Running a law firm is running a business, but the financial side of that business still looks surprisingly analog. Checks get printed and signed by hand, invoice details get keyed in twice, and payments get tracked in spreadsheets. These are the kind of manual tasks that lower efficiency: hours lost to data entry, errors that take days to catch, cash that moves slower than it should. But a strategic shift is underway.
Centerbase CEO Michael Dunn describes the legal ERP standard as moving "from a system of record, to a system of action." A system of record captures what happened. A system of action makes things happen. Centerbase recognized the need to pull AR and AP into the platform firms use to run their business. Law firms need robust fintech tools, the same caliber of payment and financial infrastructure any growing business relies on.
Why AP, and why now
For years, law firm finance teams have run vendor payments outside their core system. Printing checks. Keying in account details by hand. Chasing payment status across disconnected tools. At the volume a midsize firm operates, that manual workflow burns hours and invites errors. It was an operational gap.
The Centerbase and AvidXchange partnership, announced in May 2026, closes that gap by embedding full payment automation directly into the platform through AvidXchange's Accounts Payable as a Service solution. Firms can now view unpaid invoices, initiate and approve payments, and watch status in real time without leaving Centerbase.
AvidXchange executes the payment on the firm's behalf across a supplier network of more than 1.5 million vendors, and the company reports its AP automation cuts the time finance teams spend on administration by up to 80 percent.
Beyond the time savings, embedding AP alongside AR improves a firm’s insight into its working capital. Centerbase Payments already captures the inflow; Centerbase AP captures the outflow. Together they put both sides of the firm's cash movement on one platform, in real time. For finance leaders, that provides a single source of truth, sharpening the command over liquidity, timing, and capital deployment that the firm depends on.
Comprehensive firm intelligence
Dunn notes the importance of strategic partnerships that extend Centerbase for its clients. “Money movement is hard. AvidXchange has spent 25 years and serious capital building rails that move money at scale across industries, and it operates as a licensed money transmitter. Partnering for this ability delivers value immediately to our Centerbase customers,” says Dunn.
With AvidXchange, Centerbase now provides a unification of operations and financial data, giving a total firm health view. Every payment flows through the platform tied to a client and a matter. That linkage produces something firms have historically struggled to see: matter-level profitability. A firm can usually tell you it was profitable last year. Far fewer can tell you which matters made money and which quietly bled it. When every disbursement, trust return, settlement payout, and filing fee is captured against the matter it belongs to, that question finally has an answer.
Centerbase is compounding a financial dataset that gets richer with every transaction the platform executes, and that no other solution delivers for midsize law.
Embedded finance, with legal's edges intact
General purpose AP and AR automation isn’t robust enough for law firm use. Legal payments carry obligations most other business types never face. Trust accounting rules. Disbursements that must be tracked to the dollar. The bright line between billable and non-billable expense, where a missed tag is lost profitability. Overdraw a trust account or make an improper disbursement, and the consequence isn't an accounting headache, it's a bar complaint.
Centerbase's contribution to the partnership is deep expertise, the legal-specific governance and audit structure wrapped around the money movement AvidXchange powers underneath. The Centerbase solution provides compliance, context, and the customer experience.
Centering the business of law, that includes fintech
Centerbase is building a financial operating system for midsize law, with embedded payments, billing, and collections as one pillar and AI-driven financial intelligence, through its Centerbase IQ layer, as the next. The platform's value increasingly sits in being the place where the firm's financial and operational data come together.
About Centerbase Centerbase is the operating platform purpose-built for midsize law firms. It unifies matter management, billing, financial operations, and the AI tools firms are adopting into a single governed system, eliminating the operational drag that costs firms time, revenue, and client confidence. The result is a practice that runs tighter, bills what it earns, and turns its operations into a competitive advantage. To learn more, visit https://www.centerbase.com.
In this on-demand session, we walk through the new AvidXchange integration built natively into Centerbase’s Vendor Pay module and demo the full workflow live.
You’ll see how AP automation works for the way law firms actually operate: selecting vendor bills, choosing payment preferences, validating with AvidXchange, and tracking everything in the Vendor Pay Dashboard, all without leaving Centerbase. We cover the three vendor-choice payment methods (virtual card, ACH, and check), built-in fraud protection through positive pay and single-use cards, simplified one-to-one reconciliation, and electronic approval workflows with a full audit trail.
What's covered in the webinar
How the integration works end to end — From selecting bills in the Vendor Center to submitting a batch and monitoring payment status in the Vendor Pay Dashboard — all inside Centerbase, with no external logins or portals required.
The AvidXchange supplier network — With over 1.5 million enrolled vendors, most of your regular payees are likely already in the system. AvidXchange manages outreach and enrollment for any that aren’t — your team doesn’t make a single vendor call.
Three payment methods, vendor's choice — Virtual card for fast settlement, ACH for electronic transfer with full remittance data, or check for vendors who prefer it. No payment method is forced on anyone, and vendors can update their preference at any time through AvidXchange’s supplier portal.
Fraud protection built into every transaction — Outgoing checks are issued from AvidXchange’s clearing account — not yours — so your banking information is never on a check. Virtual cards are single-use. Positive pay is maintained on every payment. Vendor bank accounts and legal entity details are verified before any payment goes out.
One-to-one reconciliation — Every payment is assigned a unique Vendor Pay ID that flows through to your bank debit. AvidXchange debits each payment individually, so there’s no lump sum to reverse-engineer and no ambiguity at month-end close.
Electronic approval workflows — Set thresholds by dollar amount, account, or payment type. Approvers get notified and can act from anywhere — no physical presence required. Every approval is logged and timestamped, creating a complete audit trail.
Pricing — The integration is free to enable. No monthly fees, no implementation costs, no per-transaction fees for ACH or virtual card payments. The only cost is approximately $0.79 per physical check mailed — and through Centerbase’s partnership with AvidXchange, the standard $195/month platform fee is waived entirely.
About Centerbase Centerbase is the operating platform purpose-built for midsize law firms. It unifies matter management, billing, financial operations, and the AI tools firms are adopting into a single governed system, eliminating the operational drag that costs firms time, revenue, and client confidence. The result is a practice that runs tighter, bills what it earns, and turns its operations into a competitive advantage. To learn more, visit https://www.centerbase.com.
About AvidXchange® AvidXchange is a leading provider in accounts payable (AP) automation, offering intelligent AP software and payment solutions specifically designed for mid-market businesses and their suppliers. With 25 years of industry experience, AvidXchange modernizes the way businesses manage their expenses and payments by offering AI-enhanced software coupled with support from experts. Empowering over 8,000 growth-driven businesses, AvidXchange increases efficiency, control, and visibility in financial operations and has securely processed payments to more than 1.5 million suppliers through its proprietary payment network over the past five years. Additionally, AvidXchange is a licensed money transmitter for B2B payments in the United States, licensed as a Money Transmitter by the New York State Department of Financial Services, as well as all other states that require AvidXchange to have a license. For more information, visit https://avidxchange.com.
AvidXchange Media Contact: Alexis Riddick Public Relations Manager AvidXchange pr@avidxchange.com
The partnership gives law firms a fully managed accounts payable automation solution built directly into Centerbase, eliminating manual payment workflows without leaving the platform they already use to run their practice.
DALLAS, TEXAS, May 19, 2026. Centerbase, the operating platform purpose-built for midsize law firms, today announced a partnership with AvidXchange, a leading provider of accounts payable automation and payment solutions for mid-market businesses, to embed full payment automation directly into the Centerbase platform through AvidXchange’s Accounts Payable as a Service solution.
Law firm finance teams have long managed vendor payments outside their core practice management systems—printing checks, manually entering account information, and tracking payment status across disconnected platforms. At the volume midsize firms operate, that workflow costs time, introduces errors, and creates fraud exposure. Automated payments have been one of the last remaining workflows that didn’t exist inside the system.
AvidXchange reduces the time finance teams spend on AP administration by up to 80%, giving firms back hours each month that can be redirected to higher-value work.
Through this integration, Centerbase customers can now view unpaid invoices, select and initiate payments, and complete the approval process without leaving the platform. Once approved, AvidXchange executes the payment on the firm’s behalf, leveraging a network of more than 1.5 million suppliers and delivering payments through the methods that best meet each vendor’s needs. Finance teams gain real-time visibility into payment status, a complete audit trail, and built-in fraud protections, including secure digital payment methods such as virtual credit cards and reduced manual touchpoints that limit the exposure law firms face when handling vendor payments at volume.
