There are many reasons why a law firm may change software. The most common situation is a vendor’s release of a new version and firms decide to upgrade. Sometimes, a change in hardware necessitates a change in the firm’s software. Also, a change in personnel can be the impetus for change if the new staff has different skills and experience from their predecessors. Changing firms or employment situations can result in some of the most dramatic changes. Regardless of the reasons, careful planning and preparation, coupled with realistic expectations, can result in a smoother transition.

I worked recently with two new sole practitioners who had been of counsel to a larger firm for many years. Their former firm provided many services including a secretary who entered their time records into the billing system and prepared their documents and bills. Both lawyers recently became subtenants of one of my clients. I was asked to assist them implement their new billing program.

The first issue was their expectations about when to send their first bills. The attorneys moved into their suite in early June. I met with them to discuss their specific billing requirements and order billing software. Luckily, most of their client names and addresses were in Outlook, so we could import that as the billing program contact list.

While both attorneys commented that their billing practices and requirements were identical - they both billed by the hour and billed clients monthly - there were many more substantive differences between their practices than they realized or acknowledged. For example, one attorney had a single billing rate; his colleague had five different rates and wanted specific messages about his discounted rates on the bills.

There were some major differences in their bill layouts, both in the information to be included and the format. One generally had two matters for each client and wanted them consolidated with a recap of the total amount owed as part of the bill. The other attorney generally had a single matter for each client but insisted on including a cover letter with each bill. By now, it’s apparent they weren’t as identical as they thought!

Before they could send their first bills, we had to enter previous balances. Both attorneys could have saved much time and effort if they had anticipated this step. In one case, an assistant unnecessarily entered many matters and balances for work the attorney intended to write off. Being a cash based business, there’s no reason to carry open balances, then write them off.

It’s much more important to get the balances owed from clients who will pay their bills into the system. Ironically, the same attorney thought his assistant could save time by starting with balances after payments recently received rather than the balances owed when he began his new venture. As I explained, if we didn’t start with the old firm’s balances, the money he received between the old firm and new would not be entered and could be easily omitted at the end of the year when calculating his year’s income.

Once the balances were entered, there still was the task of entering the first month’s time, expenses and payments. At long last, we were able to generate the initial set of bills for each attorney. Subsequent months will be much easier.

Formatting issues

The other major issue was the lawyers’ expectation that their new billing program would produce exactly the same bill format as their former firm’s system. I seem to encounter this issue regularly, whether in the context of a conversion or an upgrade. It never ceases to amaze me how many attorneys get bogged down on the tiniest formatting details of their bill but either lose interest or refuse to invest the time to review the substantive content of those bills. They agonize over where dates, lines and labels will appear while neglecting to review pre-bills that include such important details as each timekeeper’s billing rate and descriptions of their time.

I often point out that clients rarely refuse to pay bills, even if they don’t like the phrase that accompanies the current total due. While billing systems allow us to create custom designs, it’s too easy to fall into the trap of spending too long on a bill, personalized envelope or cover letter that may not even be seen by the client. Each billing product has quirks that make it difficult to match another layout. Focus on designing a bill that’s clear so clients can understand what services have been rendered and what charges are due.

Lawyers rarely realize their bills are one of the most important pieces of communication with clients. Sending bills monthly is a good way of regularly letting clients know what work has been done on their behalf. Well worded time descriptions that explain what services have been rendered is much more important than whether the bill uses the term “invoice number” or “bill number.”

Timing

When starting a new firm, there’s not much control over timing. You can, however, take steps to give yourself sufficient time to get a new systems set up before expecting to send the first bills. These two lawyers knew several months before contacting me they would become solos. Had they begun the process earlier, their first bills could have gone out sooner and with much less stress. They also could have taken the time to consider additional changes to streamline their billing procedures. For example, they might have been able to identify which clients would prefer bills by e-mail rather than paper. They also could have considered consolidating some rate levels to make tracking and managing them simpler. Additional time also would have allowed them to create a client matter numbering system rather than merely continuing the numbers used at their prior firm.

When upgrading or converting a billing system, there’s more control over the timetable. Ideally, you should bill as much work in process as possible pre-conversion so you don’t have an immediate need to produce bills in either a brand-new version or a totally new product. Upgrades are a good time to ensure your firm is using the product to its fullest potential. If you regularly take information from the billing program and massage it in a spreadsheet, you should determine whether the new version can prepare the needed information directly. It’s been my experience that billing system vendors often add new functions or features in direct response to customer requests. Where earlier versions may have required complicated workarounds, later versions will resolve and simplify those issues.

Often, when staff turns over, they’re trained by their predecessor. While this can save time and money, incorrect steps and information can be passed from one employee to the next. I’ve worked with several firms recently where we determined the previous billing person completely misunderstood some aspect of the program and, as a result, taught their successor incorrect procedures. In some cases, such omissions or errors were costly in that posting procedures hadn’t been done correctly and client balances were wrong.

Converting billing systems can be traumatic. Out goes something familiar, in comes something new and different. Careful evaluation and selection of the replacement product can ensure important functions and reports are not lost in the transition. I’ve seen many firms assume their colleague’s billing needs are similar to theirs, only to find some aspect of their billing, such as how the lawyers are compensated for work performed or fees collected is dramatically different. I’ve also seen too many firms assume that popular billing programs all will do the same thing the same way, only to discover the reports available are not the same and cannot be used to assess the firm’s data the same way. Carefully consider how you evaluate your lawyers work when considering converting from one billing system to another.

Regardless of the reasons for a change, careful selection and planning  and reasonable expectations  go a long way toward ensuring a smooth transition.

Carol L. Schlein is president of Law Office Systems in Montclair, a training and consulting firm specializing in law firm automation. Copies of her previous columns are on losinc.com, which also lists upcoming meetings and training classes. For information, e-mail info@losinc.com or check the website. Schlein formerly chaired the Computer and Technology Division of the ABA Law Practice Management Section and can be reached at carol@losinc.com.

Questions for Carol L. Schlein on law office technology may be e-mailed to New Jersey Lawyer at news@njlnews.com or faxed to (908) 226-0165.