accounts as IOLTA (Interest on Lawyer Trust Account) accounts. Not every trust account is an IOLTA account. The type of trust account depends on the interest-earning potential of the client money held.
If the client would earn a minimal amount of interest (because the amount of money is small or it will not be held for long), it is pooled with other client funds in an IOLTA account. The combined funds earn interest, which is used to support legal aid and access to justice.
Larger amounts, or amounts held for a long time, are held in regular interest-bearing accounts (not IOLTA). The interest belongs to the client.
What are the most common trust accounting errors?
The rules for trust accounting are not always intuitive, and it is easy to make mistakes. Common errors include:
- Commingling client and firm funds
- Reconciling the trust account incorrectly or not frequently enough.
- Not tracking all the required information for each transaction
Once a process tied to printers and postal mail, digital tools now enable law firms to implement efficient, cost-effective paperless invoicing. Ready to make the switch? Take the first step toward a more organized and productive invoicing workflow. Download the guide today.
6 principles for getting trust account right
Store client funds separately
This principle is simple, but it can be difficult to apply. Commingling examples include (but are not limited to):
- Using client funds to pay law firm expenses. Never pay firm expenses from the trust account, even if the money has been earned. Move it to the operating account first.
- Moving client money to the operating account before it has been earned. In most cases, retainer funds must be stored in the trust account until they are earned.
- Failing to move earned fees to the operating account regularly. This may seem counter-intuitive, but it is an example of storing the firm’s money in the trust account.
- Handling fixed fees improperly. There is significant variation among states on this issue. Some consider fixed fees to be earned upon receipt; others require lawyers to keep fixed fees in trust until earned.
Most states make an exception to the commingling prohibition for banking fees. In general, law firms may deposit their own funds in the trust account to pay for normal banking fees. Keeping a significant amount of firm funds in the trust account, however, may be a violation.
Keep thorough records
Trust accounting requires especially meticulous recordkeeping. The ABA Model Rules on Client Trust Account Records, Rule 1, provides a good overview of what is typically required:
- A journal of deposits and withdrawals from trust accounts
- A ledger for each client trust account
- Copies of retainer and compensation agreements
- Copies of any accountings to clients or third parties
- Copies of bills for legal fees and expenses
- Copies of records showing disbursements on behalf of clients
- Financial institution records like checkbook registers, bank statements, deposit records, cancelled checks, and substitute checks
- Detailed records of electronic transfers
- Copies of trial balances and reconciliations
- Copies of the parts of the client file that relate to trust accounting.
Note that ABA rules are advisory only in most cases, so you should refer to state law.
Communicate clearly
Keeping the client informed about their funds is part of the attorney’s fiduciary duty. It is also a good way to head off client misunderstandings that eat up your time and lead to disputes. Examples trust account communication include:
- The engagement letter or fee agreement, which should clearly state how money will move through the trust account.
- Statements, which should be sent regularly and should include a summary of the client’s trust account ledger. It is a best practice to send a statement whenever you pay earned fees from the trust account, even if no additional money is owed.
- Notifying the client when the attorney receives funds on their behalf. The funds must also be disbursed to the client within a reasonable period of time to avoid commingling.
Reconcile correctly and on time
Trust accounting requires three-way reconciliation. You must compare the bank statement against your trust ledger (two-way reconciliation) and also against each client’s trust ledger. All funds, down to the penny, must be accounted for.
Three-way reconciliations should be done on a regular schedule and frequently enough to catch errors promptly. Trust errors tend to snowball, so finding them early benefits everyone.
Many firms find it works best to reconcile monthly right before billing statement creation.
Write down procedures
Even if your accounting team is small, written procedures are essential for staying on track. Procedures should cover trust accounting workflows, checks and balances, and encourage prompt reporting of problems so any errors can be corrected swiftly. Procedures should be reviewed and updated regularly.
Know your state’s rules
It bears repeating—general trust accounting knowledge is necessary but not sufficient for trust account compliance. Stay up to date on your state’s rules and take advantage of local CLE resources.
👉 Set up a personalized demonstration with our experienced trainers today.
Tabs3 helps you get trust accounting right
Trust accounting is complicated. Tabs3 Financials can lighten your load.
- Instant communication with your bank, easy-to-read trust ledgers, and streamlined three-way reconciliation reports so you can reconcile faster.
- Flexible recordkeeping so you can store all the details needed for compliance.
- Dashboard summaries to help you spot trust problems early.
- Seamless integration with Tabs3 Billing and Tabs3Pay, an electronic payment solution built for lawyer trust account compliance.
Tabs3 Financials is also available through Tabs3Cloud, giving you more control over where and when you work. Schedule your free demo today.
👉 Paperless Invoicing: Why Your Law Firm Should Embrace the Digital Age
Ready to transform your law firm’s billing process? Schedule a personalized demo and discover how Tabs3 Cloud can transform your firm in one complete practice management solution.
