Block Billing Explained: How It Works and Why Your Business Should Use It

Clients and businesses are turning towards block billing as an alternative to hourly billing because it is simpler and more reliable.

You will discover in this guide how block billing can be useful, how the process works, and what sets it apart.

What Is Block Billing?

🔍In law and some other kinds of work, multiple tasks completed in a period can be placed under one time entry and billed this way using block billing.

Rather than have three separate lines for reviewing, drafting, and calling, the block billing example implies you could write 'reviewed documents, drafted motion, and made a client call – 3.0 hours'.

How Block Billing Works

💸Block billing is an invoicing strategy where services are packaged into predefined "blocks" of time or work that clients can purchase upfront.

Instead of tracking every minute and billing hourly, professionals sell chunks of their time or expertise at a fixed rate.

Think of it as buying services in bulk – similar to purchasing a gym membership rather than paying per workout.

Here is an example that presents line-item billing vs. block billing

Date: June 25, 2025

Description: Review file, client communication, draft initial pleadings, and conference with co-counsel regarding case strategy.

Time Billed: 4.5 hours

Rate: $350/hour

Amount: $1,575.00

Is attorney block billing acceptable? Let's explore it below.

Why Do Law Firms Use Block Billing?

Block billing is mostly used by law firms for cost control and efficiency. Attorneys can reduce administrative overhead and billing complexity by grouping related tasks into blocks.

⚖️Clients are billed by a law firm in increments of six minutes (0.1 hours).

They combine all of the tasks into a single 0.5-hour block rather than listing them separately (for example, reviewing documents for 12 minutes, writing an email for 6 minutes, and having a brief phone conversation for 8 minutes).

☑️Instead of listing each task individually, the invoice just reads, "Legal consultation and document review – 30 minutes."

Important advantages include:

Simplified invoicing: With fewer line items to examine and handle
Reduced billing disputes: Clients see logical task groupings rather than fragmented entries, which in its turn simplifies financial reporting
Attorney productivity: More billable work results from less time spent on meticulous expense tracking and time keeping.
Competitive pricing: Bundled services often cost less than itemized micro-billing

The Bottom Line: When related jobs are grouped as one entry, data entry takes less time and reduces the overall process of making the bill.

Drawbacks of Block Billing

Among the pitfalls of block billing, the main one is lack of transparency.

• Since the details on tasks aren’t always transparent to clients, it becomes more difficult for them to judge the worth of the work done.
• Ambiguous recordings may cause your client to argue about the bill or refuse to pay for extra work that was not specified in your records.
• Clients, especially those in the corporate and insurance fields, usually require billing that does not use the block system. If you do not follow these, your invoices may be sent back or your fees might be cut.
• The absence of details in the report means that there is a chance of the firm or the clients getting billed wrongly for work done.
• Certain clients or courts cut back block-billed costs by 10-15% because they are worried that these work entries might not be completely reliable.
• Compliance Audit: Block billing makes defending time entries in court reviews or fee audits all but impossible. Particularly in litigation situations, thorough contemporaneous records are frequently needed to support legal fees.
• Inefficient Time Management: Without breaking down tasks, attorneys may not recognize time-wasting activities or inefficient work patterns, leading to reduced productivity and profitability.
• Ethical Concerns: Some jurisdictions and bar associations discourage or prohibit block billing as it may violate ethical rules requiring lawyers to provide clients with sufficient information about fees and services.

When Block Billing Can Be a Problem

In general, block billing makes it hard to find out the time dedicated to a particular task, which may result in a controversial billing situation or even rejection of the attorney billing statement.

Moreover, fees can be reduced by some courts in cases of block billing, especially when the entries appear to be excessive and vague.

Barriers to Block Billing and Solutions

Scope Creep

Clients may request additional tasks, which are not within the boundaries of a single block.

How to Solve It: Formulation of the boundary policies should be contained in advance, and there should be a systematic mechanism for expanding more space by preventing revenue leakage and buying new blocks.

Unused Time

Sometimes, a given organization can fail to utilize all the purchased blocks.

How to Solve It: You need to ensure that you have hard policies that tell people exactly what will happen to the remaining expiry time or whether it is applicable to convert into a refund.

Pricing Accuracy

You might not know about blocked work and its value, and as a consequence, your company can be unsuccessful financially.

How to Solve It: It is important to consider the information that was known in the past and to offer new rates per block by considering the past work that has been done on similar projects.

Client Education

It might happen that clients do not know the meaning of block billing.

How to Solve It: Provide specific information on the good sides of the system and allow people to see its benefits.

