The awkward billing conversation
The engagement letter said costs were estimated at a particular figure plus VAT and disbursements. Six months later the fee earner goes to raise an interim bill and discovers the WIP is well past it. The client was never told. Now there is a choice between writing time off or having an uncomfortable conversation, and possibly a complaint.
Nobody set out to hide anything. The estimate was typed into a Word letter, the time was recorded in the practice management system, and those two things never met until someone looked at the bill.
Why the estimate and the WIP never meet
In many firms the estimate is not stored as a number against the matter at all. It lives in the text of the client care letter, sometimes with a range, sometimes split by stage. Even where the practice management system has a budget field, it is often left empty, or holds the first estimate and was never updated.
So the system cannot warn anyone. The fee earner has to remember to check, and during a busy matter that is the first thing to slip.
| Where the information sits | The problem |
|---|---|
| Estimate in the client care letter | Free text, not something a system can compare against |
| Budget field in the PMS | Often blank or out of date |
| Time and disbursements | Recorded, but nobody compares them to the estimate |
| Revised estimates | Sent by email and not recorded against the matter |
What surprise overruns cost
Written-off time is the direct cost. Complaints are the more serious one: a client who was not updated about costs has a legitimate grievance, and handling that takes partner time and damages the relationship. Clients who feel surprised by a bill tend not to come back or recommend the firm.
There is a cost to the fee earner too. Nobody enjoys finding out at billing time that they have been working unpaid for weeks.
How we connect estimates to recorded work
- Capture the estimate: we read estimates from existing client care letters where they follow your templates, and add a structured estimate field (with stages if you estimate by stage) for new matters.
- Track against it: each night the tool reads recorded time, unbilled disbursements and billed amounts from your practice management system for every open matter.
- Thresholds you choose: when a matter crosses levels your firm sets, the fee earner and supervisor get a notice showing the estimate, the current figure and what has driven it.
- Draft update: the tool drafts a costs update letter or email from your template, with the figures filled in, for the fee earner to edit, approve and send.
- Record it: once sent, the revised estimate and the date are saved against the matter, so the next comparison uses the new figure.
- Overview: a list for partners and the finance team of matters near or over estimate, sorted by how far over.
How the fee earner's month changes
Fee earners hear about an approaching estimate while there is still time to talk to the client about it, not after. The costs update is a two-minute review of a draft rather than a letter written from scratch. Partners can see which matters are drifting before they appear as write-offs.
And when a client queries a bill, the history of estimates and updates is on the matter rather than scattered across sent items.
Checklist before you get in touch
- Estimates are only recorded in the text of client care letters.
- The budget field in your practice management system is rarely filled in.
- Overruns are discovered at billing time.
- Time is written off because clients were not updated.
- Revised estimates are sent by email and not recorded anywhere central.