Centerbase selected AvidXchange as its embedded accounts payable automation partner for its depth of experience serving compliance-driven industries and the breadth of its supplier network. The integration is available to Centerbase customers now.
"Centerbase is built around automating the business of law, giving people the visibility and control they need without requiring them to manually execute routine tasks," said Michael Dunn, CEO of Centerbase. "Payments are a perfect example. Firms need governance over every transaction, but they shouldn’t have to print a check or log into a separate system to make one happen. AvidXchange closes that gap."
"Law firms operate in a uniquely high-stakes and strictly compliant financial environment while balancing the day-to-day demands of serving clients," said Michael Praeger, CEO and Co-Founder of AvidXchange. "By embedding accounts payable automation directly into Centerbase, we help law firms spend less time on back-office work and more time focused on client needs."
Centerbase customers interested in automating their payments through the AvidXchange integration can contact their Centerbase account representative or visit https://www.centerbase.com/payments for more information.
About Centerbase Centerbase is the operating platform purpose-built for midsize law firms. It unifies matter management, billing, financial operations, and the AI tools firms are adopting into a single governed system, eliminating the operational drag that costs firms time, revenue, and client confidence. The result is a practice that runs tighter, bills what it earns, and turns its operations into a competitive advantage. To learn more, visit https://www.centerbase.com.
About AvidXchange® AvidXchange is a leading provider in accounts payable (AP) automation, offering intelligent AP software and payment solutions specifically designed for mid-market businesses and their suppliers. With 25 years of industry experience, AvidXchange modernizes the way businesses manage their expenses and payments by offering AI-enhanced software coupled with support from experts. Empowering over 8,000 growth-driven businesses, AvidXchange increases efficiency, control, and visibility in financial operations and has securely processed payments to more than 1.5 million suppliers through its proprietary payment network over the past five years. Additionally, AvidXchange is a licensed money transmitter for B2B payments in the United States, licensed as a Money Transmitter by the New York State Department of Financial Services, as well as all other states that require AvidXchange to have a license. For more information, visit https://avidxchange.com.
AvidXchange Media Contact: Alexis Riddick Public Relations Manager AvidXchange pr@avidxchange.com
If your firm is already on Centerbase for practice management but still running collections through a separate payments tool, there's a quiet cost to that setup. It doesn't show up on an invoice. It shows up in the reconciliation steps your team runs at month end. It shows up in trust accounting pieced together from two systems that were never built to share a ledger. It shows up in the retainer you couldn't collect at intake because the invoice didn't exist yet, or the refund that took two workflows to finish.
Centerbase Payments closes that gap. Because it's built into the platform your firm already uses, turning it on doesn't mean a migration, a new vendor, or a long implementation. Most firms finish onboarding in a single call of 20 to 30 minutes. After that, billing and payments run from the same place.
When a client pays, the rest takes care of itself
When a client pays through an invoice link, the invoice marks as paid, a payment record is created, and a bank deposit record is generated. All at the same time. No one on your team logs into a second system. No one posts the deposit at month end. The payment event *is* the accounting event.
For your billing staff, that turns collections work into confirmation work instead of data entry. For your CFO, the numbers are current without waiting for a reporting cycle. For the firm as a whole, the manual steps that currently connect your payment processor to your billing system simply stop existing.
Seven manual tasks off your team's plate.
1. Invoices close and deposits post without anyone in the middle
In most split-system setups, a payment arrives in your processor, someone notes it, the invoice gets updated by hand, and the deposit gets posted later that day, or that week, or at month-end close.
With Centerbase Payments, all of that collapses into one event. The client pays. The invoice closes. The bank deposit record generates on its own once the payout confirms. The only transactions that still need a manual deposit entry are paper checks. Everything else moves through the ledger automatically.
This isn't a faster version of the manual process. It's a different process. The gap between cash received and cash recognized goes away.
2. Trust and operating funds route correctly before they reach the bank
Trust accounting errors at midsize firms usually aren't the result of carelessness. They come from moving funds manually across two systems that don't share a ledger. The processor records the collection. The billing system records the matter. Someone on your team reconciles the two, which means someone on your team can get it wrong.
Centerbase Payments handles the routing at the transaction level. When a payment includes a client principal and a convenience fee, the system separates them before the funds arrive. Principal goes to trust, the convenience fee goes to operating, and journal entries are created automatically.
Your trust ledger reflects reality from the moment the payment processes, not from the moment someone finishes a month-end review. IOLTA and PCI compliance are built in, with both accounts verified independently.
3. Retainers get collected at intake, before any invoice or matter exists
If your intake process ends with a verbal commitment and "an invoice to follow," there's a collections gap between the moment a client agrees to work with you and the moment they pay.
Centerbase closes that gap. Your team can share a payment link at intake, before any matter is opened or any invoice is generated. The client pays by card or ACH, the funds route correctly, and the matter is opened when it's ready.
The retainer is collected at the point of commitment, not after the work begins. For anyone managing cash flow across a practice, that shift changes the financial profile of every new engagement.
4. Clients see what they owe, including any fees, before they confirm
Fee disputes slow collections, and they almost always start the same way: a client sees a charge they didn't expect. Centerbase Payments shows clients a fee preview before they confirm any payment, so what they see is what they pay.
The fee setup is flexible. Card fees are percentage-based, ACH fees are flat-rate, and either can be applied across the firm or scoped to specific clients or matters. That means existing arrangements can be honored without creating manual exceptions. Clients don't need a portal login either. They can pay through the invoice email or a firm-branded page.
When clients know what to expect, disputes drop. When disputes drop, your billing staff spends less time resolving exceptions and more time on collections that actually move forward.
5. Your team sees what happened in real time, inside Centerbase
In a split-system setup, finding out whether a payment came in means logging into the processor or waiting for someone who did. That lag is small on any single transaction. Across a busy week, it adds up. It delays follow-up, blurs your cash position, and slows the firm's response on collections.
Centerbase Payments supports per-transaction notification emails and a daily digest of the previous day's activity, sent to whoever needs it. Your billing staff sees the activity in the system they already work in. No second dashboard, no separate login, no waiting.
For firms managing collections across a heavy matter load, the speed of that notification loop has a direct effect on days to payment.
6. Refunds finish in one workflow, not two
In a split system, every refund takes two separate actions. Someone initiates the refund in the payment processor, then reflects the accounting update in the billing system. Both steps have to happen, both have to be accurate, and both are an opportunity for the numbers to drift apart.
The Begin Refund workflow in Centerbase Payments handles the Stripe refund and the accounting update in one operation. Full and partial refunds both work the same way. When the workflow is done, the refund is done. No second step, no reconciliation required.
For your accounting team, that removes a category of exception work that currently takes coordination across systems.
7. All your transaction data sits in one place, ready to export when you need it
The Transaction Details report gives your finance team exportable transaction data with configurable columns and date range filters. Each payment has a PDF receipt stored automatically. Payouts are tracked, with full drill-down to individual transactions.
Bank reconciliation and audit prep stop being a question of pulling data from multiple sources. Everything is in Centerbase, sourced from the same system that processed the transaction. The report your finance team runs is the same record the platform created when the payment cleared.
Turning Payments on is easy. Really.
Activating Centerbase Payments is simple. Onboarding takes one call, typically 20 to 30 minutes. Invoice payment links stay the same after the switch. Clients won't notice any change in how they pay. Your team gets the fully integrated workflow from day one.
What you get back is every manual reconciliation step your team stops running, every trust accounting error your firm stops risking, and every retainer collected at intake instead of chased after the work begins.
If Centerbase Payments isn't turned on at your firm yet, it's worth taking a look. Your CSM can walk you through what activation would look like for your firm specifically: what the current workflow looks like, where the manual steps are, and what changes on the other side. Half an hour of your time, and your team stops doing seven things by hand.
Centerbase provides cloud-based legal software that centralizes all aspects of law firm management, including billing, accounting, timekeeping, matter and document management, automated workflows, and profitability reporting. Designed for mid-size law firms, Centerbase helps firms modernize operations, optimize productivity, and improve client service. For more information, visit centerbase.com.
There's a particular kind of frustration that billing professionals at law firms know well. It's the moment you open a multi-payor matter and realize you're about to spend the next hour doing something that should take five minutes.
