Fixed/Flat fee is a static billing model alternative to hourly time-based billing where the fee amount remains fixed without concern to the time spent on a client case. When there is a flat or fixed fee billing, the fee amount is already decided prior to the work being undertaken. Though fixed fee arrangement makes billing easier and reduces the pressure of achieving billable targets, the law firms and attorneys must be cautious about the possible issues with clients. If the amount of work performed or result obtained is not satisfactory to the clients, they might inspect the work of attorneys who have handled the case. If the time and work details are dismissed as an unnecessary hassle and not recorded, the attorneys will face problem demonstrating their work.
When Timekeeping is a Necessity
A flat fee arrangement should be a win-win proposition for both the law firm and their client. Once the fee is agreed upon, clients anticipate good work for their money. Clients often don’t understand the complexity of legal work or the overheads associated with it. If the legal service provided by the attorney is valued as not worth the amount agreed by the two parties, then it raises disputes between them. It becomes a question of ethical conduct that the attorney is not providing the service as specified in the agreement.
In the unfortunate event that a client is unsatisfied with an attorney, they may request to review the attorney’s work. They may request to review time logs and other data pertinent to the work performed. Should the client find the data presented unsatisfactory, they may terminate their relationship with the attorney.
Attorneys placed in these scenarios have to prove they have accomplished the tasks they have charged for.
Tracking of task details and time will show the amount of work the attorney has performed. In fixed fee arrangement, since the clients cannot see the task or item based billing to compare the work against cost of service, tracking time & expenses for the tasks will give justification to the fee charged. An additional benefit of timekeeping is it enabling firms to monitor their attorneys’ productivity and efficiency while working client cases.
Law firms and attorneys ensuring their clients understand the value of their services is imperative; Regardless of how clients orchestrate their payment options, timekeeping will always play a critical role in billing. In fixed fee matters, tracking hours and expenses help law firms prove their work at the time of client disputes. Whether it is one-time fixed fee or monthly retainers for on-going legal matters, keeping the track of hours and work details will validate the legal work. Sometimes, flat fee arrangement may also involve handling of trust account funds which may require reconciling trust accounts of multiple clients every month and keeping it compliant with billing. The clients may ask for different fee options and to handle their changing expectations the law firms should have a suitable system for time tracking and billing that can support flexible fee arrangements. A good billing system with time tracking ability helps law firms standardize their legal work for various legal billing practices.
TimesManager is a cloud based Legal billing software designed specifically for law firms to efficiently manage time tracking, invoicing & split billing activities. TimesManager Billing mediation software offers accessibility to time and expense tracking, split billing, CRM and document management. To make the split billing processing more efficient, the software also integrates with LEDES, ABA and UTBMS task code applications.