Managing Annual Rate Increases in ProLaw^®

Annual rate increases are a fact of life for every law firm. Whether you're adjusting standard billing rates to keep pace with market trends or implementing negotiated increases for specific clients, getting it right in ProLaw^® is critical. A misstep can mean lost revenue, billing disputes, or hours spent untangling retroactive changes. Here's a practical guide to managing the process smoothly.

Why Rate Management Matters

Rate changes aren't just an administrative task — they directly impact your firm's bottom line. Even a small error, like forgetting to update rates before the new year, can result in weeks of under-billed time. On the client side, transparent and well-timed rate communication builds trust and reduces pushback when invoices arrive.

Step 1: Update Your Rates

ProLaw^® uses rates to determine how time entries are valued. To update rates for the new year:

1. Navigate to Dashboard – Tools – Setup – Rates.
2. Select the rate schedule you want to modify (e.g., your firm's standard rates).
3. Update the rates for each timekeeper or timekeeper class as needed.

Step 2: Set Effective Dates

One of the most important — and most overlooked — details is setting the effective date on your rate changes. This ensures that new rates apply only to time entries recorded on or after that date, while entries before the cutoff remain at the prior rate.

• When creating or editing rate entries, specify the effective date (e.g., January 1 of the new year).
• ProLaw^® will automatically use the correct rate based on the date of the time entry.
• It may be a good idea to verify by entering a test time entry dated before and after the effective date to confirm the correct rate is applied.

Step 3: Handle Multiple Rate Schedules

Most firms don't have a single flat rate for every client. You may need to manage several schedules:

• Standard rates — your firm's default billing rates for each timekeeper level.
• Discounted rates — negotiated rates for high-volume or long-standing clients.
• Client-specific or matter-specific overrides — custom rates set at the matter or client level that take precedence over the standard rates.

Review each of these schedules during the annual increase process. It's easy to update the global rates and forget that certain clients have matter-level rate overrides that won't change automatically.

Common Pitfalls to Avoid

1. Retroactive rate changes. Changing rates without setting an effective date can retroactively reprice unbilled time entries. Always use effective dates to prevent this.
2. Forgetting matter-level overrides. If a matter has a rate override, updating the standard rates alone won't affect it. Run a report to identify matters with custom rate assignments and update them individually.
3. Not communicating changes before billing. Clients should never be surprised by a rate increase on an invoice. Send written notice well in advance — ideally 60 to 90 days before the new rates take effect.
4. Skipping validation. After making changes, run a test billing or prebill to confirm the new rates are flowing through correctly before the first real billing cycle of the year.

Tips for Communicating Rate Changes

• Send a formal letter or email to clients explaining the new rates and when they take effect.
• Frame the increase in context — reference market benchmarks, added expertise, or expanded services where appropriate.
• For clients with negotiated rates, have a separate conversation and be prepared to discuss the value your firm provides.
• Keep a record of all rate-change communications in ProLaw^® or your DMS for future reference.

Rate increases don't have to be stressful. With a clear process in ProLaw^® and proactive client communication, you can start the new year with accurate billing and strong client relationships. If you need help configuring rates or automating parts of this workflow, reach out to our team — we're happy to walk you through it.