You've got one matter. Three payors. An insurance carrier at 60%, a client paying the remaining 35%, and a co-defendant handling 5%. You've generated the invoice. Now you need to split it correctly, make sure the numbers add up, route the right bill to the right party, update the spreadsheet that tracks it all, make sure the LEDES submission goes to the right carrier with the right Client Matter ID, and then — once payments start coming in — make sure each one posts to the right payor so AR doesn't fall apart.
That's not a billing problem. That's a process problem. And it's a process problem that most practice management systems have never actually solved — they've just left firms to work around it.
Centerbase changes that with Multi-Payor Billing: a purpose-built billing engine that takes every manual step in that process and handles it automatically, inside a single matter record. Let's walk through what that actually looks like in practice — from the moment you set up a matter to the day it closes.
The Setup: One Configuration, Saved for the Life of the Matter
The old way of handling multi-payor matters usually started the same way: someone set up a matter in the system, then opened a spreadsheet alongside it. The spreadsheet became the source of truth for payor allocations — who owes what, what percentage they carry, what's been billed, what's been paid. Every billing cycle required someone to update it. Every new person on the billing team had to learn where it lived and how it worked.
In Centerbase, the setup starts inside the matter itself. Navigate to Matter → Cog → Split Billing → Multi-Payor, click Edit, and you're in the Multi-Payor configuration screen. Add your payors — as many as the matter requires, up to 70 or more — and assign each one a billing percentage. That configuration is saved as a multi-payor record attached to the matter, and it stays there for the life of the case.
The system gives you two tools to make percentage setup fast. If your payors split equally, hit Distribute Evenly and the system assigns identical percentages across all parties in one click. If you're working with custom allocations and the numbers come out slightly off — 99.9% instead of 100%, or 100.1% due to rounding in your mental math — Match Remaining automatically corrects the last payor's share so the total balances. No calculator, no manual correction.
You also designate a Primary Payor for the matter. This is the party that receives any rounding remainder when invoice amounts don't divide evenly across payor percentages. It's a small but important detail: without it, those fractions of a cent create ongoing reconciliation issues. With a designated Primary Payor, every invoice closes clean.
If the matter involves insurance carriers who require LEDES billing, you can assign a unique Client Matter ID to each payor right here in the setup screen. That ID will flow automatically into the LEDES mapping table later — which we'll come back to — so there's no duplicate entry required.
One configuration. Every payor, every percentage, every LEDES ID — set up once and tracked automatically from first invoice through final AR close.
Once you save the configuration, the matter is ready. The spreadsheet stays in the drawer. The system holds the record now.
Billing: The Math Happens Automatically, Every Time
Here's something that surprises people when they first see Multi-Payor Billing in action: time and expense entry doesn't change at all. Attorneys and timekeepers enter time and expenses exactly the way they always have. The matter handles the split on the back end, at the invoice level.
When you run a bill, Centerbase takes the total invoice amount and divides it among your payors according to the percentages you defined in the setup. If the matter has a 60/35/5 split, the $10,000 invoice becomes a $6,000 charge to the carrier, a $3,500 charge to the client, and a $500 charge to the co-defendant — automatically, without anyone doing arithmetic. The Primary Payor absorbs any rounding remainder.
The bill's financial summary gives you immediate visibility into how the split landed. The first five payors and their billing percentages appear on the bill itself. Click through and you'll see the full payor breakdown: each party's previous balance, current charges, payments applied to date, and any credits on account. It's a complete financial snapshot of where each payor stands on that invoice.
Now here's the part that billing managers tend to appreciate most: if the bill gets edited before it's posted — and bills get edited all the time, for all kinds of legitimate reasons — the splits recalculate automatically. You don't need to go back to the spreadsheet, redo the math, and make sure the updated numbers made it into the right column. The payor schedule stays intact. The system handles the recalculation. You review, approve, and post.
When a bill is edited before posting, splits recalculate automatically. The payor schedule stays intact. No manual correction required.
For matters with many payors — insurance defense cases sometimes involve a dozen or more funding sources — this automation isn't just convenient. It's the difference between a billing process that scales and one that breaks under its own weight.
LEDES Billing: One Setup, No Duplicate Entry
If multi-payor billing is complex on its own, adding LEDES e-billing requirements to the mix has historically made it significantly more so. Insurance carriers don't all use the same LEDES format. They each have their own Client Matter ID requirements. And they change their specifications with enough regularity that e-billing coordinators have spent years managing a queue of support tickets just to keep LEDES templates current.
Centerbase addresses both parts of this problem.
First, the connection between Multi-Payor setup and LEDES configuration. The Client Matter ID you assign to each payor in your Multi-Payor setup flows directly into the LEDES template mapping table. When you go to map your LEDES fields, those IDs are already there — no crosswalk, no manual re-entry, no copying between screens. Set it up once in Multi-Payor and the LEDES side of the house already has what it needs.
Each payor can also have their own LEDES template and delivery address. In the gear icon settings next to any payor, you can uncheck Use Client Settings and configure that payor independently. A matter with four insurance carriers can run four different LEDES 1998B formats, each mapped to the right Client Matter ID and delivered to the right address. That's a configuration that used to require careful manual coordination — and that's now handled in one screen.
Second, the template management problem. When a carrier updates their LEDES format requirements, the answer used to be: open a support ticket and wait. E-billing coordinators would submit the ticket, the carrier's deadline would approach, and billing would sit on hold while someone else made the change.
Centerbase's self-serve LEDES Template Builder puts that control directly in your team's hands. Navigate to System Settings → Electronic Billing → Self-Serve Templates, build your LEDES 1998B template, map the fields, and publish. Templates are validated before they go live, so misconfigured templates are caught before they reach production. Existing system-provided templates are untouched — you can adopt self-serve templates at your own pace, for the carriers where you need the flexibility, without any impact on your current setup.
E-billing coordinators can build, validate, and publish an updated LEDES template the same day a carrier changes their requirements. No ticket. No wait. No billing hold.
For firms that do substantial insurance defense work, this combination — per-payor LEDES templates, automatic Client Matter ID mapping, and self-serve template management — removes more friction from the e-billing process than any single feature has in a long time.
Payments and Credits: The Right Balance in the Right Place
Posting payments on multi-payor matters is one of those tasks that looks simple and isn't. The question isn't just "who paid?" — it's "which payor's balance should this payment reduce, and on which matter?" Get that wrong and AR stops making sense. Get it wrong consistently and reconciliation becomes a monthly project.
Centerbase makes the allocation explicit and immediate. When you record a payment, you select the client as usual — all bills for that client appear, including multi-payor ones. If you're working from the Multi-Payor Matter record directly and need to apply the payment to a specific payor, you select that individual payor. The balance updates immediately. There's no ambiguity about where the payment went, and no additional step required to reflect it in AR.
Credits work at two levels, and the distinction is useful. Credits assigned at the matter level stay on that matter — they're available to offset charges on that matter and nothing else. Credits assigned at the client level are available across all of that client's matters. In a multi-payor context, this means you can apply a credit from a specific carrier's overpayment directly to the matter where it belongs, without it flowing into other matters where it doesn't apply.
It's a small distinction, but it's the kind of precision that finance and accounting teams depend on when they're producing reports that need to be right. Not approximately right. Actually right.
AR Reporting: The Full Picture, Without the Reconciliation Step
One of the most common frustrations in law firm finance is pulling an AR Aging report on a multi-payor matter and knowing that what you're looking at isn't complete. Payor-level detail lives somewhere else. The numbers you're seeing don't include the full picture. Before you can trust the report, you have to reconcile it against another source.
Centerbase brings that data into Centerbase, where it belongs. Each payor in a multi-payor matter is treated as a client for AR reporting purposes. That means the AR Aging report breaks out balances at the payor level — what each party owes, what's been collected from each party, and where each payor's account currently stands. The report reflects the full financial picture of the matter without any additional reconciliation work.
The Multi-Payor tab on each matter is the real-time view for anyone who needs payor-level detail on a specific case. Billing managers can pull it up mid-cycle. Partners can check it before a client call. Finance leads can use it to answer questions from management without making calls to the billing team first.
One thing worth knowing about the AR Aging report: if your team groups it by Invoice, it will display the client assigned to the matter rather than the individual payors. Grouping by payor gives you the full payor-level breakdown. It's a simple setting change, but it's worth flagging for teams that are setting up their reporting workflows for the first time.
