Common Legal Billing Mistakes and How to Avoid Them

Legal billing errors cost law firms far more than most partners realize. Between write-downs, write-offs, slow collections, and outright lost revenue, billing mistakes can reduce a firm's effective realization rate to well below 90 percent. For a firm billing $2 million annually, even a 5 percent leakage rate means $100,000 left on the table every year.

The most insidious billing mistakes are the ones that have become so routine they feel normal. Attorneys who bill at the end of the week, invoices that go out 45 days after the work was performed, and vague time entries that invite client pushback are all symptoms of a broken billing process that firms accept as inevitable. They are not. Every one of these problems has a practical solution.

Block Billing Time Entries

Block billing means combining multiple tasks into a single time entry, such as "Reviewed documents, drafted motion, conferred with client - 4.5 hours." This practice is problematic for several reasons.

Many corporate clients and insurance companies have billing guidelines that explicitly prohibit block billing. Entries that violate these guidelines are automatically reduced or rejected by auditing software like Brightflag or CounselLink. Even clients without formal guidelines may question a large block entry because they cannot evaluate the reasonableness of each component.

The fix is straightforward:

• Record each task as a separate time entry with its own description and duration
• Use minimum billing increments (typically 0.1 hours) for short tasks rather than lumping them together
• Train associates and staff on the firm's expectations for entry granularity
• Review pre-bills for block entries before invoices go out

Delayed Invoicing

The longer you wait to send an invoice, the less likely you are to collect the full amount. Clients who receive a bill weeks or months after the work was done have already mentally moved on. The work feels distant, and the perceived value diminishes. Studies show that collection rates drop significantly for invoices sent more than 30 days after the work was performed.

Best practices for timely invoicing:

• Close your billing period on the last day of each month without exception
• Set a firm deadline for attorneys to review and approve pre-bills (e.g., the 5th of the following month)
• Send invoices by the 10th of the month at the latest
• Automate invoice delivery through your practice management software
• Never let time entries sit unbilled for more than one billing cycle

Vague or Insufficient Descriptions

Time entry descriptions are the primary evidence your client has of the work performed. Vague entries like "research," "correspondence," or "attention to file" communicate nothing about the value delivered and are frequent targets for reductions.

Every time entry should answer three questions:

• What specific task was performed?
• What matter or issue was it related to?
• What was the purpose or outcome?

Compare: "Telephone call - 0.3" versus "Telephone call with opposing counsel regarding extension of discovery deadline; agreed to 14-day extension - 0.3." The second entry is virtually dispute-proof.

Failing to Track All Billable Work

Attorneys routinely under-record their time. Quick phone calls, brief email reviews, short conversations with colleagues about case strategy, and time spent waiting at court are all frequently overlooked. Individually these seem trivial, but collectively they represent substantial lost revenue.

Common categories of overlooked billable time:

• Emails under five minutes that still require professional judgment
• Travel time to court, depositions, or client meetings
• Internal strategy discussions about client matters
• File review time when picking up a matter after a gap
• Administrative tasks that are billable under the engagement agreement

Encourage attorneys to track time contemporaneously using running timers rather than reconstructing their day from memory.

Ignoring Client Billing Guidelines

Many institutional clients, insurance companies, and corporate legal departments issue outside counsel billing guidelines that dictate everything from acceptable billing increments to which tasks are reimbursable. Ignoring these guidelines results in automatic reductions that are difficult to appeal.

Common guideline requirements include:

• Prohibited block billing as discussed above
• Rate caps for different timekeeper levels
• Pre-approval requirements for research, travel, or tasks exceeding a certain dollar threshold
• Specific task codes (UTBMS or LEDES format) for each entry
• Restrictions on staffing such as prohibiting more than one attorney at a deposition

Review each client's billing guidelines before beginning work and configure your billing software to flag entries that may violate them.

Poor Accounts Receivable Follow-Up

Sending an invoice is not the end of the billing process. Without systematic follow-up on unpaid invoices, accounts receivable balances grow and collection becomes increasingly difficult. Many firms have no formal collection process at all, relying on attorneys to chase payments when they remember to do so.

A structured collection process should include:

• Automated payment reminders at 30, 60, and 90 days past due
• A designated collections contact who follows up personally on overdue accounts
• Escalation procedures for accounts that reach 90 or 120 days
• Regular AR aging reviews at partner meetings to identify problem accounts early
• Clear engagement letter language about payment terms and consequences of non-payment

Not Reconciling Trust Accounts Promptly

For firms that hold client funds in IOLTA or trust accounts, billing mistakes can create ethical violations. Failing to promptly transfer earned fees from trust to operating, commingling funds, or overdrawing a client's trust balance are serious issues that can result in disciplinary action.

Trust account best practices:

• Reconcile trust accounts monthly without exception
• Transfer earned fees promptly after invoicing
• Maintain a ledger for each client showing all trust transactions
• Never use one client's trust funds to cover another client's expenses
• Assign trust accounting to a trained staff member or outsource to a specialist

Skipping Pre-Bill Review

Sending invoices without attorney review is a recipe for errors, client complaints, and write-downs. Pre-bill review is the quality control step that catches problems before they reach the client.

During pre-bill review, attorneys should check for:

• Time entries that should be written off or adjusted
• Entries that need better descriptions
• Duplicate or erroneous entries
• Compliance with client billing guidelines
• Appropriate matter allocation for shared work

Make pre-bill review a mandatory step in your billing workflow with a firm deadline that cannot be skipped or postponed.

DocketHire Eliminates Billing Headaches

Billing errors are preventable with the right processes and dedicated support. DocketHire's legal billing assistants review time entries, prepare pre-bills, ensure guideline compliance, and follow up on outstanding invoices so your firm collects what it earns. Talk to DocketHire about putting a professional billing support team behind your practice.