A professional law firm website is one of the most effective tools to attract new clients. With virtually unlimited reach as thousands of clients search online for law firms nearby, your website is the best way to instantly showcase your expertise and make a powerful first impression that ends in a signed contract.
More website visitors become clients when six key features are built into your website’s framework. From maximizing your search engine visibility to demonstrating clear social proof with reviews and testimonials, law firm websites with the following elements can help you enhance your site’s performance, increase conversions, and build a stronger client pipeline for long-term firm growth.
👉 Looking for a low-stress website solution? Watch 5 Reasons Law Firms Need Tabs3 Websites now to uncover what makes a turnkey website a competitive advantage for firms of all sizes.
The Benefits of a Professional Legal Website
Too many law firms see their website as a static digital business card. In truth, your website should be a dynamic part of your marketing strategy that is able to consistently attract, capture, and convert clients.
A well-executed law firm website can deliver numerous benefits. With the right site features guiding leads and prospects through the client journey, your firm can expect:
- Enhanced visibility and reach to help ideal clients find your firm and take the next step.
- More consultation requests with clear calls to action (CTAs) driving form fills and calls.
- Free organic traffic and leads from higher positioning in local law firm search results.
- Stronger credibility and trust through professional design and social proof elements.
- Simple, effective marketing that automatically attracts and captures qualified leads.
- Higher conversion rates by optimizing the user experience with clear guidance.
- A powerful first impression that showcases your firm’s services and expertise from the first click.
When 96% of legal clients begin their lawyer search online and 74% of searches end with a phone call, a strong website designed to increase online visibility is a key driver of client acquisition. Simple, optimized features can elevate basic law firm websites to high-performance engines that generate steady growth.
👉 Top-performing legal websites feature specific elements that drive results. Download Essential Elements of a Successful Law Firm Website now to learn what your website needs to reach its full potential.
6 High-Converting Law Firm Website Features That Win Clients
Like any marketing tool, law firm websites should be optimized and improved over time to enhance their lead generation capabilities. Ensuring key features and high-impact site elements are in place can strengthen your digital marketing strategy and enable your firm to drive more consultations, conversions, and long-term growth.
1. Client-Centric Features That Attract and Capture Leads
If your website is filled with legal jargon and focuses more on your credentials than your clients’ needs, it won’t appeal to prospective clients. Your website content should address the real-world challenges and legal questions your clients face on a daily basis. Visitors need to know you understand their situation and have the expertise to guide them before they submit a form or call your firm.
Today’s clients expect more than just information. They want the ability to take action: pay invoices online, check the status of their case, and securely communicate with their attorney. Your firm can support these expectations with seamless integrations with billing and CRM tools for client convenience.
- Post client-focused content that addresses common pain points and legal questions.
- Show visitors you understand their challenges and how you solve their problems.
- Use clear, consistent messaging and pair it with relevant visuals to engage and build trust.
- Offer practical features like online payments, client communication tools, and case updates to turn visitors into clients.
Focus on the outcomes your clients care about, speak their language, and ensure your website delivers more than information to provide real value for clients.
2. Fast, Mobile-Friendly Experience
A website that takes too long to load or fails to display properly on mobile devices is off-putting and challenging for users. As your firm’s digital first impression, your website should be optimized for speed and feature adaptable, mobile-first design.
When over 60% of searches happen on mobile devices and 40% of users leave sites that take more than 3 seconds to load, the importance of a fast-loading website that instantly adapts to fit mobile screens can’t be overstated.
- Conduct website and page load speed tests to understand where improvements are needed.
- Compress images and choose fast hosting to reduce loading time and bounce rates.
- Ensure navigation menus, buttons, and content display properly on various screen sizes.
Take the user experience a step further by ensuring your site is accessible for all users, including those with disabilities. Prioritize a clean, easily navigable design and straightforward information access.
3. Local Search Engine Optimization (SEO)
It’s incredibly difficult to rank in search results for broad, high-competition terms like “family lawyer,” and users searching for terms like those could be located anywhere in the United States. Instead, successful law firm websites use low-competition, location-based keywords to reach the clients searching for attorneys nearby.
Firms that prioritize local SEO are able to connect with high-intent prospective clients using search terms like “personal injury lawyer near me” or “Boca Raton divorce attorney.” Preparing your website with the right keywords and settings will enable you to reach these users early in their attorney search and generate more qualified leads in your area.
- Develop a strong local SEO strategy targeting your geographic area and relevant keywords.
- Identify the neighborhoods and regions you serve and local legal issues people search for.
- Claim and verify your Google Business Profile and other directories to enhance local visibility.
- Target local leads with Tabs3 Google Ads services to increase clicks, calls, and clients with proven ad strategies that position you at the top of local search results.
Potential clients often click the firm they see first in search results. Implementing a strong local search optimization strategy is a powerful way to increase site traffic from high-intent leads who are ready to convert.
