Contingency billing occurs when a firm performs work for a client and gets paid contingent upon a settlement. There are many variations for this type of arrangement, such as whether or not costs will be billed, percentage amounts of the settlement, etc. When billing contingency clients, you typically bill them after the case is settled; however, you may also want to bill them during the course of the case. When billing during the case, you may want to bill only expenses or advances. You may also want the client to see the services rendered for a particular time frame without actually billing the fees. Tabs3 allows you to do all of this.

When billing a contingency client during a case, you may want to use a statement template with an Info Only Fee Format. This will show the fee information on the statement but will not bill the fees. Instead, the fee transactions remain as work-in-process until completion of the contingency case. If desired, you can print a statement for a specified date range of fee transactions. The Update Statements program does not update the fee transactions to accounts receivable until a final statement is run with a Standard Fee Format.

If you do not want any fees to be shown on the statement, then use a statement template with a Fee Format of No Fees.

When the case is settled, select a statement template with a Fee Format of Standard. Before printing the statement, you may need to write-up or write-down the fees to the settlement amount using the Write-Up/Write-Down Fees and Costs program.

If you want to send clients a statement showing both services and costs but do not want to bill fees or costs, run draft statements instead of final statements. Printing a draft statement has no effect on the transactions. The reason you normally run final statements instead of draft statements is because you want to bill costs but only show time worked for contingency billings. If desired, the term "Interim Statement" that appears on all draft statements can be edited (or deleted) on Line 3 of the Terminology tab in Statement Customization.

See also:   Methods of Billing