Small & Home Office
Tips on How You Can Select the Right Time-and-Billing System For Your Small Law Firm
The decision to select a new billing system is an investment in both the product and the vendor.
By Dan Berlin
YOU SURVIVED the Y2K scare, the entries you made in your billing system this year actually appear after your 1999 entries and not before. Congratulations!
However, if this isn't the case; or you still consider your current billing system to be "almost adequate," but you want and need more features; then it's time to move on.
The number one reason small firms hesitate to choose a new billing system is cost. You should be concerned about the cost! It's your firm and your money. Many factors need to be considered when evaluating the true cost of software:
First, there's the price of the product itself. But selecting a new billing system goes beyond the decision to spend a few hundred or even a few thousand dollars on the product itself. It's the overall cost of switching systems that makes this decision easy to put off.
In addition to the price, there is the time and cost of re-training; the cost of converting your data; and the disruption of being without a system during the conversion. Maybe an upgrade of a workstation or two is required. A new operating system or even a new network might necessary. What about the compatibility of the new system with other software your firm is currently using or considering? What is the quality and cost of service provided by the vendor? Does this sound familiar?
Here are some guidelines to help you evaluate the best system for you.
There are three basic approaches taken by vendors who develop legal billing software for solos and small firms.
1 Billing only: A legal billing system mainly includes client, fee, cost and payment entry, statement generation, trust accounting, accounts receivable tracking and reporting, and some management reporting. These vendors provide you with the option of integrating their billing system with accounting and case management systems from other vendors.
This offers the flexibility of working with your current accounting or case management system. It also provides you with several options when selecting an accounting or case management system to integrate with the billing system.
Make sure that the level and quality of integration provided will meet your needs. Is there just an interface, or do the systems truly integrate with each other?
Always check to see how the support of integrated systems from different vendors will be handled. The potential of a "pass the buck" syndrome between vendors with support issues concerning integration is not uncommon and can be very time consuming and frustrating.
2 All-in-one: These systems provide more than just billing. They include accounting functions such as general ledger, accounts payable and check writing.
The obvious benefit is that you have one system from the same company that can handle your firm's billing and accounting needs.
Some of these companies also provide case management software. Those that don't usually offer some level of integration with another company's system. However, the flexibility to work with other companies' accounting systems may not exist. And if all you want is a billing system, you still have to purchase the entire package.
3 Multiple systems: The third approach is to select a company that provides multiple systems, including billing, general ledger, accounts payable and case management.
This lets you purchase only the systems you want or need, and lets you add the others as you need them. The benefits: you can automate or add modules at your own pace. When you integrate the modules, they communicate and work as one system because they were designed to do so from the start. The interface is similar because they are all from the same company. Plus, integration is tight and support on all of the software comes from the same vendor. However, the option to integrate with another company's accounting or case management software may not be available. This will vary by vendor and will need to be researched.
Once you have decided which approach fits you best, you need to start looking at specific features. All of the top companies have satisfied users and the products all provide the basic features and reports. Be sure you get features currently lacking in your existing system, as well as those you like and use. Make sure it can write-up, write-down and write off, with proper reporting since we all make mistakes and correcting them in software can sometimes be extremely difficult and time consuming.
Check how it handles editing of transactions at both the client and timekeeper level. How difficult is it to transfer fee, cost and payment entries that were entered to the wrong matter or client? Make sure you can reprint, edit or reverse any client's bill at any time. Easy access to all entries, billed or unbilled, is also a must.
Make sure the reporting will handle what you need. Most systems will provide you with more reports than you will ever look at, but that's okay. Just make sure you don't have to print them in order to process a statement or close out a month or year.
Also, the billing system should not limit you to only its reports. Be sure a report writer is available and that the system is ODBC compliant, allowing you access to the system's data to generate your own reports if the need should arise.
In addition to the system and its features, I recommend asking the vendor the following questions:
Do you have references I can contact?
Can local staff offer demonstrations, and help with installation, training and support?
Are data conversion services available? What are the costs?
What is the normal time frame for doing a conversion?
Have firms converted from my current system to yours in the past? If so, may I contact them?
What is the current version of the software and when was it released? What was included in the last release? When is the next release expected?
What kind of annual fees are required to receive technical support, updates and new releases?
How is technical support provided (i.e., telephone, e-mail, internet, fax)? What is the cost for each?
Can the system handle the needs of a growing firm?
What are the hardware and operating system requirements for the software?
Take Your Time
The decision to select a new billing system should not be done overnight. It is not simply a purchase decision, it is a decision to invest in both the product and the vendor.
Look beyond the product name and its advertised features. Think of it as buying a new vehicle. You should like how it looks. It should be easy to operate and have all the features you're looking for.
Look under the hood to make sure it has the power you need. Talk to other owners. Even take it for a test drive.
Make sure the system you choose is well built and a solidly engineered vehicle that will carry your firm into the future.