4. Clear and Current Contact Information
Is it hard for leads to get in touch with your firm? If visitors can’t easily find your phone number, email, or office location, it’s harder for prospects to reach out. Easily accessible contact information is essential, yet many law firm websites bury details or complicate the process
Is your current website meeting your needs? From your website’s design to user experience and security, there are many factors that go into providing the best digital experience for anyone who visits your site. Running regular website audits is critical to ensure your site is reaching its performance potential.
5. Highlight Client Testimonials and Social Proof
Credibility markers and social proof help law firms win clients. Without testimonials, case results, or reviews displayed prominently on your website, potential clients have little reason to trust you over competitors. Studies show 80% of legal clients seek out online reviews and testimonials before hiring a lawyer. These elements build your reputation and differentiate your firm when leads visit your site.
- Showcase testimonials, reviews, awards, and case studies throughout your website to build trust and demonstrate results.
- Use specialized tools like Feedback Automatic to display positive reviews on your website and keep negative comments internal.
- Create dedicated landing pages for each practice area with relevant testimonials and results to show qualified leads how you can assist with their specific legal needs.
Ensure testimonials feel authentic and specific. Feedback that goes beyond generic praise is most effective. For example, “John helped me get my life back after my accident” resonates with similar clients. Highlight your firm’s success and team expertise with concrete examples to build trust and approachability.
6. Built-In Engagement Tools
High-converting legal websites do more than inform; they engage and prompt users to explore further or take the next step. Many firm websites function as static brochures rather than dynamic lead generation and client relationship tools. Implementing the right features can help you engage visitors consistently to drive more conversions.
- Follow up on form submissions quickly and create multiple touchpoints before clients decide.
- Create a sales funnel to guide visitors to book a free consultation. Consider offering free tools or guides to build trust and nurture leads with email drip campaigns.
- Measure your website and marketing ROI data to ensure strategies deliver increasing value.
As your firm grows, evolve engagement strategies to handle more leads and client needs. Use your website to start conversations, not just display credentials. Embrace content marketing with helpful resources that build expertise and value.
👉 Want to see how easy it is to launch a high-converting website that works as hard as you do? Schedule a demo to explore Tabs3 Websites now.
An Easier Path to a High-Performance Law Firm Website
The six features above are essential building blocks of a law firm website that attracts and converts new clients. Miss even one and you could risk losing leads, weakening your first impression. Solve your prospecting and client service needs with a site developed by specialists in the legal industry: Tabs3 Websites.
Sites from Tabs3 Websites are backed by years of legal marketing expertise and designed to help your firm look sharper, move faster, and grow smarter. Give clients what they expect from a modern firm: the ability to pay online, get in touch easily, and track their case status securely. From lead capture to payment processing, it’s all built in.
When you launch your new website, you get everything you need to succeed online:
- Professional, modern design
- 10 customizable webpages
- Built-in legal SEO content and FAQs
- Industry-leading security and compliance features
- Done-for-you design, support, and maintenance
- Seamless integration with Tabs3Pay and Tabs3 CRM
- Add-ons like client reviews and Google Ads services
Tabs3 Websites are fast, secure, and purpose-built for the legal industry. Ready to launch a website that reflects the professionalism of your practice? Schedule a demo today and discover your shortcut to a stronger online presence.
👉 Want to see how easy it is to launch a high-converting website that works as hard as you do? Schedule a demo to explore Tabs3 Websites now.
Ready to transform your law firm’s billing process? Schedule a personalized demo and discover how Tabs3 Cloud can transform your firm in one complete practice management solution.
We know that invoicing keeps the lights on. For many small and midsize firms, however, the billing cycle eats up too much attorney time and stretches administrative teams too thin. Going paperless, with the right technology and workflows, can bring billing back into balance.
Tabs3 products are built for law firms like yours. When using Tabs3 Billing, Tabs3 Financials, Tabs3Pay and Tabs3 Cloud, you can reduce or eliminate paper while reducing workload for attorneys and professional staff.
What is paperless billing?
Paperless billing means leveraging electronic recordkeeping and automation to reduce or eliminate paper-based work. Going paperless is good for the planet, your pocketbook, and your workload.
Paper-free processes can speed up time entry, eliminate duplicative work, reduce the chance of statement errors, and streamline collections. You can also reduce the paper needed for trust account compliance and general accounting tasks.
The following sections describe the five steps of a paperless billing cycle.
Step 1: Generate draft statements electronically
Attorneys in firms without modern billing software tend to get stuck doing time entry via hard-to-use programs, spreadsheets, or handwritten notes. Billing clerks translate the time entries to draft statements via manual data entry.
The process creates problems. Generating draft statements takes too long, which ripples out across the firm, because billing clerks are less available for other support tasks. It is easy to misread a time entry or introduce a typo. Fixing errors costs billing clerk time (if the error is caught early) or attorney time (if the client finds the error). Delays compound; they slow the whole firm down and add unnecessary friction to everyone’s work.
The solution is an integrated, paper-free timekeeping and billing solution like Tabs3 Billing:
- Attorneys enter their time digitally via an interface built for their unique needs.
