Pricing and Billing for Law Firms

Terrell A. Turner, CPA

Terrell A. Turner, CPA

CEO, TLTurner Group

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• Legal Administrator Coaching
• Bookkeeping & CFO support
• Financial Optimization Support
• Law Firm Finance Chair – ABA
• www.TLTurnerGroup.com​

Learning Objectives

Understand the different ways law firm pricing works

Discuss collection best practices

Explore billing best practices

Law Firm Pricing Strategies

• Hourly Billing
• Flat-Fee Pricing
• Contingency Fee
• Subscription Pricing
• Task Based Pricing
• Value-Based pricing
• Blended Pricing Approach

Generated with ChatGPT-Dalle

Hourly Billing Model

• Most common billing model
• Based on time worked
• Benefit: Transparent and easy to justify
• Risk: Can discourage efficiency
• Use case: Litigation, defense and ongoing advisory

Flat-Fee Pricing Strategy

• Common when the scope is defined
• Based on time worked
• Benefit: Cost is predictable for the client
• Risk: Slightly out of scope work can reduce profitability
• Use case: Transactional or routine services

Generated with ChatGPT-Dalle

Contingency Pricing Strategy

• Payment is tied to the success of the case
• Percentage of the recovery maybe standard
• Benefit: The client does not cover the cost upfront
• Risk: Law firm covers the cost upfront
• Use case: Personal injury, Worker’s Comp, Class Action, Civil Rights Cases

Subscription Pricing Strategy

• Not a very common billing model
• Based on expected work required
• Benefit: Builds client loyalty
• Risk: Out of scope work can be costly
• Use case: Advisory and limited scope legal support

Generated with ChatGPT-Dalle

Task Based Pricing Strategy

• Pricing is broken down by the specific legal tasks
• Ties the cost to the clients outcome
• Benefit: simplifies budgeting and planning
• Risk: requires efficiency and experience to limit risk
• Use case: Real Estate, M&A support, Litigation Phase

Value-Based Pricing Strategy

• Fees are based on the value delivered
• Useful for high-stakes or transformative legal work
• Benefit: Focuses on the outcome for the client
• Risk: Requires a higher level of trust with the client
• Use case: High-stakes or business critical matters

Generated with ChatGPT-Dalle

Blended Pricing Strategy

• A mix of multiple strategies
• Increases the firm’s flexibility to negotiate services
• Benefit: gives the client options in the decision making process
• Risk: increases complexity for the billing team
• Use case: Legal support that can turn into litigation

Billing Best Practices

• Set Clear Billing process
• Use engagement letters
• Set deadlines for the legal team
• Review legal activity on a weekly basis
• Bill on a routine schedule

Improving Billing Accuracy

Practices that can lead to improvements

• Pre-Bill Review process
• Avoid Block Billing (itemize)
• Understand the model rules and professional responsibility rules
• Track Write-offs & Adjustments
• Audit billing processes regularly
• Rotate responsibilities (cross train)

Collection Best Practices

• Understand the importance
• Set expectations early
• Track Aged Receivables
• Know your Collection Rate
• Collect as a team effort

Preventing Collection Problems

Practices that can lead to improvements

• Run credit and intake risk assessments
• Utilize evergreen retainers for ongoing work
• Require payment methods on file for automated payments
• Communicate with attorneys for collection issues
• Review for common collection trends

Accounts Receivable Aging

Questions

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Let's Connect!

Terrell A Turner, CPA​

Law Firm + Finance

www.TLTurnerGroup.com​

Terrell@TLTurnerGroup.com​