AR Aging reflects every payor's balance accurately — what's owed, what's collected, and what's outstanding — without a manual reconciliation step.
The Point Isn't the Features. It's the Time You Get Back.
It's easy to describe Multi-Payor Billing as a set of features: payor schedules, automatic splits, LEDES integration, self-serve templates, real-time AR. And those features are real and useful. But the actual value of the feature set isn't best measured in capabilities — it's best measured in what your billing team stops doing.
They stop maintaining the spreadsheet. They stop recalculating splits when bills are edited. They stop opening support tickets when a carrier updates their LEDES format. They stop reconciling AR reports against external records. They stop manually cross-walking Client Matter IDs between the billing system and the LEDES mapping screen.
All of that time goes somewhere else — to higher-value work, to matters that actually need human judgment, to the kind of proactive billing management that helps firms get paid faster and maintain better client relationships.
That's what it means to move from manual to manageable. Not that multi-payor billing becomes simple, because the underlying complexity is real and it doesn't disappear. It means the system absorbs that complexity instead of passing it to your billing team as manual work.
Multi-Payor Billing is available now in Centerbase. No migration required. Setup starts at Matter → Cog → Split Billing → Multi-Payor. If you're an existing Centerbase customer, your Customer Success Manager can walk your team through configuration in a single session. If you're evaluating Centerbase, we're happy to walk you through the full workflow in a live demonstration — including the specific scenarios your billing team deals with today.
Centerbase provides cloud-based legal software that centralizes all aspects of law firm management, including billing, accounting, timekeeping, matter and document management, automated workflows, and profitability reporting. Designed for mid-size law firms, Centerbase helps firms modernize operations, optimize productivity, and improve client service. For more information, visit centerbase.com.
If your law firm handles insurance defense, co-defendant matters, or any case where more than one party shares financial responsibility for fees, you've probably built a system for managing it. Maybe it's a spreadsheet that lives alongside every multi-payor matter. Maybe it's a manual allocation process your billing manager runs at the end of every billing cycle. Maybe it's a combination of both, stitched together with follow-up emails and a lot of double-checking.
It works, until it doesn't. An invoice gets edited after the split was calculated. A payor's balance doesn't reconcile with AR. A LEDES submission goes to the wrong carrier. The workarounds that keep multi-payor billing functional are also the reason it takes so much time and generates so many errors.
Multi-Payor Billing in Centerbase was built to change that. It's a purpose-built billing engine that handles split invoicing, payor-level AR tracking, and LEDES submissions for matters with multiple funding sources — automatically, inside a single matter record. No spreadsheets. No sub-matters. No off-system reconciliation.
Here are five specific ways it helps law firms operate more efficiently and accurately.
1. Eliminate the Spreadsheet That Lives Next to Every Multi-Payor Matter
Ask any billing manager at a firm that handles insurance defense, and they'll tell you the same thing: every multi-payor matter comes with a shadow document. A spreadsheet, a shared notes file, a column in a billing tracker — something that lives outside the practice management system and tries to answer the question the system can't: who owes what?
The reason that shadow document exists is simple. Most billing systems weren't designed to handle matters where the financial obligation is split among multiple parties. So firms build workarounds. The workarounds become standard operating procedure. And the standard operating procedure becomes a time sink that billing teams accept as unavoidable.
Multi-Payor Billing removes the need for that external document entirely. In Centerbase, you define your payor schedule directly inside the matter record — navigate to Matter → Cog → Split Billing → Multi-Payor, add your payors, assign percentage splits, and save. Every payor's obligation is tracked in Centerbase from that point forward, through every billing cycle, payment, and AR close. The system holds the record. Your billing team doesn't have to.
Define your payors once. The system tracks every allocation, every payment, and every balance from first invoice through final AR close.
The practical effect is significant. Billing managers spend less time maintaining parallel records and more time on work that requires their judgment. And the risk of discrepancy between what's in the system and what's in the spreadsheet — which is a common source of billing errors on complex matters — drops to zero.
2. Automate Billing Splits So the Math Is Never Wrong
Manual allocation is one of the most error-prone tasks in legal billing. When an invoice needs to be split among four payors — one carrying 60%, one at 25%, one at 10%, and one holding the remainder — someone has to do that math. Then someone has to check it. And if the bill gets edited before posting (which happens constantly), someone has to do it again.
Centerbase takes that work off the table completely. Once you've set up your payor schedule, Centerbase handles every split automatically at the invoice level. When a bill generates, the system divides the total among your payors according to their assigned percentages. No calculator required. No manual entry. No second-check.
Two tools in the Multi-Payor setup make configuration fast and accurate. Distribute Evenly assigns equal percentages across all payors with a single click — useful for co-defendant matters where each party carries the same share. Match Remaining automatically adjusts the last payor's percentage when allocations are slightly over or under 100%, so everything balances without manual correction.
You also designate a Primary Payor to receive rounding remainders — those fractions of a cent that don't divide evenly across payors. It's a small detail, but it's the kind of detail that creates reconciliation headaches when it's handled inconsistently. With a designated Primary Payor, every invoice closes clean.
And if a bill is edited before it's posted — a line item is adjusted, a write-down is applied — the splits recalculate automatically. The payor schedule stays intact. Your billing team doesn't need to do anything.
Distribute Evenly — one click for equal splits
Match Remaining — automatic correction when percentages are off
Primary Payor — designated recipient for rounding remainders
Dynamic recalculation — splits update automatically if a bill is edited before posting
3. Give Every Role a Complete View of Matter Financials
Multi-payor matters create visibility problems that go well beyond the billing team. When financial data is split across a practice management system, a spreadsheet, and whatever someone's memory holds about a carrier's payment history, it's hard for anyone — billing manager, attorney, partner, finance lead — to get a clear picture of where a matter actually stands.
Centerbase's Multi-Payor tab addresses this directly. Every matter with a multi-payor configuration gets a dedicated tab that functions as a real-time financial ledger. It shows what's been billed to each payor, what's been paid, and what the current balance is — updated automatically with every billing run and every payment posted.
When a bill is generated, the financial summary on the bill itself shows the first five payors and their billing percentages. A link from that summary goes directly to the full Multi-Payor tab for the complete payor breakdown, including previous balances, current charges, payments applied, and credits. Attorneys reviewing a matter before a client meeting can pull up the tab and see the actual financial picture — not an estimate, not a number from a two-week-old spreadsheet.
Every payor's balance, payment history, and billing percentage — visible in a single tab, updated in real time.
For finance and accounting teams, the AR Aging report reflects multi-payor matters accurately. Each payor is treated as a client for reporting purposes, so payor-level balances appear in full — what's owed, what's been collected, and what's outstanding. The result is audit-ready AR data that doesn't require a manual reconciliation step before it can be trusted.
One nuance worth noting: if your team groups the Aged AR report by Invoice, it will display the client assigned to the matter rather than individual payors. Grouping by payor or by matter gives you the full payor-level breakdown.
4. Manage LEDES Submissions Per Payor Without Duplicate Setup
For firms that do insurance defense work, LEDES e-billing adds another layer of complexity to multi-payor matters. Each carrier may require a different LEDES format. Each carrier has its own Client Matter ID. And historically, getting all of that configured correctly has required either extensive manual coordination or opening support tickets every time a carrier changes their requirements.
Centerbase connects Multi-Payor Billing and LEDES configuration in a way that eliminates most of that friction.
When you set up a payor in your Multi-Payor configuration, you can assign a unique Client Matter ID directly to that payor. That ID flows automatically into the LEDES template mapping table — no separate entry, no crosswalk between systems. Set it up once in Multi-Payor and it's available when you're mapping LEDES fields.
Each payor can also be assigned their own LEDES template and delivery address. In the gear icon settings next to any payor, you can uncheck Use Client Settings and configure that payor independently. A matter with four insurance carriers can run four different LEDES formats, each mapped to the correct Client Matter ID — all from a single configuration screen.
The LEDES Template Builder in Centerbase takes this further. When a carrier changes their format requirements — which happens with regularity in insurance defense work — your e-billing coordinators can build and publish an updated LEDES 1998B template themselves, directly from System Settings → Electronic Billing → Self-Serve Templates. No support ticket. No billing hold while you wait. Templates are validated before publishing, so configuration errors are caught before they reach production. Existing system-provided templates are untouched.