- On the back end, the billing clerk efficiently extracts the time entries.
- The software automatically translates the time entries into a draft statement. You can set up multiple templates in advance so no manual data entry is needed, even if you create statements in many different formats.
Step 2: Manage pre-billing digitally
The traditional statement approval, or pre-billing, process wastes time and paper too. The billing clerk prints draft statements, and stacks of paper are circulated among approving attorneys. Corrections are typically made by hand, introducing interpretation errors when the billing clerk types them in. There is also no central tracking of where each prebill is in the approval process.
Electronic pre-billing solves those problems while eliminating paper. With Tabs3 Billing:
- The billing clerk hands off the draft statement to the attorney by changing the statement’s status in the software. The approval process is tracked automatically, so authorized users can instantly see its status.
- The reviewing attorney gets a notification and opens a digital preview of the statement. They can type corrections or comments directly into the software. Then they mark the statement as reviewed.
- The billing clerk goes into the digital draft statement, resolves any outstanding issues, and finalizes it according to your firm’s procedures.
Once a process tied to printers and postal mail, digital tools now enable law firms to implement efficient, cost-effective paperless invoicing. Ready to make the switch? Take the first step toward a more organized and productive invoicing workflow. Download the guide today.
Step 3: Send paperless statements
Paper statements introduce costs and delays: postage, envelopes, printing, paper, and a process that cannot be fully automated. Even if you are unable to fully eliminate paper statements, you will likely find that some clients prefer electronic statements. Paper statements introduce costs and delays on their end as well.
Tabs3 Billing offers optional email statements, reducing paper and wasted time:
- Email statements consist of a short email with an attached statement in PDF format.
- You can create multiple templates for statement emails ahead of time. You have the option to personalize templates by inserting fields with a simple drag-and-drop interface.
- The fields pull in personalized information, like client name, balance due, and electronic payment links, and automatically insert it in the email’s subject line or body.
- When you set up email statements for a client, you choose an appropriate template.
- The billing clerk can send the approved statement with a single click. The software chooses the selected template, inserts the personalized information into the correct fields, generates a PDF statement, attaches the PDF, and sends the email.
Step 4: Collect payments electronically
In some practice areas, paper checks are the norm. Even in B2B transactions, however, electronic payment use is growing. Most consumers strongly prefer to pay electronically. Getting paid by check generates its own costs: on average receiving a paper check costs $1.01-$2.00, and check fraud is common.
Tabs3Pay integrates with Tabs3 Billing for faster, paper-free collections:
- You can include a live payment link in email statements.
- Clients can pay by ACH, debit card, credit card, PayPal, Venmo, or PayPal Pay Later. They never have to hunt for the checkbook or a stamp.
- The secure, PCI-compliant payment processor is built for law firms, so trust account compliance is baked in. Transactions automatically go into the correct account.
- Payments may be processed more quickly than paper checks.
- You may be able to manage the firm’s costs with surcharging. (Check state and local rules first, as they vary.)
👉 Set up a personalized demonstration with our experienced trainers today.
Step 5: Simplify compliance and recordkeeping
When your accounting processes are done on paper (or in a disconnected set of spreadsheets), it is easy to miss steps or get out of sync. Managing the recordkeeping burden of trust accounting without modern software increases the risk of errors, with the potential for serious business consequences. Paper-based three-way reconciliations are also time-consuming and error-prone.
Tabs3 Billing works with Tabs3 Financials to reduce paper and the risk of ethical breaches:
- Time entry, billing statements, accounts payable, and trust account management modules securely and automatically share the appropriate information.
- Your systems securely communicate with your financial institutions so you can keep a close eye on trust accounting.
- Three-way reconciliations are faster and more accurate with built-in reporting that automatically pulls in bank statements, your trust ledger, and each client’s individual trust ledger.
- By storing records electronically, you can reduce storage costs while making records more accessible to authorized users.
Cut out paper waste and wasted time with Tabs3
With Tabs3 Billing and Tabs3 Financials, available inTabs3 Cloud, you can create a virtually paper-free invoicing process. That works out to streamlined workflows, a faster revenue cycle, and happier clients. Schedule your free demo today.
👉 Paperless Invoicing: Why Your Law Firm Should Embrace the Digital Age
Ready to transform your law firm’s billing process? Schedule a personalized demo and discover how Tabs3 Cloud can transform your firm in one complete practice management solution.
If revenue is the lifeblood of a law firm, the billing function is its beating heart. Whether you specialize in billing or juggle many administrative duties, the questions you ask when opening a new file set the stage for successful billing and collections.
This guide offers a deep dive into definitions and fee structures. It wraps up with a list of questions to help you navigate any billing setup, no matter how complicated. Part 2 of this series will delve into how to bill for various fee structures.
Note: While this guide is software-agnostic, Tabs3 Billing users can get how-to information about each of these methods in the Billing Methods Guide.
An overview of billing terminology
Fee structures are broad categories of legal fees, like hourly, contingency, flat rate, or hybrids.
