Chapter 5 : Legal Fees, Timekeeping and Billing

billable time

Actual time that a legal assistant or attorney spends working on a case and that is directly billed to a client's account. Includes any activity used to further a client's case, othe than clerical functions.

blended hourly rate

An hourly rate that is set taking into account the blend or mix of attorneys working on the matter.

client hourly rate

Fee based on one hourly charge for the client, regardless of which attorney works on the case and what he or she does on the case.

attorney or legal assistant hourly rate

Fee based on the attorney's or legal assistant's level of expertise in a particular area.

activity hourly rate

Fee based on the different hourly rates, depending on what type of service or activity is actually performed.

contingency fee

Fee collected if the attorney successfully represents the client. This is typically a certain percentage of the total amount awarded to the client. This type of fee must be in writing.

court-awarded fees

Fees given to the prevailing parties pursuant to certain federal and state statutes. Prevailing party must submit to the court accurate and detailed time records showing exactly how much time was spent on the case.

overhead

General administrative costs of doing business, including rent, utilities, phone, and salary costs for administrators who manage the business and others.

pro bono work

Legal services that are free of charge to a client who is not able to pay for the services. Typically used to generate goodwill within the community.

earned retainer

Money the law office or the attorney has earned and is entitled to deposit in the office's or attorney's own bank.

unearned retainer

Monies paid upfront by the client as an advance against the attorney's future fees and expenses. Until the monies are actually earned by the law office, they belong to the client.

leveraging

The process of earning a profit from legal services that are provided by law office personnell (usually partners or associates, and legal assistants).Allows a firm to cover attorney or paralegal time plus overhead costs.

billing

The process of issuing invoices for the purposes of collecting monies for legal services performed and being reimbursed for expenses.

timekeeping

The process of tracking time for the purpose of billing clients

criminal fraud

A false representation of a present or past fact made by a defendant.

hourly rate fee

A fee for legal services that is billed to the client by the hour at an agreed upon rate.

case retainer

A fee that is billed at the beginning of a matter, is not refundable to the client, and is usually paid at the beginning of the case as an incentive for the office to take the case. Common in criminal matters as an incentive for the attorney to take the case.

pure retainer

A fee that obligates the office to be available to represent the client throughout the agreed upon time period. This also precludes the attorney from any adverse representation against the client.

prepaid legal services

A plan that a person can purchase that entitles the person to receive legal services either free or at a greatly reduced rate.

time sheet or time slip

A record of detailed information about the legal services professionals provide to each client. Must contain name of the case, date the service was provided, and a description of the service.

aged accounts receivable report

A report showing all cases that have outstanding balances due and how long these balances are past due.

timekeeper productivity report

A report showing how much billable and non-billable time is being spent by each timekeeper. Helps identify which timekeepers are the most diligent in their work.

case type productivity report

A report showing which types of cases are the most profitable. This will help management determine which areas generate most income and determine which areas to concentrate on.

pre-billing report

A rough draft version of billings.

trust or escrow account

A separate bank account, apart form a law firm's or attorney's operating checking account, where unearned client funds are deposited.

value billing

A type of fee agreement that is based not on the time spent to perform the work but on the basis of the perceived value of the services to the client.

management reports

Reports used to help management analyze whether the office is operating in an efficient and effective manner. Can be used to track problems an office may be experiencing and help devise ways to correct the problem.

retainer for general representation

Retainer typically used when a client such as a corporation or entity requires continuing legal services throughout the year.

non-billable time

Time that cannot be diractly billed to a client. Three types are: (1) general firm activities; (2) personal time; and (3) pro bono work.

cash advance

Unearned monies that are the advance against the attorney's future fees and expenses.

outside counsel

When a corporate and government law practices contract with law offices (outside of the corporation) to help them with legal matters, such as litigation, specialized contracts, and so forth.

flat fee

a fee for legal services that is billed as a flat or fixed amount.