* Seven Ways To Think Different About Billing

Think different. Question your assumptions. Take a chance. You just might change the world. Or maybe you’ll come up with a creative solution to the age-old problem of billing your customers.

By Erik J. Heels

First published 4/1/2001; Law Practice Management magazine, “nothing.but.net” column; American Bar Association

Apple Computer’s 1998 Emmy Award-winning “Think Different” ads reminded us sometimes those crazy enough to think they can change the world often do. And in order to “think different,” we have to challenge our assumptions about the problems before us. What is holding you back from thinking (to borrow a familiar phrase) outside of the box? Think different. Question your assumptions. Take a chance. You just might change the world. Or maybe you’ll come up with a creative solution to the age-old problem of billing you customers. Here are four ways to think different about this issue.

1) Internet-based billing.

An Internet-billing service has advantages over PC-based billing services for all the same reasons that Internet-based applications are “better than” their PC counterparts. With web-based , all you need is an Internet connection and a web browser! No fuss, no mess! But is it really that easy? If your law firm were considering deep-sixing its billing software for an online billing solution, where would you look first? Here are some suggestions.

Online billing is one example of an outsourced application. Such an application would be offered by an Application Service Provider. So the first place that I would look is the ASP Consortium (http://www.aspindustry.org/), the industry group of name brand (to the extent that that term can be used) ASPs. Then search for what you’re looking for (in this case “billing”). Are there companies listed that provide the service? Have you heard of them? Are they public companies? The white paper entitled “A Buyer’s Guide to Application Service Provisioning” (http://www.aspindustry.org/ASPBuyersGuide.pdf) has good tips for what to look for when choosing and ASP for any outsourced application.

Another good source of Internet-based billing is Yahoo. Two placed to look are Yahoo’s directory of Time Management companies (http://dir.yahoo.com/…), and Yahoo IT Marketplaces (http://industrymarketplaces.yahoo.com/), which is also a good place to look for B2B products and services.

One Internet-based billing provider is OpenAir.com (http://www.openair.com/) (formerly TimeBills). OpenAir.com provides automated solutions to service industries, including the legal market, in several areas, including invoicing, expense tracking, and billing. Bills can be sent to clients electronically, you can print your own bills, or OpenAir.com will send paper bills for you.

Tymetrix (http://www.tymetrix.com/) takes an interesting angle to outsourced billing. Bills are delivered to Tymetrix, and clients can check them for accuracy and unauthorized charges. Disputes are resolved via e-mail, and the end result is clients pay bills faster, and firms get paid more quickly.

2) Do-it-yourself E-commerce

For the brave, you can add e-commerce functionality to your website to take payment by credit card (or otherwise) online. To do this, you’ll need to get a merchant account and a gateway account. With the possible exception of the legal profession, the banking profession in the country is the most heavily regulated business on the planet. For the same reason that it’s hard for a Bostonian to cash a check in San Francisco, it’s hard to find one “bank” who can solve all your e-commerce needs.

Some Payment Gateway Providers are also Merchant Account Providers, and some Shopping Cart Providers have relationships with the other providers. Confused? You should be. E-commerce should be as simple to add to your site as graphics. Until it is, it won’t be universal. Until then, you’ll have to digest the alphabet soup of acronyms to make this solution work for you.

Fortunately, there are sites that can help you decide which providers to choose. MerchantWorks (http://www.merchantworkz.com/) rates merchant account providers and includes case studies with real world examples of how much one various providers’ services cost. The site also includes information on providers who offer all-in-one (merchant account plus gateway provider) services.

3) Outsourced E-commerce

A simpler way to add e-commerce to your website is to purchase an outsourced solution. For an outsourced approach, consider iBill (http://www.ibill.com/), which can help you accept credit cards via your website with an all-in-one solution. You basically use iBill’s merchant account and pay them a flat percentage of each transaction. For example, if you wanted to set up a fee-based member section of your website, you could do so using iBill’s services.

4) Third-Party E-commerce

Or, you could just take credit cards without adding any functionality to your website. Use a third-party clearing house such as PayPal (http://www.paypay.com/), which allows funds to be transferred from one party to another by crediting and debiting credit card or bank accounts. Consider this example. Buyer buys a book from seller for $99. Buyer pays PayPal $100 via credit card. Seller’s credit cart is credited $99 by PayPal. PayPal’s service is used most frequently to consummate sales from auction sites such as Ebay (http://www.ebay.com/), but it could also be used for other transactions.

5) Even More Radical Solutions

Another creative solution is to require that payments be made by a particular third party. Kind of like publishing a book but only selling it via Amazon.com, for example. The first law firm to make its bills payable via Yahoo! Wallet, for example, will no doubt have success its efforts as well as a good story to pitch to the media. The Wall Street Journal, your phone company, and several insurance companies allow bills to be paid via Yahoo! Wallet (http://help.yahoo.com/help/us/fin/bills/bills-29.html). Why not your firm?

6) Try a legal services organization.

Another solution is to sell your services through a third party that charges a flat fee for services. The most obvious example of this is Americounsel (http://www.americounsel.com/), which offers fixed-rates services to end users (both individuals and businesses) for defined rates. For its client law firms, Americounsel provides pre-qualified candidates for legal services. A win-win for both parties. There are other legal service organization, such as Hyatt Legal Plans (http://www.legalplans.com/attorneys.htm). Search Yahoo for “legal plans” to find them.

7) The ultimate solution.

I recall a 1994 article that posed the question “Will technology slay the billable hour?” The problem described by the article was that technology was making lawyers more efficient, enabling them to complete tasks more quickly, and hence allowing them to bill fewer hours. Add in the enormous cost of computers and take the argument to its logical conclusion, and all law firms will go out of business. So (besides task-based billing – see #6 above), what’s a firm to do?

The ultimate solution to the problem of the billable hour is to simply charge more per hour. You are more efficient, hence more valuable. When individual employees achieve this result, they are given a raise. Try giving yourself a raise for the exact same reasons. If your clients balk, prove that you’re taking fewer hours to complete tasks. And if you’re actually not taking fewer hours to complete tasks, keep charging the same hourly rate.

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