Fees compensate the firm for its legal work, like appearing in court or preparing a document. The most common fee structure is hourly. For an hourly matter, the fees are the number of hours each timekeeper worked, multiplied by the timekeeper’s rate.
Costs compensate the firm for its expenditures, like copying files or paying court filing fees. Costs are divided into expenses and advances. Expenses represent a portion of the firm’s overhead, like copying files on the firm’s photocopier. Advances are actual payments the firm makes on behalf of a client, like filing fees paid to the court.
Discounts reduce the bill. They can apply to the entire bill, or a partner might write down (not charge for) part of the fee.
Nearly every matter has a written fee agreement, which says how the fee will be calculated, who is responsible for costs, the billing cadence, and other agreements about representation. It may also be called an engagement letter, engagement agreement, fee contract, etc.
Depending on your firm’s size and file-opening process, you may get the actual fee agreement when you are setting up a new matter or only the information related to billing.
Fee structures can be simple or complex
The most common fee structures are hourly, contingency, and flat fee. But there are also hybrids that include any two of those fee structures, or even all three.
Hourly fee structure
Most transactional and defense litigation matters are billed hourly, as are most family law and criminal defense cases. Timekeepers track the number of hours they spend on a matter, and the fee is the number of hours multiplied by the appropriate rate. Clients are usually billed monthly for the fees incurred in the prior month.
For instance, if Attorney A records 5.0 hours at $250 per hour and Paralegal B records 6.0 hours at $150 per hour, the total fees are $2,150 ($265 x 5.0 plus $150 x 6.0).
Tips and tricks for hourly fee structures
- The client is almost always responsible for costs in hourly matters.
- Most discounts are write-downs by the reviewing attorney during the statement review/pre-billing process.
- While the billing rate is set by the fee agreement, you may not have access to the actual fee agreement. Some firms assign multiple rates to a single timekeeper, or set rates based on role/seniority. You may need clarification to choose the correct rate.
- Some matters may have contingency fees or flat fees in addition to hourly fees, so it might make sense to double-check whether an hourly case is purely hourly. For many firms, however, it is rare to see anything other than straightforward hourly billing.
Contingency fee structure
Contingency fee structures are most common in plaintiff-side litigation, like personal injury or civil rights. In a pure contingency case, the firm is only paid if the client recovers money, either through settlement or winning at trial. These cases typically give the attorney a percentage of the recovery, like this:
A schoolteacher experiences sexual harassment at work and engages the firm. The teacher and the firm agree that the firm will initially pay for all costs and will not charge an hourly rate. If the teacher’s claim is successful, the firm will receive 30% of whatever she was awarded and she will reimburse the firm for costs. If she recovers nothing, the firm will not bill her for fees or costs.
After six months of work, the case settles for $100,000. The firm has incurred $5,000 in costs. When the firm receives the settlement check (and it clears), the firm deducts $5,000 for costs plus $30,000 for the contingency fee. The rest, $65,000, goes to the client.
Tips and tricks for contingency fee structures
- Nearly every state prohibits contingency fees in family law and criminal defense matters.
- Some states allow lawyers to create hybrid arrangements that include both contingency and hourly/flat rates. For instance, the client and firm might agree to a discounted hourly rate plus a bonus if there is a good outcome in the case.
- Sometimes the firm covers costs if the client does not recover money, and sometimes the client must pay for costs no matter what the outcome is. If the client is responsible for costs, the attorney might want to bill for costs monthly, once they hit a certain dollar threshold, or at the end of the case.
- If you are billing periodically for costs, the attorney may want to include fees on the statements, even though you will not be asking the client to pay them. Even if you are not billing for costs, the attorney may want to send periodic fee statements. This can reassure clients their case is being worked.
- Even if you do not bill the client for fees, you may need to prepare a fee report for settlement negotiations or when the firm is filing a fee petition. (A fee petition asks a court to make the other side pay the firm’s bill.)
Flat rate or value fee structure
Instead of billing by the hour or retaining part of a settlement, the firm can set an all-inclusive rate for the work. Typically, the client is also responsible for the costs. An example of a simple flat fee engagement:
Jane is forming a corporation. For $2,000, Attorney A agrees to prepare and mail the necessary paperwork with the Secretary of State’s office. Jane must pay $2,000 up front. She will also be billed for copies, postage, and the filing fee at the end of the case (when the costs are known).
Flat fees can also be recurring. For instance, a small business might pay a flat fee every month to have an attorney on call to help with any business problems that arise. Or a large matter might include multiple flat fee payments, with each one due at a certain stage of the project.
Tips and tricks for flat or value fee structures
- Flat fee arrangements can include hourly or contingency fee. For instance, a firm might offer a flat fee on outside general counsel services, but agree that if the client uses more than a certain number of hours per month, the excess time will be billed at an hourly rate. Or a client might agree to pay a flat rate plus a percentage of money recovered in a contingency case.
- Costs might be included in the flat fee, or you might need to bill for them. The attorney may want to bill at the end of the matter, monthly, or when a certain threshold is reached.
