Sample Paralegal Billing Entries and Best Practices

Maximizing your law firm's resources is vital to success, and utilizing paralegals can be a game-changer. But how do you effectively and ethically bill clients for paralegal work?

In this article, we'll explore the benefits of using paralegals in your firm and highlight the best practices for accurately billing clients for their services. From streamlining processes to improving cost management, learn how incorporating paralegal services can take your firm to the next level.

What paralegal services can you bill for?

Utilizing paralegals has become a staple in the legal industry, offering numerous benefits to legal professionals and their practices. Incorporating paralegal services into your practice can help you tackle more complex cases, better manage workloads, and provide clients with efficient and effective representation.

However, there are rules and regulations to help ensure clients are only billed for appropriate tasks completed by paralegals. Legal professionals must understand what paralegal work can be billed to clients and how to invoice for these services accurately.

Billable services

The paralegal performs a variety of tasks for lawyers. However, like attorneys, not all of their duties can be billed. Generally, paralegal time spent on administrative or clerical functions is not billable.

Paralegal services that can be billed for include:

• Document review and preparation
• Legal research
• Drafting legal documents
• Discovery and investigation work
• Case management
• Trial preparation
• Client communication and correspondence
• Record keeping and file organization
• Legal database searches
• Deposition and hearing support

ABA Model Guidelines for the Utilization of Paralegals outlines the general rules for billing for paralegal work. However, to ensure you fully understand the guidelines set forth by your local jurisdiction, you should consult with your local state bar rules.

What to charge

Paralegals are not lawyers. But experienced and qualified paralegals can complete substantive legal work on behalf of a supervising attorney at a much lower cost.

In 1989, the Supreme Court ruling on Missouri v. Jenkins established that law firms can bill clients for paralegal hours in accordance with the market rate, not what the paralegal is actually paid by the firm.

A paralegal's market rate is determined by several factors, including:

• Education: While a degree is required for all paralegals, some professionals will augment their knowledge by completing additional certifications specializing in one area.

• Experience performing this type and level of legal work: A highly trained paralegal with many years of experience can complete a legal task more efficiently than a brand new paralegal, so the rate should reflect that.

• Geography: The market rates for paralegal billing in the firm's geographical location.

Additionally, although paralegal hourly billing rates are not the same as paralegal hourly earnings, lawyers can use average hourly rates as a guide. The average paralegal hourly rate for a paralegal in the United States is $21.97.

A market rate calculation may seem complex, but several tools can help. Several national organizations, including the National Association of Legal Assistants (NALA), periodically survey paralegal market rates by law firm size and geographical region. It is likely, however, that the paralegal association in your area will have numbers that are even more relevant to your firm.

How does paralegal billing help firms?

Paralegal billing helps law firms by accurately tracking and billing for the time and services provided by paralegals. This allows for accurate invoicing of clients, improved cost management, and better utilization of paralegal resources. Effective paralegal billing also helps build client trust and positive client relationships.

There are several benefits of a law firm using paralegal services, including:

• Increased efficiency and productivity
• Improved cost management
• Enhanced case management and preparation
• Ability to handle a higher volume of cases
• Increased specialization and expertise
• Improved client satisfaction
• Better utilization of lawyer time and resources
• Access to technology and research tools

By utilizing the skills and expertise of paralegals, law firms can operate more effectively and efficiently, allowing them to provide better representation for their clients and stay ahead in a competitive market.

Best practices for paralegal billing entries

When it comes to documenting and billing for paralegal services, it's essential to have a system in place that accurately tracks and invoices clients for the work performed. Following best practices for documenting and billing paralegal services can improve cost management, build client trust, and ensure the success of your legal practice.

Bill consistently

Make sure to send your invoices within one month of performing services. Clients are more likely to pay a bill if it is delivered quickly when the services are still fresh in their minds.

Use legal billing software

Legal billing software can help law firms improve the accuracy, efficiency, transparency, and security of their billing processes, which can ultimately build stronger relationships with clients and improve financial performance.

LawPay is a payment service specifically designed for lawyers and law firms. The robust online payment and billing software provides a range of features to streamline your payment and billing processes and improve cash flow. These features include:

Credit card processing: Accept credit card payments from clients, including Visa, Mastercard, and American Express.

