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Billing Rates in Clio

Join us in learning how to set and edit billing rates in Clio.
Billing Rates in Clio
Written by
Paul W Carlson, CPA
Published on
Dec 8, 2023

Learn about setting up hourly billing rates in Clio software.

Hi, this is Paul Carlson, CPA with Law Firm Velocity. In this video, we're looking at how we like to set up hourly billing rates within Clio. Clio has a bunch of different ways to enter rates and track rates on a matter. This process is what we find works best for growing law firms.

So the starting point, typical hourly fee agreement usually lists hourly rates by employee type, and so we want to model this or copy the same pattern within Clio so that when we hire a new associate attorney and we identify them as an associate, that any matters they touch, they will bill at $300 an hour. So the first step within Clio is we define groups based on those employee types on the fee agreement. So here we have partner, associate attorney, and legal assistant. Under partner, we have partner A and partner B. It truncates if we click into that point.

So at this point, and I'm using fictional names, so this would be real employee names under this list. So with the groups in place and the employees set up, when we go to create a matter and we go matter, new matter, identify the client, and we scroll way to the bottom, we do hourly rates and we add a custom rate. So we want the rates to be by group members. So we said partners billed at $400 an hour. We have associate attorneys at $300 an hour, and we have legal assistants at $150 an hour. Scroll down, legal assistant, $150 an hour. All right, so with this setup, the firm can hire three new associate attorneys. We identify them as associates within Clio, and they automatically bill into matters at their associate attorney rate.

Let’s talk about a couple exceptions or why this kind of works the way it does. So we will talk to new firms and they will say that these are the firm's fees and they will always be fixed and we're going to charge you the same fees to everyone. Well, two months later, they have a client who played let's make a deal with them, and so now the rates have been reduced and we need the flexibility to be able to have different rates for this one matter. And so in this case, we would just enter these different rates into this matter. So we're covered there.

The other place we see the difference is this is for 2017,2018, we're going to raise rates. If the rates are defined globally across the entire system, that once we change these rates, everyone gets the new rates under a global rate structure. Well, what happens is most state bars require that you notify clients in writing of any fee changes, and there's always a couple clients that they don't want to raise the fees or they don't want to send a letter and they don't want to have the hassle. So in this case, you would leave the old fees in place for the clients that aren't getting the raise and we would go back and edit other clients through the new fees. Honestly, typically when rates go up, we usually see that existing clients keep the old rates and new clients get the new rates. So you're not going back and changing much.

The other problem we'll see is the first time we log into a lot of these accounts is we will see rates are set up by employee. So we have partner, partner, I'm missing the associate, but that's okay. So if you use billing rates with this process, say that we have 200 matters set up within Clio and we hire legal assistant B. Well, legal assistant B has no billing rate on this matter, and at this point, as soon as that person is hired, someone needs to goin and edit all 200 matters and add that person's name to all the matters and their new billing rate. That's not a tenable process.

And with that, that's a quick overview of how we like to set up billing rights within Clio. If you need any accounting help with your law firm, please give us a shout over at Law Firm Velocity. Thank you. Bye bye.