- It is usually a best practice to include fee entries when billing costs, even though the client is not paying hourly. This demonstrates the value the client is receiving.
Discounts, write-downs, write-ups, and write-offs impact totals
Reductions or increases in the bill are the last piece of the puzzle. Firms use a variety of words for these concepts, but the concepts themselves are the same across almost every firm.
- A discount means a reduction of the entire bill, usually by a percentage. Discounts can be one-time or recurring.
- A write-down means reducing the amount of time billed for a task, or removing certain time entries completely. Partners typically do this during statement review/pre-billing. It can also happen during collections, in which case you may need to create a revised statement. You may also be asked to run reports about write-downs, because consistent underbilling can undermine cash flow and reduce partner compensation.
- A write-up means increasing the amount billed beyond what is included in the work-in-progress. This might come up in contingency cases, where the firm is entitled to a certain percentage of a settlement even though it exceeds the amount the firm would have billed on an hourly case.
- A write-off means forgiving an unpaid bill (or part of it). Write-offs have tax consequences, so deciding to write off debt is a strategic decision.
Questions to answer when setting up a new case
The following questions can help you get prepared to set up a new case. Depending on your firm, you might get this information from the fee agreement, from someone in your department, from the attorney, or some combination of those. You may want to add other questions that reflect your firm’s unique file-opening process.
For all matters. Detailed questions are in the following sections.
- What is the fee structure for this matter (e.g., hourly, flat rate, contingency, or hybrid)?
For matters with hourly fees.
- What timekeeper rates should be used?
- Do you want to bill monthly, or at a different cadence?
- Should costs be included in every bill? If not, when (e.g., when a threshold is met, at the end of the matter)?
For matters with contingency fees.
- Will costs be billed to the client? If so, when (e.g., when a threshold is met, at the end of the matter)? Should cost invoices include fee entries?
- If we are not sending regular cost invoices, should the client get regular informational statements showing fee entries?
For matters with flat fees.
- Will costs be billed? If so, when (e.g., monthly, when a threshold is met, at the end of the matter)?
- Is there just one flat fee, or multiple flat fees? In either case, when should the flat fee(s) be billed?
- Should we include the unbilled fee entries on the flat fee and/or cost invoices?
Tabs3 makes every fee structure and billing methodology easier
If your firm is not using Tabs3 Billing yet, we would love to show you how easy even complex billing can be. The platform offers virtually unlimited billing options, with smart shortcuts to save you time. You can even handle the statement approval process entirely within Tabs3 Billing with our pre-billing feature. Set up a personalized demonstration with our experienced trainers today.
Ready to learn more? Stay tuned for Part 2 of this series on how to bill for any fee structure.
You’ve done the work. Your client is happy. Two weeks later, they get your bill. It sits on their dining table for a night, then a week, and is then buried under countless other pieces of mail. If you’re lucky, they’ll find it a month later and pay. But for many firms, accounts receivable are ultimately not received.
Getting paid for your work is essential for your firm’s ability to continue serving clients, and yet it often seems that getting paid is harder than the actual work. If you are getting fed up with this cycle, see how these four tips can help simplify your law firm’s collections to benefit your practice.
Tip #1: Start by setting expectations for the billing experience
As a practice management and legal billing software provider, we lean heavily on technology. However, no matter how much we like to think software can solve every issue, the truth is that people are what matter most in the legal sector.
Therefore, before we talk about collections, remember that every interaction you have with a client will influence the impression they have of you. Considering how vital referrals can be in the legal sector, it’s critical that your firm’s billing experience doesn’t alienate a client who could send business your way in the future. And while collections isn’t any client’s favorite topic, it is an opportunity to establish a strong relationship with them. So, take the time to set expectations upfront. Be sure to explain:
- How your rates are calculated
- How and when the client’s invoice(s) will be delivered
- What your client’s payment options are
Naturally, how this is communicated matters. Your clients could be going through an incredibly painful period in their lives. Communicate your billing practices clearly and concisely, and let your clients know how they can reach you if they have questions about your billing.
Finally, give them an opportunity to ask questions about your billing process. If a client is concerned about whether they’ll be able to pay, having that discussion can help them understand what they should do before starting. Building this foundation of clarity, transparency, and trust early can improve both your collections as well as your ability to work with the client.
Tip #2: Review your collection policies, procedures, and reporting practices
Consistency makes billing and collections easier, both for clients and your firm’s internal team. For example, when is a bill sent? When is a follow-up reminder sent? When is a client’s balance written off, and how is that squared in your books? Having a consistent approach to these situations makes it easier to automate, increasing your firm’s ability to collect and eliminating opportunities for client frustration.
Many firms don’t have these collections policies in place, and those that do often implement them inconsistently. This leads to two common outcomes:
- Clients are billed, followed up with, or written down or off, but this isn’t clearly communicated internally. When this happens regularly, it can leave your accounts receivable in a confused state, putting your firm’s cash flow at risk.
