Tools to improve billing & payment workflows

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Tools to Improve Billing and Payment WorkflowJoshua Lenon

Colin McMahonClio

#ClioWeb

Instructor

Joshua Lenon

• Lawyer in Residence at Clio• Attorney Admitted in New York• @JoshuaLenon

Colin McMahon

• Training Specialist at Clio

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Agenda

• Collecting payment• Documenting work completed and expenses• Issuing customized bills• Depositing and transferring funds• Trust documentation

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COLLECTING PAYMENT

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Clio Firms Get Paid First

• ~115,000 bills generated in the first 3 months of 2015

• 36.5% of those bills were marked as paid on the SAME DAY– Trust Accounts Advanced Fee Deposits– Flat Fees Upfront– Credit Card Payments

Unpaid

63%

Same

Day

Paid

37%

Q12015Bills

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Accounting vs. Legal Accounting

Accounting for most businesses is backwards when it comes to legal:• Law firms must track both operating accounts and trust

accounts• Trust accounts are a liability under normal accounting rules,

but are tracked as assets in most accounting software

Lawyers need specialized accounting software.

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How Trust Requests Differ from Invoices

Law firms issues 2 types of documents to clients about money

1. Invoices – work performed by the lawyer which is owed by the client

2. Trust requests – asking for funds to be deposited into a trust account

Law firms need accounting systems that can track both separately.

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Credit Cards for Lawyers

Most jurisdictions let lawyers accept credit cards, with caveats:

• Credit cards may be used to deposit funds in trust & operating accounts• Fees and chargebacks should never be withdrawn from trust

accounts

Law firms need specialized credit card processors.

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Trust Request Generation Demo

• Drafting a Trust Request• Issuing a Trust Request– Via email– Via Clio Connect

• Marking a Trust Request paid

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Powered by LawPay

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DOCUMENTING WORK COMPLETED AND EXPENSES

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Fees

Lawyers are entitled to a reasonable fee for their work.

Reasonable fees are judged by 8 factors including:• Time & labor required, novelty & difficult of the issues, & skill

required• Preclusion of other employment• Customary fees in that locale• Amount in dispute• Experience, reputation, and ability of the lawyer

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2 Recommended Fee-Related Documents

1. Engagement / Retainer Contract stating terms of client billing– Get it in writing– Get it signed by the client– Mandatory inclusions– Required for contingency fees , nonrefundable, flat fees, & fee

sharing2. Invoices– Detailing work performed, personnel invoiced, and outputs

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Client Preferred Pricing Strategies

• Transparent pricing - 37%• Guaranteed pricing - 27%• Value-based pricing - 26%• Lowest price - 10%

Source:AltmanWeil2014ChiefLegalOfficerSurvey

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Better Billing Tips

1. Better billing starts before you send the bill.2. Client are seeking transparent bills; not lower bills.3. Timing matters with billing. Bill consistently & frequently.4. Use trust deposits or alternative fee arrangements to avoid

collections.

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Time Tracking in Clio Demo

• Time entries from calendar, tasks, & documents• Time entries via timer, matters, or bulk via activities

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ISSUING CUSTOMIZED BILLS

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Big Law Approach to Billing

• Regular time input• Digital bills and payment options• Frequent billing• Staff for accounting and collections• Discouraging write-offs

Source:“FirmsTurntoSpecialiststoBoostCollections,”NewYorkLawJournal,12/08/2014

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Discounting

Discounts & write-offs rewards good and bad clients alike.

<10%

10-19%

20-20%

30-39%

LateBills&Discounts

Often NeverSource:“LawFirmBillingSurvey,”BusinessofLawBlog,08/28/2014.

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Discounting

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Clio Bill Customization Demo

• Controlling bill contents at generation– Level of detail– Statement of Account– Discounting

• Sharing bills with clients– Via email & Clio Connect

• Clio Payments for invoices too• Bill Themes

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DEPOSITING AND TRANSFERRING FUNDS

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Trust Account Records

• Have an IOLTA / Trust Account• Deposit Slips– Date– Source– Client or Matter

• Cash Receipts Book

• Disbursement Records– Cancelled Checks– Electronic Records

• Ledger– Client or Matter entries– Transfers, receipts, balances & more

• Bank Statements

FloridaRULE5-1.2TRUSTACCOUNTING RECORDSANDPROCEDURES

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Clio Funds Transfer Demo

• Bank accounts in Clio• Depositing funds into an account• Linking to funds to client or matter• Transferring funds– Transactions in Contacts & Matters– Pay an invoice– Between matters belonging to the same client

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TRUST DOCUMENTATION

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Trust Accounting

• Monthly reconciliation–balance per bank–deposits in transit–outstanding checks

• Comparison of reconciled balances and ledgers

• Annual listings–Unexpended trust money

• Annual accounting certificate• 6 year retention requirements

FloridaRULE5-1.2TRUSTACCOUNTING RECORDSANDPROCEDURES

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Clio Reports Demo

• Reports– Types

• Trust Ledger• Client Ledger

– Preserving reports• Exporting reports

– PDF– CSV

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QUESTIONS?

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Thank You

Joshua Lenon

[email protected]

@JoshuaLenon

Linkedin.com/in/joshualenon

1-888-858-2546

Colin McMahon

Linkedin.com/in/colinmcmahonclio