Legal Services Invoice Example: Fees, Costs and Trust Funds

The worked example below is one month's invoice on one matter. It combines a flat fee, hourly time and costs the firm paid on the client's behalf, and it shows the trust activity line by line. The second half explains the rule behind each choice. The most common error in published legal invoice samples is telling the client to pay an invoice for completed work into the firm's client trust account. That money already belongs to the firm. Depositing it in trust mixes the lawyer's funds with client funds, which Rule 1.15 forbids except to cover bank charges.

Worked example: one month's invoice for one matter

Everything here is fictional: the firm, the client, the rates and the matter. The arithmetic is real, and you can swap in your own numbers.

Engagement terms (from the signed engagement letter, September 2, 2026):

Flat fee of $2,500 for reviewing the lease renewal and delivering a written redline memo. Paid in advance and held in trust until the memo is delivered.
Hourly fees for negotiating with the landlord: partner $350, associate $225, paralegal $120 an hour.
Advance deposit of $2,000 held in trust as security for hourly fees and costs. The client agrees to bring it back up to $2,000 after each invoice.
The firm may withdraw earned fees and incurred costs from trust when it sends the invoice that describes them.

Field	Details
From	Harlow & Pine PLLC, 410 Market Street, Suite 300, Springfield, billing@harlowpine.example
To	Northfield Bakery LLC, attn. Dana Reyes, Managing Member
Invoice number	HP-2026-0142
Invoice date	October 1, 2026
Due date	October 31, 2026 (net 30)
Matter	2026-014, Northfield Bakery LLC: commercial lease renewal
Period	September 2 to September 30, 2026

#	Description	Qty	Rate	Amount
1	Flat fee: lease renewal review and redline memo (delivered September 18)	1	$2,500.00	$2,500.00
2	A. Harlow, partner: calls and correspondence with landlord's counsel on renewal terms	4.2 hrs	$350.00	$1,470.00
3	M. Pine, associate: research on the renewal-option clause; draft counter-proposal	6.5 hrs	$225.00	$1,462.50
4	T. Okafor, paralegal: request recorded lease; assemble exhibits	2.0 hrs	$120.00	$240.00
5	Cost advanced: county recorder records search fee (receipt attached)	1	$150.00	$150.00
6	Cost advanced: courier to landlord's counsel, September 22	1	$45.00	$45.00

Summary	Amount
Professional fees (lines 1 to 4)	$5,672.50
Costs advanced (lines 5 and 6)	$195.00
Total for this invoice	$5,867.50
Applied from trust (see trust statement)	−$4,500.00
Balance due from client	$1,367.50

Trust statement for matter 2026-014

Date	Entry	Amount	Trust balance
Sep 2	Received: flat fee paid in advance	$2,500.00	$2,500.00
Sep 2	Received: advance deposit	$2,000.00	$4,500.00
Oct 1	Withdrawn: flat fee earned on delivery of memo (line 1)	−$2,500.00	$2,000.00
Oct 1	Withdrawn: hourly fees and costs on this invoice (lines 2 to 6, part)	−$2,000.00	$0.00

How to pay (two separate payments, because they go to two different accounts):

Balance due, $1,367.50: pay to the Harlow & Pine PLLC operating account. These are fees already earned and costs already paid by the firm.
Trust replenishment, $2,000.00: pay to the Harlow & Pine PLLC client trust account, quoting matter 2026-014. This is an advance against future work and stays your money until it is earned.

The check on the arithmetic: fees of $2,500 + $1,470 + $1,462.50 + $240 = $5,672.50. Costs of $150 + $45 = $195. The total of $5,867.50, less $4,500 applied from trust, leaves $1,367.50.

Where should the client's payment go: trust or operating account?

It depends on whose money it is when it arrives. Money paid for work already done belongs to the firm and goes to the operating account. Money paid for work not yet done still belongs to the client and goes to trust. The ABA Model Rule 1.15 text sets this out:

1.15(a): a lawyer must hold client property "separate from the lawyer's own property", with funds "kept in a separate account".
1.15(b): a lawyer may put the lawyer's own funds in a client trust account "for the sole purpose of paying bank service charges on that account, but only in an amount necessary for that purpose."
1.15(c): a lawyer "shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred."