- Clients don’t know what to expect and, therefore, have a poor experience when they finally do receive your invoice. This can leave clients on a sour note, impacting their likelihood of being promoters of your firm.
Take the time to review your collections policies, procedures, and reporting practices. Doing so can improve your internal and external communications, make your teams more efficient, leave clients happier, and remove ambiguity from the billing process.
Tip #3: Provide clear and timely statements
We started by saying that one of the most important parts of billing is setting expectations, and we stand by that. Clients are more likely to pay when their service is recent and they know what’s coming. Alternatively, if your clients are surprised by a bill or there’s been a lapse between their service and your invoice, it’s almost always harder for your firm to collect. That means more time spent following up and less time on what drives your firm forward. Providing clients with easily-understood invoices promptly after their service is crucial to maintaining a predictable revenue cycle.
How can you do it? Dozens of ways. If you use a customer relationship management platform, you can enter notes and reminders there and add notifications letting you know when to bill. Then, you can execute those tasks in your accounting platform. You can then set a reminder for when to follow up. You can repeat this process until you’re able to collect.
Tabs3 can help you quickly manage billing, follow-ups, and the rest of your firm’s collection needs. From sending invoices by email immediately after service to writing off client balances, Tabs3 helps your firm administrators accurately and efficiently enter billable hours, leaving them with more time for the work that drives your law firm forward.
Tip #4: Make it easy for clients to pay
The use of checks and cash is declining, and with so many forms of cashless payment available, each client may have different preferences for how they pay. Therefore, we recommend you avoid forcing a single payment method on your clients. For example, some clients may not have a PayPal account set up, so having your default payment method as PayPal may create enough friction to delay or prevent your collection.
Instead, offer as many payment options as you can. That way, clients can pick whatever they’re most comfortable with. Done manually, offering multiple payment options can be tedious, but it doesn’t need to be. Tabs3Pay allows you to share a single payment link in your emailed bills, letting clients pay securely as soon as they get your message.
Increase your connections to increase your collections
There are dozens of reasons a client might not pay their bill on time. They may have forgotten it, ignored it, or not understood it. No matter what the reason is, it can be prevented with quality communication upfront and a prompt, user-friendly billing process after.
While you focus on setting expectations, lean on Tabs3 to simplify your billing process so your firm’s administrators can manage their time, not collections.
To learn more about how Tabs3 can help you bill better, schedule a demo today!
Historically, law firms have been hesitant to accept credit card payments, largely due to security and compliance concerns.
This hesitance may have been justified in the past, but today’s attorneys have every reason to implement online payment processing. Modern legal payment processing solutions allow practices to protect clients’ card information while still allowing them the convenience of quick and simple online payments. In addition, firms are able to safeguard trust accounting practices and ensure adherence to compliance.
Here are seven key benefits of online payments and credit card processing for law firms.
1. Attract more clients
In the past, law firms shied away from accepting payments by card. But today’s clients see paying by card as normal in a professional context, and a growing number of your firm’s prospective clients expect to have the option. In fact, 84% of consumers now consider the option to pay by card as either a “nice to have” or a “must have.”
If you aren’t offering clients convenient ways to pay, they’ll be more likely to move on with another firm.
2. Build a strong client-attorney relationship
The convenience of paying by card can also boost client satisfaction. By accepting online credit card payments, you’re signaling to your clients that you care about them enough to make their experience with your firm as streamlined and effortless as possible.
Allowing your clients to make convenient online credit card payments also improves the chances they’ll pay quickly and reduces the need to follow up about their invoices.
3. Streamline workflows
Online payment processing can also cut down on the administrative hassle associated with collecting, recording, and allocating payments, especially when your payment processor is integrated with your legal billing software.
With the right software tools at your disposal, you can streamline billing and accounting processes by including payment links when you email your invoices, then use your legal billing software to automatically record and allocate payments as they come through.
It’s less work for your team than manually cashing and processing mailed checks, and it frees up more time to spend on service to your clients.
4. Get paid faster
The harder it is to pay your firm’s invoices, the more likely it is that those invoices will end up getting lost, forgotten, or put off until later. Providing clients a convenient and easy way to make payments can reduce the average time it takes them to pay and help your firm eliminate cash flow and collections issues.
In fact, one survey of legal professionals found that firms that accept digitized payments by card get paid 39% faster on average. That’s a significant improvement for legal professionals looking to collect payments.
These quicker payment turnarounds also make it easier for your firm to budget by taking the guesswork out of your forecasted monthly revenue.
5. Receive payments on retainer
Legal retainers are easier to manage if your firm is accepting credit card payments for trust or client funds deposits
That means you won’t need to waste waiting for a check to collect the money you have already earned. A good credit card processing solution for lawyers will also allow your firm to easily request funds when a client’s trust account balance gets too low.
It’s more efficient for the members of your firm and more convenient for the client, who doesn’t need to put in extra work to keep their trust account funded.
