What Types Of Billing Arrangements Are Supported?
Overview
To support firms looking to adopt alternatives to the traditional hourly billing model we have introduced a series of new billing arrangements to help automate the billing process:
- Hourly
- Capped fee
- Capped fee (recurring)
- Capped fee (recurring with contingent reserve)
- Capped rate (recurring with contingent reserve)
- Fixed fee
- Fixed fee (recurring)
- Non-billable
- Internal
User's can simply select a billing arrangement when creating a new matter:
Details
The following provides an overview of how each billing arrangment is calculated:
Hourly
An hourly arrangement simply incurs unbilled fees/work in progress at the applicable hourly rate.
Capped fee
A capped fee arrangement utilizes hourly rates up to an agreed maximum amount for a particular matter. For example if a firm has Unbilled fees of 4,800, with the Billing value set at 4,000, only the 4,000 will be charged. The Capped fee arrangement will also take into account interim bills raised on the matter previously. So the calculation to determine if the cap is applicable is Invoiced fees + Unbilled fees > Billing value.
Capped fee (recurring)
A capped fee arrangement utilizes hourly rates up to an agreed maximum amount for a particular matter within a given time period (eg Monthly). For example if a firm has un-billed fees of 4,800, with the Billing value set at 4,000, only the 4,000 will be charged. The capped fee arrangement will not take into bills raised on the matter previously. So the calculation to determine if the caUn-billed fees > Billing value.
Capped fee (recurring with contingent reserve)
A capped fee with a contingent reserve uses the same calculation as the Capped fee (recurring) arrangement, the difference is that a contingent value is 'reserved' and is available to be invoiced once a successful outcome is reached for the matter.
Capped rate (recurring with contingent reserve)
A capped rate with contingent reserve uses the same approach as a capped fee arrangement, the difference is that it automatically caps the values per time line to a specified rate and the remainder is held in reserve to be invoiced once a successful outcome is reached for the matter.
Fixed fee
A fixed fee arrangement will charge a set amount regardless of the time spent on a particular matter. For example if a firm has unbilled fees of 2,400, with the Billing value set at 4,000, the 4,000 will be charged. The fixed fee arrangement takes into account interim bills raised on the matter previously.
Fixed fee (recurring)
A fixed fee (recurring) arrangement works in the same way as the fixed fee, however it does not take into account interim bills issued on the matter previously.
Non-billable
An non-billable arrangement will automatically set the applicable applicable hourly rate to 0 for all time records.
Internal
An internal arrangement is used for tracking internal projects and/or non-billable internal work.
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