July 05, 2016 at 10:00 AM
Are you current billing practices bulletproof?
Chances are, if you haven’t reviewed your billing process in the last 10 years, now would be a good time to do so.
It is an area the New Zealand Law Society is currently focusing on, and if you don’t comply it could come back to bite your firm.
According to the NZLS, practices such as these could be potentially misleading:
- Conflating an ‘agency fee’ or other firm charges with a disbursement such as a Land and Information New Zealand fee when there is no agent.
- Charging an additional fee (such as an agency fee) whether or not recorded as a disbursement when there has been no disclosure of this in your terms of engagement.
- Describing a bureau/office service fee or expense recovery which is not an actual cost to the practice as a disbursement.
When we say flouting these laws could come back to bite your firm, we mean that in a very serious way. A disciplinary-tribunal kind of way.
It happened last year, when a practicing lawyer was taken to the New Zealand Lawyers and Conveyancers Disciplinary Tribunal for charging LINZ disbursements to clients as an ‘agency fee,’ even though those charges were not actually incurred by him or his firm.
He also charged clients a variable ‘office expense’ above those expenses properly incurred, without his clients’ knowledge of the nature or extent of the charges.
While he admitted a charge of unsatisfactory conduct at the first possible chance, he was still censured, ordered to refund the fees, apologise to the clients, undertake practical training or education and pay costs.
Possibly the worst of all was that his name made law news in a way many would not see as positive.
So how can you avoid this happening to you?
The best thing you can do is focus on being open and transparent.
Know your obligations around disclosure and disbursements, and make your billing very clear. Separate out each fee type and break down what it was for.
For instance, the fee for attending all aspects of a property purchase might include obtaining a LIM report, negotiating with the other party, discussing rates apportionment and registering title documents.
You won’t necessarily need to list costs for each individual part of the job, but breaking down the job itself, so the client knows exactly what they’re paying for, is a good start.
There are plenty of resources to help you on the NZLS website, but when implementing on a day-to-day basis, OneLaw has many clever tools to make your job easier.
We have been working on exciting new capabilities for our latest 1.16 upgrade – due out this month – which will enable each client to fully customise their own invoice layout.
This means you can ensure complete professionalism, uniformity and most importantly, compliance with the rules.
It introduces an option to list every attendance on the matter bill, including full financial disclosure to completely comply with the regulations and allow you peace of mind.
Now that’s bulletproof.