The ABA comment on Rule 1.15 adds that if the client disputes part of a fee, "the disputed portion of the funds must be kept in a trust account", and the undisputed portion is distributed promptly.

Payment the client makes	Whose money it is	Where it goes
Paying an invoice for completed work and reimbursed costs	The firm's	Operating account
Advance deposit or evergreen top-up	The client's until earned	Client trust account
Flat fee paid before the work is done	The client's until earned, under the Model Rules	Client trust account (some states allow exceptions; see below)
Money for a cost the firm has not yet paid, such as a filing fee next month	The client's until spent	Client trust account
One check that mixes a balance due and a new advance	Partly each	Ask for two payments; if you receive one, follow your state's rule for mixed funds

In May 2023, the ABA's ethics committee issued Formal Opinion 505 on fees paid in advance. As the ABA Journal reported, the opinion says flat fees paid before the work is done are advances, "Flat fees are not general retainers and must not be treated as such", and labelling a fee "nonrefundable" or "earned upon receipt" does not remove the duty to hold it in trust. Under Model Rule 1.16(d), any advance not yet earned is refunded if the representation ends.

How do flat fees, hourly time and advanced costs appear on the bill?

Each fee type needs a different kind of line, and the engagement letter decides what the line can say. Model Rule 1.5(b) requires the scope, the basis or rate of the fee and the expenses the client will pay to be communicated, "preferably in writing", at or near the start of the representation. The invoice should mirror those terms.

Flat fee. One line naming the described service and the event that earned it, such as "memo delivered September 18". The delivery date matters because it is the point at which the fee can leave trust.
Hourly time. One line per task or group of related tasks, with the timekeeper, role, hours, rate and a description specific enough for the client to check. "Legal research, 6.5 hrs" invites a dispute; "research on the renewal-option clause; draft counter-proposal" does not. Bill in the time increment your engagement letter states.
Costs advanced. Third-party charges the firm has already paid, at the amount paid, with the receipt attached or available. Keep them in their own subtotal so the client can see fees and costs separately.
Trust activity. Show the opening balance, each deposit, each withdrawal and the closing balance for the matter. Rule 1.15(d) requires a lawyer to "promptly render a full accounting" of client funds when the client asks; a statement on every invoice answers that question before it is asked.

For help setting the rates themselves, see how to price legal services and the trade-offs in hourly versus fixed-price invoicing.

What changes from state to state?

The ABA Model Rules are a model. Each state adopts its own version, and the state's rule is the one that binds you. Trust-account rules are a place where states differ in ways that change the invoice.

California is a clear example. California Rule 1.15 (effective January 1, 2023) requires advances "for fees, costs and expenses" to be held in trust, but paragraph (b) lets a flat fee paid in advance go into the operating account if the lawyer tells the client in writing that the client can insist on trust and is entitled to a refund of any unearned amount. If the flat fee is over $1,000, that agreement and disclosure must be in a writing the client signs. Under that rule, line 1 of the example could have been paid straight to the operating account, with the right paperwork. The same California rule also requires notice to a client within 14 days of receiving funds in which the client has an interest, absent good cause, and record keeping for at least five years.

Other states differ on nonrefundable fees, segmented flat fees and record-retention periods. Before you copy any invoice layout, read your own state bar's version of Rule 1.15 and its trust-account guidance, or ask the bar's ethics hotline.

Contingency matters: a settlement statement, not an invoice

In a contingency fee matter there is usually no monthly fee invoice. The client may still get cost statements if the agreement makes them liable for costs. At the end, Model Rule 1.5(c) requires "a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination." That settlement statement typically shows the gross recovery, the percentage fee, the costs deducted and whether they were deducted before or after the fee was calculated, any liens paid, and the net to the client. The recovery itself is received into trust, because part of it belongs to the client. Rule 1.5(d) also prohibits contingent fees in criminal defense and in certain domestic relations matters.

