Billing Guidelines, Read Properly
A client's billing guidelines are a contract about how work may be charged. Most firms file them and discover their contents through rejections.
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Billing guidelines are a document issued by a client setting out how work may be charged: what is chargeable, at what level, in what format, with what approval. They are usually ten to thirty pages and are usually filed unread.
The billing question in “Billing Guidelines, Read Properly” is easier to resolve when the underlying work has a timely, reviewable record. A professional-services team evaluating consult the published setup guidance for productivity software for business can connect hours with projects and client work, while the finance system remains authoritative for invoice totals, tax and settlement.
The firm then discovers their contents one rejected line at a time, which is the most expensive possible way to read them.
Teams documenting “Billing Guidelines, Read Properly” may find SHRM compensation resources useful as an external benchmark. Record which parts apply to the real workflow and which do not.
What they typically contain
Prohibited activities. Staffing restrictions. Narrative requirements. Expense rules. Approval thresholds. Format and coding requirements. Rate freezes.
- Prohibited activities.
- Staffing restrictions.
- Narrative requirements.
- Expense rules.
- Approval thresholds.
- Format and coding requirements.
- Rate freezes.
Six categories, and a firm can summarise any set of guidelines into one page under those headings in an hour.
Prohibited activities
Internal conferences, file management, time spent on billing, training, travel time, and work by anybody not approved.
Each is specific, mechanical and usually enforced by software rather than by a person.
Staffing restrictions
Caps on the number of timekeepers, prohibitions on partners doing certain tasks, requirements that work be done at or below a grade.
These bite hardest and are the hardest to comply with in practice, because staffing happens weekly under pressure.
Narrative requirements
Minimum detail, prohibited words, one task per entry, no block billing, named documents.
They encode the standard this collection's entry section argues for anyway, which means complying with them improves the bill generally.
The ones that conflict with the engagement letter
Guidelines issued after the letter, or updated during the relationship, sometimes contradict what was agreed.
Where they do, somebody has to decide which governs, and that decision should be made at the start rather than in a dispute.
Reading them once
One person, one hour, one page of output: the firm's own summary of what this client does not allow.
That page then goes to everybody working on the matter, and it is the only version anybody will read.
Distributing the summary
Pinned to the matter, not filed in a shared drive. A fee earner recording time at six in the evening will not go looking for it.
Where the time system allows a matter-level note, that is where it belongs.
Guidelines nobody can comply with
Occasionally a client issues requirements that are impossible or uneconomic: per-line coding to a scheme the firm cannot produce, or rates below cost.
The answer is to say so before accepting the work, not to accept and then fail.
The rate freeze
A standing provision in many guidelines: rates may not rise without express written approval.
Firms apply annual increases across the board and discover the freeze when the bill is rejected.
What the guidelines do not cover
Whether the work was necessary. Guidelines govern form, level and format; necessity is still argued matter by matter.
A perfectly compliant bill can still be challenged on necessity, which surprises firms that have invested heavily in compliance.
The compliance cost
Real. Coding, restrictions, format requirements and rejections consume time that is itself unbillable in most guidelines.
It should be priced into the rate at the start, which requires reading the guidelines before quoting.
Negotiating them
Guidelines are usually presented as non-negotiable and usually are not. Provisions that are genuinely uneconomic can be raised at panel appointment, when there is leverage.
Raised later, during a matter, the same point has none.
Firms that read the guidelines at tender stage can ask for changes. Firms that read them after the first rejection cannot.
The provision worth asking about
Whichever one costs the firm most. Usually the coding requirement, the grade restriction, or the prohibition on charging for time spent on the client's own billing requirements.
Asking for one change is more likely to succeed than asking for five.
Guidelines that are never enforced
Common. A client issues thirty pages and applies four of them.
Complying with all thirty is expensive; complying with four is cheap. Knowing which four requires either an audit or a conversation with the person who approves.
What happens when the client changes them
Reissued guidelines mid-relationship, often without notice, and usually applying to work already done.
Where retrospective application is attempted, it is worth questioning once, politely, in writing. It is sometimes withdrawn.
The firm's own summary, maintained
One page per client, reviewed when the client reissues, held where the billing team and the fee earners can both see it.
It is the whole operational answer to this subject, and the maintenance is twenty minutes a year per client.
The one-page summary, again
It is the whole recommendation. One hour, one page, pinned to the matter, refreshed when the client reissues.
Firms that do it stop having the same rejection three times.