|Oregon State Bar Bulletin — DECEMBER 2008|
Billing and accounting software for law firms can run the gamut from a full-fledged accounting system that gives all of the reporting and functionality of an accounting practice to a simple program that keeps track of time. Understanding your firm’s financial management needs and software budget will greatly simplify the shopping process. This column describes the basic types of application programs available, the standard features you can expect, and some optional features or modules to consider. It then compares the features and pricing of some of the most common software packages on the market today.
Keeping track of time is often the bane of an attorney’s existence. Although time-tracking software does not eliminate what can sometimes feel like an onerous obligation, it automates part of the process, relieving some of the practitioner’s burden. Such software generally also tracks expenses in addition to time, and off-the-shelf models start at less than $100.
Time entries are entered directly into the timekeeping applications via entry screens that list client or matter name, type of activity or expense, start and end date of the work, description of the work, amount of time worked, and rate for the work. Billing codes may be preset to include items that are common to general law practices. Another feature is pop-up timers for measuring the actual time spent on a particular task. Time entries also may be downloaded into the software via links or import processes from legal case management systems. Online and personal digital assistant (PDA) time entry also is quite popular.
Time-tracking software that stands alone is usually less expensive than more comprehensive systems. More commonly, however, it is a part of time and billing software.
Time and Billing
Billing is arguably the most important management process in a law office. Good billing software is very flexible and can cost anywhere from just over $100 to as much as $750 per license. Good applications include pre-billing features and the ability to undo and reprint billing statements, along with various formats for displaying and transmitting bills (e.g., PDF, HTML, or RTF). Tracking accounts receivable for client matters is also a standard feature in billing software. In addition, most systems allow generation of reports on items such as productivity, work in progress, profitability, and accounts receivable. The better applications also have overview or recap screens that display all billing and receivable information for a client matter in one place.
Billing software is useful for tracking client funds or trust accounts and can be set to pay off client bills automatically. The software records payments and other transactions, and some systems even allow users to generate and track deposit slips for operating and trust accounts. Most programs will generate an income report broken out into fees, costs and interest.
Billing software can keep track of money transactions for client matters, but this generally is limited to simply tracking time and expenses and then generating bills for these. The systems usually do not perform general ledger accounting or check writing, as does integrated general ledger accounting software.
Integrated General Ledger Accounting
Full general ledger accounting systems for law firms start at about $500 per license. These programs differ from general business accounting packages because they consider trust accounts as short-term liabilities when calculating the profitability of the firm and can incorporate trust activity with actual billings. Not all law firms handle accounting in-house, retaining outside accountants or bookkeepers to handle account reconciliation, statement generation, taxes and other advanced financial management tasks. Using a general business program generally means the firm will have to customize the application to fit its needs. For instance, many general programs will generate service invoices, but not the type of professional statements usually used by law firms. Customizing the software can be burdensome, especially if not done when the software is first implemented. Legal-specific products are usually more practical for most firms.
General ledger accounting programs usually come with a chart of accounts; the legal accounts make for easy monitoring of income and expenses for the firm. Like billing software, billing functionality also is built into general ledger accounting applications, so instead of tracking money activity only for clients, they also track money activity for the firm. Monthly reconciliation is automated, and it is simple to generate not only bills but also general ledger statements showing firm profit and loss and overall worth. Check writing is another standard feature in general ledger software but usually is not found in stand-alone time and billing applications.
With advanced reporting for accounts payable and electronic billing, firms can use software with more client information management features like calendaring and contact management. Larger firms may prefer systems that are truly integrated with full practice management, so that payroll, accounts payable, cost recovery and online time entry and accounting are included. Unfortunately, the cost of such systems can be steep. Small firms usually can add these features by buying specific modules, at $125 to $500 per module.
Quick Software Comparison
Billing Matters from LexisNexis (www.timematters.com) is a time tracking and billing program. It is purchased in conjunction with Time Matters, and the newest version (v 9.0) includes a full accounting general ledger and trust account package. The Professional Edition costs $600 for the first user and $350 for each additional user. The Enterprise Edition (for large offices with large volumes of data) is priced at $1,200 for the first user and $700 for each additional user. Annual maintenance plans are available for an additional cost.
BSA Pro by SeaBILL (www.seabill.com) is a time tracking and billing program that also tracks trust account funds by client. Additional modules for the Palm operating system and a link with QuickBooks® are available. The Silver Edition (up to two timekeepers) costs $299; the Gold Edition (up to 10 timekeepers) costs $399; and the Platinum Edition (up to 20 timekeepers) costs $499. A free download demonstration program is also available to test drive the program.
DLS 8 (Dapix Legal Software) by Dapix, Inc. (http://dlssupport.com/index.htm) combines time tracking, billing, general ledger accounting, accounts payable (in a module), payroll (in a module) and check-writing functions. The Personal Edition license is priced at $499 for the first user and $79 for each additional user. The Professional Edition license costs $799 for the first user and $99 for each additional user. Pricing for the modules varies. You can download a free demo version at the website.
Juris from Juris, Inc. (www.juris.com), recently purchased by LexisNexis, combines time tracking, billing, general ledger accounting, accounts payable, payroll and check-writing functions, and it comes with modules for the Palm and Pocket PC operating systems. Current pricing information was not available at this time.
PCLaw from LexisNexis (http://law.lexisnexis.com/pclaw) combines time tracking, billing, general ledger accounting, accounts payable (in a module), payroll (in a module), and check-writing functions, and it comes with modules for the Palm and Pocket PC operating systems. The cost is $400 for the first user and $300 for each additional user. The program may be purchased in conjunction with Time Matters, and a yearly maintenance plan is also offered.
Rocket Matter (www.rocketmatter.com) is a web-based case management program that can be accessed anywhere via the Internet. It is a comprehensive time and billing system with a complete reporting function, together with case management, contact management, calendaring, expense tracking, accounting, conflict checking and messaging. The price is $50 per month per attorney and $15 per month per support staff.
RTG Bills by RTG Data Systems (www.rtgsoftware.com) is a time tracking and billing program that offers a PDA module. It costs $95 per license and $15 per additional timekeeper. It is simple and easy to use, and support is free. You can download a free 45-day trial from the website.
TABS3 by Software Technology, Inc. (www.tabs3.com) combines time tracking, billing, general ledger accounting (in a module), accounts payable (in a module), payroll (in a module) and check-writing functions, and it comes with a module for the Palm operating system. It also includes a free copy of PracticeMaster Basic, the company’s case management system. Cost for a single user version is $295 (two timekeepers) up to $1,995 (39 timekeepers). The cost for a multi-user version is $495 (two timekeepers) up to $3,994 (39 timekeepers).
Timeslips by Sage (www.timeslips.com) is a comprehensive time tracking and billing program that links with QuickBooks and Peachtree using the company’s TAL (Timeslips Accounting Link). The cost is $499 for a single user and $169 for each additional user. They also offer special five- and 10-station value packs, and you can download a demonstration program.
ABOUT THE AUTHOR
The author is a practice management advisor at the OSB Professional Liability Fund.