Unique Client Matter IDs per payor — assigned in Multi-Payor setup, auto-populated in LEDES mapping
Per-payor LEDES template and delivery address — configurable independently for each payor
Self-serve Template Builder — build and publish LEDES 1998B templates without a support ticket
Smart validation — templates are checked before save, preventing production errors
5. Simplify Payment Posting and Credit Application Across Payors
Receiving and applying payments on multi-payor matters has always required careful attention. Post a payment to the wrong payor and the AR won't reconcile. Apply a credit at the wrong level and it either disappears or shows up where it shouldn't. In a system that wasn't built for multi-payor billing, these are manual checks that happen every time.
Centerbase handles payment allocation with straightforward, explicit controls. When recording a payment, you select the client as usual — all bills, including multi-payor ones, appear in the payment screen. If you're working directly from the Multi-Payor Matter record and need to allocate to a specific payor, you select that individual payor. The selected payor's balance updates immediately. There's no ambiguity about where the payment went.
Credits work at two distinct levels, and the distinction matters for multi-payor matters. Credits assigned at the matter level apply only to that matter. Credits assigned to the client are available across all of that client's matters. This means a billing manager can apply a credit from one payor to a specific matter without it affecting other matters, or apply a client-level credit that flows wherever it's needed.
Post a payment, select the payor, and the balance updates immediately. No manual ledger step. No reconciliation required.
The result is a payment workflow that's faster and less prone to error. And because every payment is recorded against the correct payor in Centerbase, the AR Aging report stays accurate without any additional reconciliation work from your team.
The Bottom Line
Multi-payor billing is genuinely complex work. Multiple funding sources, dynamic splits, payor-specific LEDES requirements, and AR reporting that needs to reflect every obligation accurately — the underlying complexity isn't going away. The question is whether your practice management system is absorbing that complexity or passing it back to your billing team as manual work.
Centerbase's Multi-Payor Billing is built to absorb it. Payor schedules are defined once and tracked automatically. Splits calculate at the invoice level without manual intervention. AR reporting reflects every payor's balance without reconciliation. LEDES configuration flows from Multi-Payor setup without duplicate entry. And payments post to the right payor with immediate balance updates.
For billing managers, that means fewer manual steps and fewer opportunities for error. For finance and accounting teams, it means AR data that can be trusted without a second pass. For partners and attorneys, it means matter financials that are visible and complete. And for e-billing coordinators handling insurance carrier requirements, it means LEDES templates they can update themselves the same day a carrier changes their format.
Multi-Payor Billing is available now in Centerbase. No migration required. Setup starts at Matter → Cog → Split Billing → Multi-Payor. Your Customer Success Manager can walk your team through configuration in a single session.
Centerbase provides cloud-based legal software that centralizes all aspects of law firm management, including billing, accounting, timekeeping, matter and document management, automated workflows, and profitability reporting. Designed for mid-size law firms, Centerbase helps firms modernize operations, optimize productivity, and improve client service. For more information, visit centerbase.com.
Law firms are under more pressure than ever to operate like modern businesses while still preserving the professional and regulatory structure that makes the legal industry unique. That tension is one reason Managed Services Organizations, or MSOs, are drawing so much attention right now.
In a recent webinar, Cecy Graf, Co-Founder & Chief Executive Officer of Federate Legal, broke down what MSOs are, how they differ from alternative business structures, and why firms of all sizes are beginning to explore them as a way to create more flexibility on the business side of law.
Here are the key takeaways.
What is a Managed Services Organization?
At its core, a Managed Services Organization is a separate entity that provides business services to a law firm. Those services can include functions like finance, billing, IT, HR, and operations. What an MSO does not do is provide legal services.
That distinction matters.
Rather than embedding all business operations inside the partnership itself, an MSO separates those operational functions into a dedicated structure designed to run more consistently and scale more effectively. The law firm continues practicing law. The MSO supports the business side.
As Cecy explained during the webinar, this is not about replacing the law firm model. It is about creating a structure around the law firm that can better support the growing operational demands firms face today.
Why law firms are structurally different from other businesses
To understand why MSOs are gaining traction, it helps to start with the law firm model itself.
Law firms do not operate like most other businesses. Because of professional and regulatory constraints, non-lawyers generally cannot own law firms. That means most firms operate as partnerships, with profits distributed to partners rather than retained and reinvested in the business the way they might be in a traditional corporation.
That structure has worked for a long time, but it also creates limitations.
Decision-making is often decentralized. Capital does not accumulate in the same way it does in other industries. Revenue stays closely tied to billable work. And investments in infrastructure, systems, and business operations often compete directly with partner distributions.
The result is that firms can be highly successful, but still face structural friction when it comes to scaling, standardizing, and making sustained long-term investments.
Why the traditional model is feeling pressure now
Those structural limits are becoming harder to ignore because the business environment around law firms has changed.
Clients expect greater efficiency, transparency, and consistency. Technology costs continue to rise. Cybersecurity, data management, and talent strategy are now core business needs, not optional enhancements. Firms are managing more offices, more systems, and more complexity, often without the centralized operating model needed to support them.
At the same time, law firms are no longer competing only with other firms. Alternative legal service providers and technology companies are entering the space with different ownership models, more centralized operations, and greater freedom to invest in infrastructure.
According to Cecy, the issue is not that firms are incapable of improving operations internally. They can and they do. The issue is whether those improvements can be sustained over time and at scale within the traditional partnership model.
That is where MSOs come in.
MSO vs. shared services: what is the difference?
Many firms already use some form of shared services. Finance, IT, HR, and other functions may be centralized across offices or business units. That can create real efficiencies, but it is still happening inside the same law firm structure.
An MSO goes further.
While shared services consolidate work, an MSO changes how that work is governed, funded, and managed. Those functions move into a separate business entity with its own operating structure and defined service relationship with the law firm.
That structural distinction gives firms the opportunity for more centralized accountability, more consistent investment, and greater long-term scalability.
In other words, shared services can improve how a firm runs. An MSO can change how the business side is built.
Why MSOs create more flexibility for firms
One of the major themes from the webinar was that MSOs are not just about efficiency. They also open up options that are difficult or impossible to create within the traditional law firm model.
For example, ownership in a law firm is typically tied to active partners. As partners retire or leave, ownership changes. That can affect continuity, leadership stability, and long-term planning.
An MSO can create a different kind of continuity. Because it is separate from the law firm itself, ownership can persist beyond someone’s active role in legal practice. It can also include non-lawyer leadership, creating opportunities to better align operations professionals with the long-term success of the business.
That does not change ownership of the legal practice. But it can change how the business side is built, incentivized, and sustained.
MSOs are not the same as alternative business structures
One of the clearest points Cecy made was that MSOs and alternative business structures are not the same thing.
That distinction is critical.
An Alternative Business Structure (ABS) allows non-lawyers to own or hold a stake in the entity that delivers legal services. That is a regulatory shift and is only permitted in certain jurisdictions, such as Arizona.
An MSO, by contrast, does not practice law. It provides business support services to the law firm while operating within existing ownership rules.
The two models can coexist. In some cases, firms operating under an ABS may also establish an MSO to manage the business side. But they are fundamentally different structures.
As Cecy noted, while ABSs generated significant attention over the past few years, much of that excitement is beginning to shift toward MSOs because they are often a more practical option with fewer regulatory complications.
What different MSO models can look like
There is no one-size-fits-all MSO model. Firms can structure them in several ways depending on size, goals, and appetite for complexity.
A single-firm MSO is created by one firm to support its own operations. It is intended to serve only that firm and its related entities.
A multi-firm MSO supports several firms through one shared managed services platform. This is the model Federate Legal uses. It can create economies of scale and give smaller firms access to resources they might not be able to afford or build on their own.
A private equity-backed MSO introduces outside capital to help fund growth, technology, and operational investment.
There are also hybrid approaches, depending on what the firm is trying to achieve.
According to Cecy, many firms are starting with the simplest version: a single-firm MSO.
Why private equity is interested in MSOs
MSOs have become closely associated with private equity, largely because they offer a path for outside investors to participate in the legal industry without directly investing in the practice of law.
Private equity firms are drawn to the legal market for several reasons. It is highly fragmented. Many firms are independently building the same back-office infrastructure over and over again. Operational performance varies widely across billing, collections, IT, and data management. And many of these functions are recurring, routine, and ripe for optimization.
