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Tips for Selecting Legal Billing Software That Fits Your Firm’s Needs

February 07, 2025

By Sharon Miki

Managing a large law firm involves many complex tasks, particularly billing. Legal billing software simplifies essential functions like tracking billable hours, creating invoices, and managing payment collections. It's crucial to save time, help ensure compliant billing processes, and boost profitability when handling multiple clients and cases.

Here you’ll learn how to choose the appropriate legal billing software for your large firm by exploring the benefits and looking for key features.

What is legal billing software? Legal billing software helps law firms manage the multifaceted process of billing legal clients more effectively and efficiently. This type of software streamlines and assists with billing and collections tasks like tracking time, invoicing, reviewing bills, complying with trust accounting, processing payments, financial reporting, and more.

The following are features to look for:

• Time and expense tracking: Help ensure accurate tracking of billable hours and expenses without the need for spreadsheets or third-party apps.

• Invoice creation and sharing: Generate clear invoices for different billing types (e.g., split bills) and send them securely.

• Payment processing: Offer flexible payment options, including online payments.

• Flexible billing: Provide support for various billing arrangements.

• Trust accounting: Simplify trust and IOLTA account management.

• Reporting: Track financial performance with billing and financial reports.

• Accounting integration: Sync transactions with accounting software to reduce manual errors.

• Integration: Connect billing software with practice management and accounting tools for smooth workflows.

• Security: Protecting client data is crucial. Ensure the software has robust security features, complies with industry standards — such as General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act (HIPAA) Security Rule, System and Organization Controls (SOC) 2, and Payment Card Industry Data Security Standard (PCI DSS) — and prioritizes data protection.

Here are some benefits of legal billing software to consider:

• Efficiency: Automates time tracking, invoicing, and payment collection, saving time and boosting productivity.

• Accuracy: Reduces manual errors in billing and expense tracking.

• Cash flow: Streamlines billing and payment options, speeding up collections and improving revenue.

• Compliance: Simplifies complex processes like LEDES billing and trust accounting, helping to ensure legal and ethical compliance.

• Reporting: Provides detailed financial reports to track performance and support better decision making.

• Client experience: Sends clear, timely invoices, enhancing transparency and improving client satisfaction.

• Mobile capabilities: Mobile functionality is key for flexible, efficient billing. Solutions like Clio's mobile app allow time tracking and billing from anywhere, boosting productivity for remote or on-the-go work.

When budgeting for legal billing software, keep in mind these cost considerations:

• Tiered pricing: Choose a plan that fits your large firm's needs and budget based on feature tiers.

• Subscription fees and contracts: Check if you're locked into a long-term contract.

• Monthly vs. annual pricing: Look for discounts on annual subscriptions.

• Integration fees: Factor in costs for integrating with other software.

• Onboarding and training costs: Consider setup or training fees.

• Additional fees: Watch for hidden costs like extra storage or features.

• Return on investment (ROI): Evaluate potential cost savings and efficiency gains as part of your ROI.

Before selecting your billing software, follow these tips:

1. Assess your firm's needs: Identify the specific billing tasks causing issues and choose software that addresses them without unnecessary features.

2. Prioritize scalability: Ensure the software can grow with your firm as more clients and cases are added.

3. Stick to your budget: Select software that fits within your budget, considering free trials and the option to upgrade as needed.

4. Billing software or all-in-one solution? Decide if you need standalone billing software or an all-in-one practice management platform, and check for integration with existing tools.

5. Look for product innovation: Choose a solution with a strong track record of updates and improvements, especially in advancements for AI for lawyers.

6. Check integrations: Ensure the software integrates with your current tech stack, including accounting and other essential tools.

7. Evaluate customer support: Research the provider's customer support and training resources for smooth onboarding and troubleshooting.

In addition, consider the impact of AI on legal billing software. AI is transforming legal billing by streamlining processes and improving workflows. AI tools like Clio Duo automate invoice reviews to catch errors and provide detailed analytics for reporting.

Legal billing can be complex for large firms, but the right software simplifies workflows, boosts efficiency, and can ensure secure, accurate billing. By assessing your firm’s needs and exploring options like Clio, which offers a comprehensive, user-friendly solution, you can find the best fit.

Freelance writer and editor Sharon Miki writes about legal technology and the business of law for Clio.