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August 18, 2009

Litigation: If you bill by the hour, why not bill twice a month?

Billing twice a month keeps the client more attuned in real-time to the actual economic demands of the project--and helps the client plan.

When things get fast and intense, invoice the client twice a month--just ask first. Hopefully, ideas included in this blog benefit both the client and firms. One theme is we can move from goofy "adversarial" (see this blog's first post in August 2005) and one-night stand relationships many lawyers seem have with clients to true partnerships with clients--by doing things the right way for clients we all "like".

Here's one idea that's unusual but effective. I got it from my Pittsburgh partner Julie McGuire, who does transactional work, and it really seems to work for intense or "fast-moving" projects.

If a new or existing client has litigation or a transaction which is particularly intense and time-consuming--especially in the initial stages--depart from your fee agreement or usual practice with that client and at least temporarily invoice the client every two weeks.

Obviously, you should check with the client and get permission; this could be balked at as an administrative burden or misunderstood as an insult if the client isn't on board.

But even a gung-ho sophisticated corporate client or GC you've serviced for years--which is accustomed to seeing over and over again monthly bills for day-to-day work in the, say, $5000 to $10,000 range--experiences a kind of sticker shock when the bill goes suddenly to $20,000, $40,000 or much higher, even if it's only for a short time.

Billing twice a month does two things: (1) keeps the client more attuned in real-time to the actual economic demands of the project (and lets the client plan) and, (2) assuming that the GC or other client rep is seeing work descriptions on bills that show value, effort and the range of things necessary to perform the litigation or deal, the details and intensity of the work are more "present-to-mind", better understood and more fully appreciated.

In other words, the invoice becomes more of a tool to impart a running report on what you and the client are doing together--and a better picture of your real value to the client on that project.

(from past posts)

Posted by JD Hull at August 18, 2009 01:49 AM

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