From a private equity perspective, that looks less like a traditional law firm challenge and more like a platform opportunity.
Private equity brings capital, operational discipline, and experience building scalable businesses. That can help firms invest in infrastructure, technology, and talent without relying entirely on partner contributions.
But those benefits come with trade-offs.
Outside capital is not neutral. Investors expect returns, timelines, and performance. That can create tension in an industry where decision-making has traditionally been driven by partner relationships, autonomy, and professional judgment rather than centralized operational metrics.
Do firms need private equity to benefit from an MSO?
No.
That was one of the most important takeaways from the webinar.
A firm does not need private equity to benefit from an MSO structure. The real value of an MSO comes from the structure itself, not necessarily from outside funding.
A firm can use an MSO to create more disciplined operations, better technology decisions, stronger billing processes, and a more scalable business model without bringing in external investors.
Private equity may accelerate the process, but it is not required.
As Cecy emphasized, one of the biggest misconceptions in the market today is the idea that MSO automatically means outside investment. It does not. A firm’s MSO can remain wholly owned by the partnership if that is the right fit.
Which firms are most likely to benefit?
While firms of many sizes are exploring the concept, Cecy said the strongest traction right now is among firms in the roughly 30 to 200 attorney range.
These firms are often large enough to feel the strain of operational complexity, but still nimble enough to rethink their structure and adopt new models. For very small firms, a dedicated MSO may not make sense, though shared-service or multi-firm models can still be attractive. At the very largest firms, the conversation is often more complex and may take a different form.
What should firms do first?
For firms hearing about MSOs for the first time, the first step is not to jump into a new structure.
It is to look inward.
Cecy recommended starting with an internal diagnostic. Where is the firm struggling to stay ahead? Where does it want to invest but cannot? Where are there persistent challenges around technology, implementation, billing, HR, or operations? Where is performance inconsistent in ways that should be predictable?
Those questions help identify whether the current structure is still sufficient and where an MSO model might create the most value.
The bottom line
Managed Services Organizations are gaining momentum because they offer law firms something they increasingly need: a more flexible, sustainable way to build and manage the business side of law.
They are not the same as private equity. They are not the same as alternative business structures. And they are not a magic fix for every operational challenge.
But for firms facing growing pressure to invest, standardize, and scale, they may offer a powerful new option.
As Cecy put it, the real question is not whether firms can improve operations inside the traditional law firm model. It is whether they can do it consistently, at scale, and over time.
That is the distinction that matters.
Want to keep the conversation going?
If your firm is beginning to think about operational structure, investment strategy, or how to support long-term growth, understanding the MSO model is a smart place to start.
About Centerbase
Centerbase provides cloud-based legal software that centralizes all aspects of law firm management, including billing, accounting, timekeeping, matter and document management, automated workflows, and profitability reporting. Designed for mid-size law firms, Centerbase helps firms modernize operations, optimize productivity, and improve client service. For more information, visit centerbase.com.
Media Contact: Trish Stromberg trish.stromberg@centerbase.com
Centerbase IQ™ brings natural language business intelligence directly to law firm leaders. No report requests, no waiting, no guesswork.
Dallas, TX, April 13, 2026 —
If you've ever needed to know how your firm was really performing: collection rates by practice group, which attorneys have WIP aging past 60 days, which matters have deadlines creeping up, you know the drill. Submit a report request. Wait for it to be built. Receive information that may already be out of date.
That experience is about to change.
Centerbase has just announced Centerbase IQ™, an AI-powered natural language decision support capability embedded directly within the Centerbase platform. Debuting at the 2026 Association of Legal Administrators Annual Conference & Expo, IQ gives firm leaders (managing partners, firm administrators, and practice group heads) fast, visual, citation-backed answers drawn from the billing, financial, matter, and productivity data already living inside Centerbase.
In short: you ask a question in plain English, and you get an answer. Right now. From your own firm's data.
What Is Centerbase IQ™?
Centerbase IQ™ is a purpose-built AI intelligence layer on top of the Centerbase legal operating platform. Instead of running static reports or digging through dashboards, firm leaders simply type a question ("Who are our top 10 clients by revenue?" or "Show me AR aging over 90 days") and IQ responds with interactive charts, filterable data tables, narrative analysis, and cited sources.
The technology draws from four data sources simultaneously: your live SQL database, narrative embeddings, document search, and built-in legal research through CourtListener. Every answer cites exactly where the information came from, so the managing partner in the boardroom knows they can trust the number in front of them.
Key Benefits at a Glance
Here's what Centerbase IQ™ delivers to your firm, from day one:
Natural Language Queries: Ask questions in plain English. No SQL, no report builder, no help ticket required. IQ understands what you're asking and fetches the answer instantly.
Visual Outputs: Answers aren't just text. IQ returns interactive bar charts, pie charts, and data tables formatted for executive-level decision making. Copy it, share it, act on it.
Citation-Backed Responses: Every answer shows its work. Users see exactly which source records, documents, or data points were used to generate the response. Transparency is built in, not bolted on.
Real-Time Data: Data syncs directly from your live Centerbase instance. Matters, billing entries, contacts, trust accounts, and payments are always current. No more waiting on last month's report.
Document Intelligence: Connect your DMS and IQ searches across PDFs, contracts, and filings alongside structured billing and matter data. Find the clause you need without leaving the platform.
Built-in Legal Research: Search judges, dockets, and case law via CourtListener directly from the IQ chat. Get judicial history and court opinions without switching systems.
Pre-Built Question Categories: Ready-to-go queries covering Firm Health, Matters, Financials, WIP & Billing, and more mean your team gets value from minute one. No configuration required.
Enterprise-Grade Security: AES-256-GCM encryption, tenant-isolated databases, and full audit trails. Your data never touches another firm's, and it is never used to train AI models.
The Value Proposition: Intelligence, Not Just Data
Most legal practice management systems were built before AI existed. Their "analytics" features are canned reports and pivot tables. They tell you what happened, but they can't tell you what it means.
Centerbase IQ™ is different. It understands your question, queries your live data, generates interactive visualizations, and cites every source. The result is answers you can act on, not data you have to interpret.
As Michael Dunn, CEO of Centerbase, put it: "Managing partners should not need a help ticket to understand how their firm is performing."
That philosophy is central to everything IQ does. It also reflects a broader commitment to trust. Scott Cormier, Centerbase's Chief Product Officer, noted: "With Centerbase IQ™, we are not asking firm leaders to trust a black box. We are showing them both the answer and the source."
For midsize firms especially, that trust matters. These firms are expected to operate with the same strategic visibility as large firms, but with leaner administrative teams. When questions go unanswered or critical data is buried in a report queue, decisions get made with incomplete information. Centerbase IQ™ was purpose-built to close that gap.
Why Your Firm Will Want This
Think about the questions your firm wrestles with week to week. Which practice groups are most profitable? Which clients represent the highest concentration of WIP risk? Which attorneys are exceeding realization targets, and which need a conversation? Which matters have deadlines sneaking up in the next 30 days?
Today, getting answers to those questions might take days. With Centerbase IQ™, it takes seconds.
Beyond speed, consider the confidence factor. When you walk into a partner meeting or board session, you want to know your numbers are right. Centerbase IQ™'s citation-backed approach means you're not just presenting a figure; you're presenting a figure with a source. That's a different kind of credibility.
And for firm administrators, IQ reduces the administrative burden of building one-off reports for leadership. Instead of responding to ad-hoc data requests, administrators can focus on higher-value work while managing partners get their answers directly.
This is also just the beginning. Centerbase plans to expand Centerbase IQ™ with proactive insights, deeper agentic AI to power automated workflows, and additional data sources over time. What launches today is already a meaningful leap forward, and the roadmap points toward even greater capability.
Ready to See It for Yourself?
Centerbase IQ™ is available now for a demonstration. If you're a midsize law firm that wants to move from reactive reporting to real-time intelligence, this is worth a look.
Centerbase IQ™ debuted at the 2026 ALA Annual Conference & Expo (Booth 231) in National Harbor, Maryland, April 12–15, 2026.
About Centerbase
Centerbase provides cloud-based legal software that centralizes all aspects of law firm management, including billing, accounting, timekeeping, matter and document management, automated workflows, and profitability reporting. Designed for mid-size law firms, Centerbase helps firms modernize operations, optimize productivity, and improve client service. For more information, visit centerbase.com.