Electronic check processing: Accept electronic check payments from clients, which can be a convenient and secure alternative to paper checks.

Automated billing: LawPay's Quick Bill feature allows you to set up automatic billing for recurring payments, such as retainer fees or monthly payments.

Customized invoicing: Create customized invoices that reflect your law firm's branding and include detailed descriptions of the services provided.

Online payment portal: LawPay provides an online payment portal that allows clients to securely make payments online.

Mobile app: Manage your payments and invoicing on the go.

Security: LawPay uses advanced security measures to protect your and your clients' personal and financial information.

Be detailed

Ensure that your descriptions are clear and concise. There must be a clear understanding of what the client is being charged for. Otherwise, you will spend more time explaining than generating the bill. However, long and jargon-heavy explanations can overwhelm clients. Keep the language simple and trim overlong descriptions to the essentials.

Optimize your workflow

Paralegals work under the supervision of attorneys, so paralegal billing should abide by the same accuracy, clarity, and professionalism standards.

It is also important for law firms to distinguish between billable and non-billable paralegal work. Paralegals wear many hats and play numerous critical roles at a law firm. But only substantive legal work that a lawyer would otherwise complete should be billed. Billable paralegal work must also meet the guidelines for billable paralegal work in your area.

If you haven't yet optimized your firm's billing workflow, it would be a good idea to assess how your current process is working and where you can make changes to ensure efficiency and security.

Sample paralegal billing entries

Now, let's take a look at the good, the bad, and the ugly of paralegal billing entries.

As an aside, paralegals' hourly billing must be logged accurately. To quickly track and calculate hours without under-reporting or padding time, lawyers (and paralegals) bill in standard time increments. Most lawyers bill by 1/10th of an hour (or six-minute) increments. Using a billable hours chart, you can easily reference how much you are owed for each increment of work.

Review the following billing entry chart as an example of how to log time worked by a paralegal, and what to avoid.

Example of a correct paralegal billing entry

DATE	CLIENT NAME	CLIENT No.	DESCRIPTION OF MATTER	HOURS
1/31/2022	Doe, Jane	10-045.001	Researched in the law library for forms upon which to base client complaints. Found usable examples in Am. Jur. PDF and West’s Legal Form.	1.8
2/4/2022	Doe, Jane	10-045.001	Began drafting the Complaint. Also used elements from forms found on WestLaw. Finished the First Cause of Action regarding negligence.	0.6
2/6/2022	Doe, Jane	10-045.001	Finished drafting the client’s Summons and Complaint, including the second cause of action covering negligence per se.	1.4

This billing entry example follows all of the best practices for logging paralegal work. Note how the example:

• Accounts for each instance when work is performed for the client
• Thoroughly describes the work performed in simple language that can be easily understood or explained to the client
• Accurately accounts for all time, even smaller amounts

Now, let’s look at what not to do.

Example of an incorrect billing entry

DATE	CLIENT NAME	CLIENT No.	DESCRIPTION OF MATTER	HOURS
2/4/2022	Doe, Jane		Researched for the client	3.5
2/4/2022	Jane Doe	10-045.001	Created summons and complaint and revised	4.2

This billing entry example ignores several best practices for logging paralegal work. Note how the example:

• Only shows work on a single day, which is not likely. Keep track of all time you work on a client case, even if it’s just a few minutes.
• Lists the client name in two different formats. Maintain organization and professionalism by following procedural instructions consistently.
• Generalizes the description of the matter. You want to provide thorough details of all work being done.
• Lumps hours worked into one large sum. Each time you work on the matter, you should create a new line and log the work individually.

Of course, not all law firms use billable hours exclusively. Firms that price their legal services using an alternative billing structure may consider their paralegal's work time when setting those fees. These alternative fee arrangements include fixed or flat fees, contingency arrangements, retainers, sliding scale, or subscriptions. You will need to ensure that paralegals' method for logging hours worked is also accurately tracked and reported in these cases per the processes you've outlined in your firm.

Final Notes

While paralegal billing has many advantages, it's always important to know the rules for what a paralegal can and cannot bill for in your jurisdiction. Paralegals can be a cost-effective way to serve legal clients better if you learn and abide by those rules.

If you are looking for other ways to increase efficiency and boost revenue for your firm, we invite you to learn more about LawPay's legal billing solutions.