The Billing Bottleneck: 10 Questions to Ask Before Outsourcing Your Law Firm’s Invoicing

For many law firms, the end of the month is a time of dread. It marks the start of the "billing marathon"—chasing down attorneys for time entries, formatting invoices, and navigating the complex requirements of e-billing.

At Legal Back Office, we want to support you in your quest to find the perfect outsourced vendor. Invoicing is the lifeblood of your firm’s cash flow, but it shouldn't be a full-time job for your legal team. Outsourcing your billing can recover hours of billable time, but you need a partner who understands the high stakes of legal invoicing.

Before you hand over the keys to your revenue cycle, ask these 10 essential questions.

1. What experience do you have billing for law firms specifically?

Legal billing is a specialized skill. You need to know if they are comfortable managing your specific fee structures, whether that’s hourly billing, flat fees, or contingency-based arrangements. Each requires a different level of tracking and reporting.

2. How do you ensure time entries are complete, compliant, and ready to bill?

One of the biggest causes of revenue loss is "leaked" time—billable hours that never make it onto an invoice. Ask how they audit time entries for missing details or non-compliance with client billing guidelines before the invoice is even generated.

3. What is your process for pre-bill review and attorney approvals?

The "Draft" stage is where most billing processes stall. A good partner should have a streamlined workflow/standard operating procedure for sending pre-bills to attorneys, collecting edits, and getting final approval without a mountain of back-and-forth emails.

4. How do you handle LEDES or e-billing requirements?

If you work with insurance companies or large corporate clients, you likely deal with LEDES (Legal Electronic Data Exchange Standard) files. These have strict formatting rules. If your provider isn't expert in e-billing portals, your invoices will be rejected, delaying your payment.

5. What systems do you support for billing and invoicing?

Your billing partner should be tech-agnostic or an expert in the tools you already use. Common systems include:

• Legal PM: Clio, MyCase, Smokeball, or PracticePanther

• Specialized Billing: LEDES-compliant platforms or TimeSolv

6. How do you manage billing cycles and deadlines?

Consistency is the key to healthy cash flow. Ask for their specific timeline: When are time entries due? When are pre-bills sent? When is the final "push" to get invoices out the door?

7. How do you handle write-offs and courtesy discounts?

Write-offs can provide valuable data about your firm’s efficiency. Your partner should have a clear system for recording why a write-off occurred so you can track realization rates and attorney performance.

8. What happens if an invoice is disputed or needs correction?

Errors happen, but in the legal world, they must be fixed instantly to maintain client trust. Ask about their turnaround time for "re-do" invoices and how they handle disputes from clients or third-party auditors.

9. How do you coordinate invoicing with AR tracking and collections?

An invoice is only successful if it gets paid. A comprehensive partner doesn't stop at "Sent." They should be able to tell you how they bridge the gap between sending an invoice and tracking Accounts Receivable (AR) to ensure no bill goes unpaid.

10. What visibility will we have into billed vs. unbilled time and WIP?

You shouldn't have to wait until the end of the month to know your firm's health. Ask about the dashboards or reports they provide for Work in Progress (WIP). You should be able to see at a glance what is waiting to be billed at any given moment.

The Bottom Line

Your invoicing process should be a silent, efficient engine in the background of your firm. By asking these questions, you can find a partner who doesn't just "send bills," but actively improves your firm's profitability and professional image.

If you are ready to streamline your revenue cycle and eliminate the "end-of-month scramble," reach out to Legal Back Office today to partner with us for your legal billing needs. At Legal Back Office, we specialize in the "heavy lifting" of legal billing—from LEDES formatting to pre-bill management—so you can focus on the law.