Media Contact: Trish Stromberg trish.stromberg@centerbase.com
Law firm billing is more than just an administrative function. It's also the engine that drives profitability, sustainability, and client trust. The way a firm bills its clients can impact everything from cash flow to client retention, but it’s not always a straightforward process. Thankfully, organized processes, technology, and automation can help your firm develop a workflow that’s best for your staff and clients.
So whether you're refining your current billing processes or building a system from the ground up, understanding the ins and outs of law firm billing is essential for your firm’s success. This guide will walk you through the most common billing models, best practices for accurate and efficient billing, and the tools that modern firms are using to get paid faster and with less friction.
Main Takeaways
Law firm billing structures vary by practice type and client needs, with hourly, flat fee, contingency, and retainer-based models being the most common. Each type offers various advantages depending on your practice area and client needs.
Billing best practices, including detailed invoicing, automated time-tracking, and flexible payment options, can improve your billing efficiency and cash flow.
Setting the right rates requires balancing market benchmarks with overhead costs and client expectations and reviewing your pricing strategy regularly.
Legal invoices must meet compliance standards and be professionally presented to foster trust.
Law firm billing is the structured processes and systems used to track, record, and charge clients for legal services rendered and expenses incurred. This includes time tracking, invoicing, payment collection, and ensuring compliance with ethical and regulatory guidelines. Done right, law firm billing goes beyond charging clients to enhance the entire client experience and provide the financial backbone of a law firm.
Types of Billing Structures Used by Law Firms
Different types of legal work call for different billing approaches. Law firms choose billing structures based on the nature of the case, the client's needs, and the predictability of the workload. Each structure has its own advantages and is better suited for certain practice areas or matter types.
Hourly Billing
Hourly billing is the most traditional and widely used model in the legal industry. Attorneys and staff track their time spent on client matters in increments (typically six-minute intervals) and charge clients based on predetermined hourly rates. This model works well for complex litigation, corporate matters, or cases where the scope of work is difficult to predict in advance. But, it can lead to client concerns about transparency or escalating costs.
Flat Fees
Flat fee billing involves charging a predetermined amount for a specific service, regardless of the time it takes to complete. This model is commonly used for routine, predictable legal matters like drafting wills, forming LLCs, or handling uncontested divorces where the work involved is fairly standardized. Flat fee billing enhances pricing predictability for clients and reduces billing disputes.
Contingency Fees
Under contingency fee arrangements, clients pay only if the firm wins the case, typically as a percentage of the settlement or judgment amount in personal injury or other litigation cases. This structure aligns the attorney's and the client's interests, making legal services accessible to clients who couldn't otherwise afford representation; however, it also requires firms to bear the financial risk of the case.
Retainer-Based Billing
With retainer-based billing, clients make advance payments to secure legal services for ongoing or future work. These funds are typically held in a trust account and drawn against as services are performed. Retainer arrangements offer predictable revenue for firms and are often used for corporate clients or ongoing advisory relationships.
Best Practices for Law Firm Billing
Adopting law firm billing best practices increases operational efficiency, fosters client trust and reduces the chance of payment delays or disputes. The following can establish a strong billing practice for your firm.
Develop Transparent & Detailed Invoices
Clients expect clear, easy-to-understand invoices that reflect the value of the services provided. Each invoice should include itemized charges with descriptive time entries to ensure clients know exactly what they're paying for. This level of transparency reduces disputes, builds trust, reinforces your firm’s brand, and increases the likelihood of your clients paying promptly.
Streamline the Billing Workflow
Automating manual billing processes through software that integrates with timekeeping, matter management, and accounting minimizes manual work and errors. Once you have a standardized workflow with clear responsibilities for time entry, pre-bill review, and invoice distribution, the legal billing software creates a seamless system from time entry to invoice generation to approvals and improves your firm’s cash flow and profitability.
Optimize Tracking of Billable Hours
Accurate time tracking is crucial to capture all billable work, maximize revenue, and ensure fair billing. Implement user-friendly digital tools so attorneys can log time in the moment, which avoids delays in time entry, helps capture more billable hours, and improves the accuracy of invoices. Advanced technology solutions with automated time capture can even help attorneys reclaim previously unbilled time spent on emails, calls, and document preparation.
Ensure Compliance with Legal Billing Guidelines
Firms must adhere to industry regulations, client-specific billing rules, and jurisdictional requirements to maintain ethical billing practices. Legal billing guidelines, such as Uniform Task-Based Management System (UTBMS) codes and LEDES formats, ensure billing data is consistent and auditable. Audit your billing practices regularly to help identify compliance issues before they become problems with clients or regulatory bodies, because non-compliance can lead to rejected invoices and reputational damage for your firm.
Offer Flexible Payment Options
Clients today expect the same payment convenience from their law firm that they receive from other service providers. Offering multiple payment methods including credit card, ACH, and payment plans enhances this convenience for clients and accelerates your collection rate. And offering flexible payment options demonstrates your responsiveness to client needs and supports long-term client relationships.
How to Set Your Law Firm’s Rates
Determining the right pricing structure for your legal services is key to maintaining profitability, competitiveness, and transparency. It’s a process that requires balancing market expectations, firm costs, and value delivered to clients.
Understand Market Benchmarks
Start with a thorough analysis of what similar firms in your area and practice specialty (or specialties) are charging by reviewing industry surveys and reports and collecting data on your competitors. Benchmarking against local and national data gives you the context needed to help you avoid underpricing or overpricing your services and positions your firm strategically.
You should also review your firm’s internal data to ensure billing rates are appropriate for different case types, attorneys’ time is being used effectively, and each practice area is as profitable as possible.
Factor in Firm Overhead Costs
To set sustainable rates, firms must consider their cost structure, including rent, staff compensation, malpractice insurance, and software subscriptions. Understanding your overhead ensures your rates cover expenses while generating profit. Your billing rates must cover both direct attorney time and the proportional overhead expenses required to operate your firm.
Determine Hourly vs. Alternative Fee Arrangements
Evaluate whether to use hourly rates, flat fees, or contingency models based on the predictability and complexity of each matter type. Practice areas with highly variable scope (like complex litigation) may benefit from hourly billing, while routine matters (like estate planning) might be better suited for flat fees.
Customize Rates for Clients and Matters
Offering alternative fee arrangements can improve client satisfaction and differentiate your firm from competitors. Tailor your pricing based on the unique attributes of each matter or client. High-volume clients or long-term partnerships may warrant discounted rates, while complex litigation might justify premium pricing. This type of strategic pricing can optimize value for your clients and profitability for your firm.
Regularly Review and Adjust Rates
Rates shouldn’t remain static. Monitor inflation, economic trends, and changes in your service delivery model. An annual review allows you to adjust pricing strategically and communicate value to clients.
Key Legal Invoice Requirements
Compliant and professional invoices help law firms get paid faster and reduce the risk of client dissatisfaction or audits. Consider the following best practices.
Essential Invoice Components
Client and matter information
Service date(s)
Timekeeper name and role
Description of tasks performed
Time spent on each task
Hourly rates or agreed-upon fees
Subtotals and totals
Payment terms and due date
Compliance with Legal Billing Guidelines
Clear and consistent billing reduces the likelihood of disputes and ensures smoother payment processing.
Invoices should meet state bar regulations and client-specific requirements, including the use of approved task codes and formats and detailed activity descriptions. If you’re working with insurance defense or corporate clients, familiarize yourself with their outside counsel guidelines, which may dictate specific formatting, coding systems, and billing practices.
Standardized Invoice Presentation
Using a consistent template across all invoices reinforces professionalism and brand identity and reduces confusion for clients. Create a standardized process for preparing and reviewing invoices to ensure all necessary elements are included and properly formatted before delivering them to clients. A uniform format helps clients understand and pay invoices more easily, decreasing administrative back-and-forth.
Common Legal Billing Challenges
Legal billing challenges commonly stem from overburdened staff who are pulled in multiple, non-revenue-generating directions. Here’s a look at a few of the most common challenges related to law firm billing.
Inefficiency and Lost Time
Manual data entry, redundant workflows, and disconnected systems can easily drain staff time and reduce productivity. Re-entering information across spreadsheets, paper forms, and billing tools is tedious and increases the risk of errors and delays. But integrated software that syncs across systems eliminates double work and can help firms reclaim billable hours.