6. Compliant credit card payment is possible
Perhaps the most common reason for law firms to avoid credit card payments is the fear of violating the ABA’s ethics rules for trust accounting.
Under Rule 1.15 of the ABA’s Model Rules of Professional Conduct, there are strict rules governing the use of client trust/IOLTA accounts. Specifically, law firms have to take care never to commingle client and operational funds and to withdraw funds from a client trust account only as fees are earned or expenses are incurred.
Violating these regulations can come with significant repercussions, even if funds were commingled or withdrawn from a client trust account by mistake. For this reason, it pays for legal practices to be extra cautious when processing trust account payments.
The problem is that most generic payment processors withdraw their processing fees directly from the same account they deposit payments into. That means your client’s trust account funds are being used to pay processing fees, which is a direct violation of the Bar rules. And routing payments through your firm’s operating account won’t work either, since the ABA prohibits the commingling of funds between separate operating and trust accounts.
A legal software solution like Tabs3Pay can automatically withdraw processing fees from your firm’s operating account while depositing funds into the client’s trust account, so you can enjoy the benefits of trust credit card transactions without risking your practice’s professional standing.
7. Online payment processing is secure
The risk of security breaches is another reason law firms hesitate to invest in credit card processing. These concerns are justified given law firms’ responsibility to protect their clients’ confidentiality and credit card information, but today’s software solutions maintain a high level of security.
A reputable legal payment solution should allow your clients to log in to a secure online portal to make their payments, so your firm can ensure that card data remains encrypted and secure as payments are processed.
Your practice should look for credit card processors that are compliant with the Payment Card Industry Data Security Standard (PCI DSS), which offers an exceptional level of security and safeguards your clients’ credit card information throughout online transactions.
Modernize your law firm’s payment options with Tabs3Pay
Tabs3 Software is an industry-leading provider of practice management, billing, and accounting software for lawyers. With Tabs3Pay, we’ve created a payment processing solution designed to meet the needs of legal practices.
Unlike most generic payment processors, Tabs3Pay includes safeguards to ensure that your firm stays compliant with ABA trust accounting rules while processing credit card payments. Our legal-specific payment processing software also offers:
- Simple and transparent pricing
- Certified PCI-compliant security
- The ability to accept payments either by credit card or by eCheck
- A surcharging feature that allows your firm to pass on credit card processing fees to clients (available in states that allow credit card surcharging)
If you’re ready to get started with convenient, compliant credit card processing for lawyers, get in touch or schedule a demo.
Reflect before you have to collect!
Over the course of the pandemic, clients may have been increasingly unable or unwilling to pay for services they received. Tabs3 Software has worked to streamline the processes of billing and getting paid.
A change in the payment behavior of your clients may have been part of the pandemic’s collateral damage, and may have had an effect on your business’s cash flow. To minimize future risk, a comprehensive review of policy, procedures, reporting, insight, technology, and people is recommended.
Review your policies, procedures, and reporting
Many firms do not have a consistent policy that guides their collections process. It’s important to invest time and resources into establishing a policy that guides email content and communication around payment requests, to avoid damaging client relationships.
Provide clear, accurate, and timely statements
Clients are more likely to pay quickly when the service is recent and fresh in their mind. As time passes, invoices become more difficult to collect.
A key step to optimizing your collections process is to bill via email. Not only can you then invoice customers right after services are rendered, but you won’t have to wait a few days for bills to make their way to customers.
Be certain to provide enough details in the invoice while keeping legal jargon to a minimum. Recording billable hours and fees correctly also makes it easier for your bookkeeper to do their job. Every feature in Tabs3 Billing is designed to facilitate accurate entry of time and money.
Good software helps you accurately track receivables, including the invoices you’ve sent, what’s been paid, and what invoices are outstanding.
In some instances, customers may dispute an invoice and refuse to pay if they’re dissatisfied with the services they received. The ability to Write Down or Write Off all or a portion of a client’s accounts receivable balance is another way Tabs3 can simplify the work administrators do every day.
Make payments as easy as possible
Don’t force your customers to pay in any specific way. The more options you give them, the more likely they will pay you on time.
Tabs3 Billing allows you to enter a payment link when you email statements, so clients can pay securely as soon as the email is in their inbox. Even better, payments are applied directly to client accounts so you don’t have to enter a thing. Tabs3Pay allows you to get paid faster, right from within Tabs3 Software.
Use this as a chance to connect
Every interaction you have with your client leaves an impression. This is especially true when it comes to collections. Whether it’s over the phone or through email, it can be a challenge to address a difficult topic. Put yourself in their shoes and think about how you would want to be addressed in the situation. In addition, use this opportunity to let them know you appreciate their business.
There are many reasons clients may not pay their bills on time. Forgetfulness, negligence, unclear or incorrect bills, and subsequent delays can create unwanted challenges that can put your business at risk.
See how Tabs3 Billing and Tabs3 Pay can make billing and getting paid easier for everyone in your firm. Schedule a Free Walkthrough Demo of Tabs3 Now.