💡Although in industries that can skip itemized billing, block billing is welcomed, most professionals frown on such practice, especially in services based on granular time tracking and precise billing entries.

Block Billing Example Scenarios

⚖️ Litigation Scenarios

Scenario 1: Motion Practice

❌ Poor Block Billing Example:

03/15/2025 | Research case law, draft motion for summary judgment, 
            revise pleadings, telephone conference with client 
            regarding strategy, review opposing counsel's discovery 
            responses, prepare for deposition | 8.5 hours | $4,250.00

✅ Correct Itemized Billing:

Scenario 2: Discovery Management

❌ Poor Block Billing Example:

04/22/2025 | Legal research, document review, meet with client, 
            draft discovery requests, correspondence with 
            opposing counsel, case management activities | 6.25 hours | $2,812.50

✅ Correct Itemized Billing:

💼Transactional Scenarios

Scenario 3: M&A Transaction

❌ Poor Block Billing Example:

05/10/2025 | Draft purchase agreement, review due diligence materials, 
            client calls, revise disclosure schedules, negotiate 
            with buyer's counsel, prepare closing documents | 12.0 hours | $7,200.00

✅ Correct Itemized Billing:

Scenario 4: Contract Drafting & Negotiation

❌ Poor Block Billing Example:

06/03/2025 | Review client requirements, draft service agreement, 
            multiple revisions, email exchanges with client and 
            counterparty, finalize terms, prepare execution version | 5.75 hours | $2,587.50

✅ Correct Itemized Billing:

Best Practices for Law Firms Using Block Billing

🎯 Specificity Guidelines

Assess your services: See which services can be bundled into predictable chunks

• Define Clear Terms: Develop policies for “rolled-over time,” scope changes, and expirations
• Be Task-Specific: Each entry should be a description of a single general task
• Outcome-Oriented: Include what was accomplished
• Time-Justified: Time must be sufficiently justified by the task described
• Valuable to Client(s): Do work in a way that advances a client's goal.

📝 Description Standards

• Block Packages: Build 3-5 types of blocks to get started
• Use verbs (such as draft, review, research, analyze)
• Add names of document, page, or scope info
• Design the knowns and unknowns of the study.
• Keep an eye on the deadlines and anything that might be urgent.

If you have that choice, restrict the entries to no more than 3-4 hours each and try to put closely linked tasks together.

⏰ Time Allocation Rules

• Round to 0.1 or 0.25 (hours minimum)
• Track interruptions and context-switching separately
• Separate time spent writing alone from time working with others on the document

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🔍Compliance Considerations

• Court Mandates: Certain federal and state courts have detailed billing requirements that preclude or restrict block billing on fee applications.
• Any Tweaking of Client Agreements: For retainer agreements and billing guidelines, be sure to account for client-specific requirements.
• Standards: Attorney shall comply with state bar billing guidelines and ethical standards in determining that fees are reasonable and the basis for billing is appropriately explained to the client.

Training and Quality Control

• Provide training to junior associates on the correct entry format
• Review billing entries before invoice generation
• Track efficiency and adherence using time tracking software (e.g. TMetric, Clio etc.)

Modern time tracking systems can spot and avoid block billing issues helping everything remain transparent and correct

💡 It's also important to avoid "lawyer talk" that clients won't comprehend.

💡Explain why your study is needed by providing additional context

💡Cite relevant case developments or client matters that generated the work

Time Management Excellence

• Review the history of past projects to estimate average times.
• Use specific task codes or categories for better reporting.
• Monitor both billable and non-billable time to understand your entire workflow
• Automate collection where feasible

Client Communication

• Test With Current Clients: Present the idea to existing clients who trust they can rely on you for your work
• Include an explanation of period billing summaries regularly
• Proactively address prospective time entries: Offer to talk about the significant time entries
• Introduce billing guidelines discussions at the commencement of the engagement
• Publish transparency reports that demonstrate efficiency gains over time

Technology Integration

• Use your firm’s practice management software for uniform formatting
• Capture entries on the fly with mobile apps
• Set up approval processes for high-value records
• Create analytical reports on billing patterns and opportunities for optimization.

💡Even if you bill in large blocks, make sure to keep detailed notes as you work since this will help you answer specific questions from clients.

Conclusion

Block billing is a substantial departure from hourly billing that can be advantageous to clients and legal service providers alike.

Block billing can help businesses expand more effectively while giving customers better value by offering predictable costs, enhanced cash flow, and simplified administration.

The key to successful block billing lies in time tracking, clear communication, appropriate pricing, and well-defined scope boundaries.

When implemented thoughtfully and with the right time tracking tool like TMetric, it can transform how legal professional services businesses operate and scale.

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