One of the main performance measures for Fee earners is “invoice fee allocations” (also known as fee attribution), making this a key performance indicator (KPI) for legal service providers. It represents the financial contribution a fee earner makes to an invoice and is most commonly directly proportionate to the value on the time they record. However, some firms have complex fee allocation rules, for example where a percentage of the invoiced amount is credited to a partner responsible for introducing the client (originator), or an arrangement where trainee fee earners have their credit allocated to their supervisor in recognition of the time spent assisting the trainee.
evergreen defines “invoiced amounts” as the value of professional services invoiced to a client for the following transactions types:
- Time
- Fees (excluding soft disbursements and administration charges).
Parameters
A new parameter “Activate fee allocation” has been introduced in Matter management and accounting parameters to enable this feature.
Matter management and accounting > Setup > Matter management and accounting parameters > Invoice tab > Activate fee allocation
Fee allocation rules
Rules will be defined before invoices are created so that they can make an allocation to respective employees, even if they have not recorded time on any matter. Fee allocation rules can be defined at client, matter contract and matter level. It is possible to create a rule that relates to either:
- A person holding a particular role
- OR a named person
Role based allocations: based on the rule, a specific percentage will be applied to a person holding the role. The available roles are:
- Client relationship partner (Applicable at Client level)
- Matter contract fee earner (Applicable at Matter contract level)
- Matter responsible partner (Applicable at Matter level)
- Matter fee earner (Applicable at Matter level)
- Matter partner (Applicable at Matter level)
The following information will be captured and will only apply to the client, contract or matter selected
- Percentage allocation
- The period during which the allocation applies
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Note – The total of allocation rules defined for specific Client/Matter contract/Matter should not exceed 100% of an invoice’s value. Thus, if there are many rules in the same client/contract/matter hierarchy, validation will prevent rules which, in combination, will exceed 100%. |
Fee allocation rules form in Client
Matter management and accounting > Clients > All Clients > select Client > Client action pane > Fee allocation rules under setup group
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Note – A new option “Show related rules” is available in Client and Matter contract fee allocation rule forms to view all the related rules. |
Fee allocation rules form in Matter contract
Matter management and accounting > Matters > Matter contracts > select Matter contract > Matter Contract action pane > Fee allocation rules under setup group
Fee allocation rules form in Matter
Matter management and accounting > Matters > All Matters > select Matter > Matter action pane > Fee allocation rules under setup group
Fee allocation in invoice proposal
When an invoice proposal is created, draft fee allocations for that invoice are also created. Each fee allocation is made to the fee earner referenced by the hour journal, in proportion to the value of time included in the invoice. The proportion is calculated from the recorded value of hour journals in the invoice (rather than their eventual values in the invoice). However, any pre-existing allocation rules or manual allocations are calculated first and the remaining, unallocated amount, is divided according the invoice proportions.
Fee allocations for a matter level invoice are created whilst it is still a proposal. Once the invoice has been posted, the fee allocations are fixed. However, before the invoice has been posted, it will be possible to modify fee allocations.
Allowable changes will be:
- Add a new recipient
- Removing an added recipient
- Configure the new recipient by recording a fee allocation share as a percentage
- A new recipient can also be a person who has recorded time on the invoice
It will not be possible to alter any of the automatically calculated fee allocations that are based on the value of time journals in the invoice.
Adding one or more recipients will have the following consequences for the other fee earners who have recorded time on the invoice
- For people who have recorded time on the invoice, in percentage terms, the available time recording allocation for them will be:
100% – (the percentage allocations of the new recipients) - This percentage amount will be shared between the allocations of the time recorders, in proportion to the recorded value of their work
- A person added as a recipient may also have recorded time on the invoice. If so, their total allocation share will be:
Summary tab displays Fee earner allocation amounts
Current tab display Matter and Fee earner wise allocation amount and percentages. Each set of records will be created with different allocation types and status.
Manual allocation tab contains fee earner and percentages to apply allocation to new or existing fee earners
Allocation rules tab contains rules detail which is applied for respective invoice proposal
History tab is same as current tab, Date and time creations and username will be additional in history tab. Different records will be created for each action
Credit note
If an invoice is fully or partially credited, the associated fee allocations should be reversed by an amount equal to the value of the credit note. In the interest of a good audit trail, a fee allocation reversal would be recorded as change caused by a credit note.
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Note:
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Fee allocation Inquiry
Fee allocation inquiry allows the fee earners to view their/ team members fee allocations for a specific period. This inquiry can access from,
- Employee self-service workspace
- Fee allocation summary (Matter level)
Go to Workspaces > Employee self service
Fee allocations summary from Matter
Go to Matter management and accounting > Matters > All Matters > select matter > Manage action pane > Fee allocation summary under related information group.
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