The Future of Billing

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October 21, 2023

Ask anyone who has worked at a law firm about legal billing and you will find it is quite the frustrating process.  Paralegals and law firm assistants are tasked with using oftentimes outdated and complex software to generate bills for mailing via USPS snail mail.  Sadly, some of these bills are sent two, three, four or even more times before they are paid.  In fact, some legal bills go unpaid, prompting legal action from the law firm itself.  Let’s take a quick look at how legal billing might change as time progresses.

The End of Time-based Billing

Attorneys and paralegals dread the prospect of legal billing in six-minute increments.  Furthermore, many clients would prefer to pay a flat rate as opposed to paying for chunks of time.  Legal billing would be significantly easier for all parties if it were converted to a flat rate per project or time-based billing centered on larger increments of time than a mere six minutes.  In other words, legal billing will likely shift to value in accordance with both deliverables and targets as opposed to the specific number of minutes invested in a project.

Client-centric Pricing

Look for the billable hour to give way to billing that is centered on specific services provided to clients.  Most arrangements for hourly fees are uncapped.  This means an attorney’s billable hours can compile infinitely, completely at the legal practitioner’s discretion. If enough clients start to request legal services be provided at a flat rate or at least with a cap, the billable hour will gradually fade away.  

Furthermore, hourly billing in the context of legal services does not reflect actual value.  The bottom line is each hour is not worth exactly the same amount of money.  Why should a client pay the same amount of money for one hour when more or less important work was provided in the next hour for the same price?  As time progresses, that many more attorneys will shift to alternative legal billing models that actually reflect the value of the work performed.

Tech-driven Billing

Legal billing technology is quickly improving with each passing day. We are nearing the point at which it is no longer necessary for paralegals or other support staff to manually input data into legal billing programs. Several functionalities are being integrated into a single platform, enhancing the efficiency and flexibility of legal billing.  Legal billing software is integrating solutions with analytics, payments, accounting data and more.  Furthermore, attorneys of the future will access and modify their firm’s billing systems from remote locations ranging from coffee shops to hotels, airports and elsewhere.

The full automation of legal billing is on the horizon.  Instead of wasting a human employee’s time by requiring manual timekeeping, the process will be automated with billing software.  In fact, artificial intelligence is also enhancing legal billing.  Data is gathered, cleaned and analyzed by AI. Machine learning is also used to interpret the activity descriptions of legal billing for the purposes of generating billing codes on invoice line items.  It is only a matter of time until this technology reaches the mainstream. Though it might take years or even decades for self-coding artificial intelligence to be used at law firms across the country, such technology will move into the legal mainstream in the future.

Pay in More Than One Way

As time progresses, law firms will move toward making it that much easier to get paid.  Aside from paying with credit cards and checks, law firms will eventually segue to accepting payment through PayPal and possibly even Bitcoin.  The use of PayPal and other similar web-based, digital payment options is convenient for both law firms and clients, ultimately making it that much easier to bill quickly and easily from any location.