Poor Visibility and Communication of Write-Downs
Unclear billing practices and vague invoices confuse clients and can lead to disputes, prompting firms to issue write-downs to preserve relationships. You can avoid undervaluing your firm’s services by communicating proactively about billing frequency and expectations. The more transparent you are about your billing process, cycles, and itemization, the more you foster client trust and reduce revenue loss.
Keeping Track of Law Firm Billing Codes
With the shift toward flat fees and subscription models, proper use of UTBMS billing codes has become essential. These codes standardize invoices, improve clarity for clients, and streamline internal approval processes. Firms that implement structured billing codes reduce confusion and align more efficiently across teams.
Billing Descriptions
Generic or vague billing entries can lead to client dissatisfaction and erode trust in your firm’s transparency. Descriptions like “Call: 30 minutes” lack context and fail to convey value. Specific, date-tagged entries that explain the legal work performed enhance clients’ understanding and demonstrate the impact of each service.
How to Improve the Law Firm Billing Process
Streamlining your billing processes frees up valuable time for higher-value, billable work while improving cash flow and client satisfaction. Here are practical ways to optimize billing productivity.
Automate Time Tracking & Invoicing
Implementing software that automates time tracking and integrates it with invoicing can ensure all billable time is captured and save hours of administrative work each month. Your billing cycles will be faster and contain fewer errors.
Set Up Recurring Payments & Payment Plans
Create automated billing arrangements for ongoing client relationships to ensure steady cash flow without requiring manual intervention. Payment plans can also make legal services more accessible to clients while providing predictable revenue for your firm.
Streamline the Pre-Bill Review Process
Pre-bill reviews don't need to be manual, time-consuming tasks. Implementing electronic pre-bill reviews with workflow automation tools allows attorneys to review, edit or approve time entries before bills are created. This process eliminates the inefficiencies of paper-based reviews, ensures invoices are accurate, and keeps billing cycles on track.
Send Payment Reminders
Having an automated system for sending friendly payment reminders helps ensure clients don’t overlook due dates. Consistent communication about outstanding balances can significantly improve collections, reduce outstanding accounts receivable, and maintain healthy client relationships.
Accept Credit Card Payments
Many clients prefer paying online, and accepting credit card payments makes it convenient for them to do so. Modern legal payment processors will automatically account for clients’ online payments in your general ledger.
Transform Your Law Firm’s Billing Process & Get Paid Faster with Centerbase
The billing practices we've discussed throughout this article represent significant opportunities for midsize law firms to improve efficiency, cash flow, and client satisfaction. By implementing transparent invoices, streamlining workflows, automating time tracking, and offering flexible payment options, your firm can transform billing from an administrative burden into a strategic advantage.
Centerbase empowers law firms to streamline their billing operations with powerful features like multi-matter billing, electronic pre-bill approvals, automated time capture, and online payments—all integrated with robust accounting and matter management capabilities. Our platform reduces administrative overhead and helps firms maintain a steady cash flow while delivering a polished, professional client experience.
What's the Most Efficient Law Firm Billing Approach?
While hourly billing remains common, many firms find that a mix of billing structures (hourly, flat fee, and retainer) allows them to match pricing to matter type and client needs. Efficient billing, regardless of your firm’s fee structure, comes from implementing structured yet flexible processes that include automated time tracking, electronic pre-bill review, transparent and detailed invoices, and flexible payment options. By using legal billing software, firms can reduce administrative work, increase accuracy, and speed up the payment cycle.
How Much Do Law Firms Bill Per Hour?
Law firm hourly rates vary significantly based on location, practice area, attorney experience, and firm size. According to Thomson Reuters' research, law firms have seen record-setting growth in billing rates, with worked rates growing by an average of 6.5% in 2024 compared to the previous year. The largest firms (Am Law 100) led with 8.4% rate growth, while midsize firms averaged 5.6%. A Major, Lindsey & Africa survey found that average partner rates at large firms reached $1,114 per hour in 2024, with top firms charging $2,500+ for senior partners. For midsize firms, rates are generally lower but still rising steadily. When setting rates, firms should consider local market conditions, overhead costs, and perceived value rather than simply matching competitors' rates.
How Can Law Firms Get Paid Faster by Clients?
To get paid faster, firms should send detailed invoices, automate payment reminders, and offer multiple payment methods. Electronic invoicing with detailed time narratives reduces client questions and disputes. Accepting credit cards and setting up online payments through billing software can significantly shorten the time to payment. And sending invoices within days of work being completed can significantly improve collection speed and overall cash flow.
Family law firms face unique challenges that require innovative strategies to ensure long-term success. In advance of the AAML Annual Meeting in Chicago, Affinity Consulting Group, Centerbase, and 12 AAML fellows discussed how family law practices can adapt to future demands.
The conversation centered around three critical areas: profitability, the transformative role of AI in family law, and cultivating a strong, people-centered firm culture. This summary captures the group’s insights and actionable recommendations, offering a roadmap for family law firms looking to thrive in a competitive and tech-driven future.
Focus on Profitability to Maximize Resources
Profitability is an important measure of success for any law firm because it helps determine how efficiently the firm utilizes resources and how much value it delivers to clients. Measuring law firm profitability requires analyzing the underlying factors that influence profitability’s core components — revenue and expenses — which helps you identify opportunities to maximize profits and make data-driven decisions.
Actions to Take
Enhance Collection Processes: Create or strengthen a collections team to handle outstanding payments, minimizing the need for attorneys to follow up with clients. Use tools to automate alerts for retainer replenishments and overdue accounts.
Implement Clear Payment Policies: Develop a standardized approach that informs clients upfront about retainer requirements and account replenishments.
Introduce KPIs: What gets measured gets done, so establish collection goals (e.g., 90%+ collection rate) to improve financial predictability and accountability.
Leverage Technology: Consider software that offers automated time capture and billing to reduce lost hours. Tools such as Laurel AI or Centerbase’s Automatic Time Capture can help track all billable activities.
Use AI for Good in Family Law Practice
The usage of AI is changing the way attorneys and law firms operate for good. But rather than fearing AI, the mindful adoption of AI offers tremendous promise to enhance the way legal professionals work, reducing tedium in the practice of law while freeing up valuable time for thinking strategically, identifying creative solutions, and engaging thoughtfully with clients. Embracing AI thoughtfully is an act of helping your firm operate in a modern legal landscape.
Actions to Take
Explore Recruiting AI: Use AI-driven tools to scrape platforms like LinkedIn, identifying and compiling lists of qualified candidates without relying on costly recruiting agencies.
Automate Document Review: Use AI tools like Paxton.ai and Co-Counsel to handle initial drafts of discovery summaries, deposition reviews, and document comparisons.
Improve Written Communication: Grammarly and WordRake are tools that can improve clarity and professionalism in client communications.
Make AI Your Thought Partner: Utilize ChatGPT for brainstorming, drafting, and researching by posing prompts such as, “Suggest 5 innovative growth strategies for a family law firm.”
Integrate Time Capture AI: Investigate AI solutions to improve billing accuracy by capturing all activity data throughout the day. This helps avoid revenue loss from unbilled hours.
Foster a Culture that Values Your Firm’s People
Your people are your number one asset. Prioritize onboarding and retention strategies that help you take care of your team and build a strong culture centered on the firm’s values. Implementing these strategies proactively will help safeguard against costly employee turnover and set your firm up for greater success.
Actions to Take
Clarify and Communicate Core Values: Define core values and communicate them regularly across the team.
Onboarding and Training Programs: Build structured onboarding programs for associates, setting clear expectations, goals, and values from day one. Consider implementing a “University” program, where experienced attorneys mentor newcomers and provide training in core legal and business skills.
Host Regular Team Check-Ins: Hold weekly meetings to discuss progress, address challenges, reinforce cultural values, and provide feedback for associates’ development.
Create a Knowledge Library: Develop a knowledge-sharing system with standardized documents and training videos so team members can access firm-specific procedures and templates.
Encourage Peer Learning and Mentorship: Foster an environment where senior attorneys regularly provide feedback and mentorship, enhancing skills and strengthening relationships within the firm.
Embrace Progress to Build Your Firm’s Future
Family law firms have an opportunity to set new standards in how they serve clients, support their teams, and use technology to streamline their operations. Embracing this future requires a commitment to rethinking traditional approaches to profitability, talent management, and the role of AI. Now is the time to assess your firm’s strengths and identify where these strategies can make a meaningful impact.
