Seven ways law firms charge for work.

The main legal billing methods are hourly billing, flat or fixed fees, contingency fees, retainers (fixed or evergreen), hybrid arrangements that combine a base fee with hourly work, and pro bono work that is recorded but not charged. Most firms use more than one, choosing per matter based on how predictable the work is and how the client wants to pay.

Each method changes what the firm has to track. Hourly billing depends on complete time records and a clear rate. A flat fee depends on a precise scope. A contingency fee depends on recording the recovery and the agreed percentage. A retainer held in trust depends on accurate client ledgers and on moving money to operating only when it is earned.

In LawAOS the fee arrangement is set on each matter, and all seven arrangements in this guide are supported. Invoices are built from the matter's unbilled approved time, expenses, the firm's service catalog or manual lines, so the method chosen at intake carries through to the bill.

Start with predictability. Where the steps and effort are well known, such as an uncontested filing or a standard incorporation, a flat fee is easy to quote and easy for the client to accept. Where the work depends on the other side, such as litigation, hourly billing or a hybrid spreads the risk more fairly.

Then consider the client's cash position. Clients who cannot pay as work proceeds may be offered a contingency arrangement where the rules of your jurisdiction allow it for that matter type. Clients with ongoing needs often suit an evergreen retainer that is topped up as it is drawn down.

Finally, check what your regulator requires. Many jurisdictions restrict contingency fees in some practice areas, require written fee agreements, or set rules for how advance fees are held. This guide is general information and not legal advice; check your own regulator's current rules before you adopt or change a fee arrangement.

Recording time days later.

Time reconstructed at the end of the week is usually lower than the time spent. A running timer or same-day entry keeps hourly and hybrid matters accurate.

Quoting a flat fee without a written scope.

When the scope is vague, extra work becomes a dispute. Write down what the fee covers, what it excludes, and how out-of-scope work is charged.

Treating retainer money as earned on receipt.

Advance fees held for a client usually stay client money until they are earned. Move them from trust to operating only against an invoice or a documented drawdown.

Never measuring realization.

If write-downs are not recorded at pre-bill review, the firm cannot see which matters or fee types lose money. Record the write-down and the reason each time.

Firms searching for a customizable billing rules engine usually want three things: a fee arrangement per matter, a predictable rate for each time entry, and a rounding rule applied the same way every time. In LawAOS the rate on a time entry is the matter rate, otherwise the timekeeper's hourly rate, otherwise a manually entered rate, and optional 6-minute rounding can be switched on.

Fee milestones can be recorded against a matter, and pre-bill review lets a reviewer write entries down with the adjustment kept for realization reporting. Rate cards per client or per activity are not available, so firms that price that way should test their rate structure in a trial before committing.