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What is Legal Billing Software?

Legal billing software is software that enables lawyers & law firms to keep a track of legal activities, legal consultation & payments received against their services. These systems offer capabilities like invoicing, time tracking & accounting.


Tracking or keeping a count of billable hours using paper-based methods, or spreadsheets can be very tedious & time-consuming. These methods also create an open room for lots of human errors. Even after calculating billable hours, you need to generate invoices, send them to clients, follow up for payments which can be a huge task manually. To simplify the entire work of a law firm, law firm billing software comes into play.

Law firm accounting software enables accurate tracking of billable hours that ensures a steady flow of revenue. When you’re running a law firm, the ultimate goal is to earn profits & manage your expenses, a legal billing software just makes it simple for you. Using dedicated legal billing software you can rest assured that all the billable time is billed and nothing is slipped through the cracks.

There are many different types of software that can streamline billing & time tracking for law firms.

Now let us discuss legal billing software in detail.

Functionality of Legal Billing Software

Legal billing software functionality can be categorized into three categories:

  1. Time tracking
  2. Bill preparation & Payment
  3. General Ledger

Time Tracking

Lawyer billing software is integrated with a calendar that allows you to create events, and automatically feed the count of billable hours. Sometimes a calendar can be used to fill the gaps in billable time. It lets you bill the client on multiple bases like hourly, flat fee, contingency, transactional, retainer fee, user-defined and split fee increments. The user can also define the billing rates by timekeeper level e.g., individual attorney, practice area type, partner, associate and client levels. These are primarily used by large law firms. Stopwatch timer is also a good feature of legal billing software. Users can set timers to track each minute of billable time. The user can also assign codes to the billable times. The codes may be established by the user or the bar association. Law firm billing software allows the users to track expenses associated with clients’ accounts. It also enables the system to report on gaps in your billable time.

Bill Preparation & Payment Facility

Law firm billing software automatically generates the invoices based on the billable time as recorded in the system. The invoices or commonly referred as bills can be sent to the client via email, in person or in Legal Electronic Data Exchange Standard (LEDES) format. You can also customize the invoices using predefined templates with your company logo, colors, address etc. as per the requirement. Another great feature of law firm accounting software is it automatically notifies the clients about the bill dues. It removes the need to call & meet in person to remind of the pending money. Some of the available software are designed so well that they even can calculate the late fees automatically & notify the client about the same. Sends automatic notices when clients’ retainer fees are getting low. A law firm accounting software also allows you to accept payment in multiple methods like credit cards, NEFT, payment gateways, debit cards etc.

General Ledger Functionality

You can keep a record of the client’s account balances. The software provides you with a provision to record invoices & payments and maintain account balance for all clients. Another very important feature of using a law firm accounting software is that it calculates all taxes & liabilities automatically based on the information fed in the system. It also enables you to file GST returns in a few clicks directly from the software. The system can automatically generate reports on information such as outstanding balances and client inactivity.

How to choose the best legal billing software?

The type of legal billing software you should choose will depend on what types of services you offer to your client. What are your specific needs as a buyer?

For example:

Solo Practitioner: If you are a solo practitioner & serve a small number of clients you will need the most basic legal accounting software with the basic time-tracking facility. Well you can always go for the advanced features but in this that will not be needed. You might not need an expensive setup.

Small Firms: Being a small owner you have to decide very carefully, whether to choose a stand-alone system or go for a practice management system. If you have special accounting or payment needs, you may need to invest in a more advanced solution.

Large Firms: Large firms will definitely need an expensive system with most advanced features for managing individual time keepers & clients. They will also need automation, as it won’t be easy to do everything manually on a large scale. To identify revenue opportunities, reporting features is also very important for large firms. If you have a large law firm, you will need a legal billing system that will include all facilities of a customer relationship management (crm) software, which is used for managing lots of clients.

Stand Alone vs Practice Management Legal Billing Software

Billing is most crucial to a law firm’s operation, there are a number of stand-alone solutions in the market. Stand-alone or basic legal billing software do just billing & basic accounting whereas time tracking & billing modules are integrated into an advanced billing software or practice management system. A practice management legal billing software is a single system that manages all areas of your law practice.


In case you need additional features like case management, document management or contact management in addition to billing & time tracking you definitely have a practice management system.


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