Alternative billing is quickly becoming a staple of the legal community. Over the last decade, attorneys have increasingly searched for ways to accommodate the financial needs of their clients while still providing quality legal services. From flat fee payment arrangements to approaching legal matters from a project management perspective, traditional hourly billing models no longer define the legal industry.
TimeSolv has been at the forefront of these billing evolutions, ensuring that their legal time tracking and billing system adequately meets changing billing needs. Now, the company is offering a new type of billing option – one that can greatly benefit some practice areas. Split billing allows attorneys to divide a single bill among various parties and therefore collect payment from each of them individually. While it may not be the type of arrangement that is widely relevant cross the industry, it is extremely valuable to certain areas of practice. In response, TimeSolv developed a quick and efficient method of split billing. It’s included in their standard service and they even offer training to help you and your staff quickly learn the ropes.
So, now that you know what split billing entails, you are probably wondering whether it is a right fit for your practice. To help with your contemplation, I spoke with a legal billing expert to identify some examples of when split billing may come in handy.
Lori Gonzalez is the co-founder of RayNa Corporation, which provides administrative work for attorneys and firms, including billing. Acknowledging the negative feelings that often accompany conversations about billing, Gonzalez jokes that her organization is perhaps the only self-professed legal biller in the world.
When I asked her about practice areas that could benefit from split billing, she provided some very useful input. “The one where I’ve seen it cause the most trouble is for anyone who does mediation and/ or arbitration,” Gonzalez explained. “The parties are splitting the cost of these services, so attorneys need an easy way to enter their time and split it between multiple parties.”
Gonzalez said that the billing for mediation services can be extremely challenging, especially when there are numerous parties. “I once saw a case with 42 parties involved. We used legacy products at one time and there wasn’t a split billing option. We would literally have to duplicate the entries and figure out how to split the time,” said Gonzalez. “Sometimes, we would have to send one bill, along with a cover letter that tells the client to only pay a percentage of the bill. I have seen a lot of ineffective ways to split a bill because split billing isn’t very common in the legal field. When you’re a mediator, you suddenly realize how few options there are.”
This is the problem that TimeSolv sought to address. Not only can you split a single bill between multiple clients (as many as necessary), but the system also allows you to customize the percentage that each party pays.
“I think many lawyers like the idea of being able to work themselves into a split billing arrangement without having to duplicate their entries,” said Gonzalez, who pointed to business law as another practice area that could benefit from split billing capabilities.
“From a business law standpoint, particularly with young and new entrepreneurs, I’m seeing a big push from law firms to come up with creative and different ways to bill clients that are affordable. For these businesses, lawyers are often a luxury you can’t afford until they are a requirement. Lawyers can help by splitting costs between small businesses and their vendors. They can also help them by splitting the costs of creating contractual agreements with other small businesses.”
Another business model that is ripe for split billing is a situation where a client comes in and says, “I need these services, but I need you to split the invoice where I personally pay 75% and my business advisory pays the remaining 25%?” For an attorney without split billing capabilities, this challenge might bring up nightmarish thoughts of bill manipulation for your law firm staff. But with TimeSolv, this request becomes an extremely doable service that you can provide your client with ease.
Family law is another potential practice area where split billing may prove beneficial. This is especially true when parties have agreed on all areas of contention but want an attorney to help make their wishes legally binding, which includes family matters like:
- Uncontested divorces
- Separation agreements
- Spousal support arrangements
- Uncontested custody and/or visitation arrangements
- Financial or property split agreements
“Split billing is useful for attorneys in preparation of documents where parties agree on all provisions,” said Gonzalez.
One other interesting scenario where split billing could prove useful is a situation where a parent is assisting in the cost of legal services for their son or daughter. For example, say your 21-year-old client is facing a theft charge. His dad agrees to pay for half of your representation costs, with your client paying for the other half. “The parents may offer to pay for the attorney’s fees, but the lawyer may want the son or daughter vested in the case as well,” Gonzalez explained.
Lastly, probate law is one other area where attorneys could benefit from split billing. “A probate lawyer may be representing an entire estate, or multiple heirs who are all paying a portion of the attorney’s fees,” said Gonzalez. “Probate law is filled with cases where one lawyer represents multiple parties.”
These are just a few examples where split billing can benefit legal practitioners. It is quite possible that as you think about specific matters within your practice area, you may come up with some additional options. Remember, to always consider your ethical responsibilities when representing multiple clients, but if you identify a case where split billing is appropriate, count on TImeSolv to simplify the process. With the most robust web-based split billing feature on the market, it is the billing system for your law office. Click here for a no-obligation free trial.
About Erika Winston:
Erika Winston is a freelance writer with a passion for law. Through her business, The Legal Writing Studio, she helps legal professionals deliver effective written messages. Erika is a regular contributor to TimeSolv and a variety of other publications.