Mistakes that make a legal invoice wrong or hard to pay

Mistake	Why it matters	Fix
"Pay this invoice to our client trust account" for completed work	Earned fees in trust mix the firm's money with client money (Rule 1.15(b))	Earned balance to operating; advances to trust; two payment instructions
Withdrawing a flat fee from trust before the work is done	Under 1.15(c) it may leave trust only as it is earned	Name the earning event on the line and withdraw on or after that date
No trust statement on the invoice	The client cannot see how their deposit was used	Add a per-matter trust table with running balance
Block billing ("research, drafting, calls: 9.0 hrs")	The client cannot test any single task	One task or related group per line with hours and rate
Costs folded into fees	The client cannot see what was a third-party charge	Separate costs subtotal, at the amount actually paid
Matter not identified	Clients with several matters cannot allocate the bill	Matter name and number in the header

For handling a client who challenges entries after the invoice goes out, see how to handle disputed invoices; remember that under the Rule 1.15 comment, a disputed amount already in trust stays there until the dispute is resolved.

Can you create this invoice in InvoiceQuickly?

You can produce the client-facing invoice. InvoiceQuickly cannot run your trust accounting. Here is the split.

What works today:

Line items with quantity and unit price, so "4.2 hours × $350" calculates correctly. Descriptions can carry the timekeeper, role and task.
Matter name and number, trust statement and both payment instructions in the notes and terms fields, which print on the PDF.
Recording the $4,500 trust application as a partial payment (method "other", with a reference such as "Trust transfer, Oct 1"), so the invoice's remaining balance in InvoiceQuickly is $1,367.50.
On Pro ($9/month): email delivery with the PDF attached, a client portal, scheduled reminders for the unpaid balance, and a Stripe or PayPal payment link for the remaining balance from your own Stripe or PayPal account.

What it does not do:

No trust or IOLTA accounting: no client ledgers, no three-way reconciliation, no trust-to-operating transfers. Keep those in your trust accounting system.
No matter-based time capture or timers. Enter hours you tracked elsewhere.
No LEDES or UTBMS output. Corporate clients that require e-billing in a LEDES format need legal billing software.
The PDF shows subtotal, tax and total; it does not print the amount applied or the balance due as separate rows, so put the trust statement in the notes.
Payment links pay into your own Stripe or PayPal account and settle to whatever bank account that account pays out to. Use them for balances due to the operating account. Before using any card processor for trust deposits, check your state bar's guidance on processor fees and trust accounts.

See the feature list and pricing for plan details.

When this example is not the right fit

Your clients require LEDES e-billing. Use legal billing software that exports LEDES 1998B or the XML formats your client's platform accepts.
You bill dozens of matters a month from trust. You need trust accounting software with per-client ledgers and reconciliation, not an invoicing tool with notes.
Contingency matters. Use a settlement statement at the end, as above.
Your state rule differs. If your state allows earned-on-receipt flat fees or has its own disclosure language, change the payment instructions and the trust table to match.

Frequently asked questions

Should a client pay a law firm invoice into the trust account?

Not if the invoice is for work already done. Earned fees and reimbursed costs belong to the firm and go to its operating account. Only advances for future fees and costs go into the client trust account under ABA Model Rule 1.15(c). Your state's version of the rule controls.

Does a flat legal fee go into the trust account?

Under the ABA Model Rules and Formal Opinion 505 (2023), a flat fee paid before the work is done is an advance and goes into trust until earned. Some states differ. California Rule 1.15(b), for example, allows a flat fee in the operating account with written disclosure, signed by the client if the fee is over $1,000.

What should a legal services invoice include?

The firm's and client's details, invoice number and date, due date, matter name and number, billing period, each fee line with timekeeper, hours and rate or the flat-fee service, costs advanced, totals, any amount applied from trust with a trust statement, and payment instructions that name the correct account.

How do you show a retainer on a legal invoice?

Show the trust balance at the start of the period, each amount withdrawn for fees or costs on this invoice, and the closing balance. Then show the balance due after the trust application and, if the engagement letter requires it, a separate request to replenish the deposit to trust.

Can InvoiceQuickly handle IOLTA or trust accounting?

No. InvoiceQuickly creates and sends the invoice and tracks payments against it, including partial payments. It has no trust ledgers, reconciliation or LEDES export. Keep trust records in software built for lawyer trust accounting.

Is a contingency fee invoiced?

Usually not monthly. Under Model Rule 1.5(c), at the end of a contingency matter the lawyer gives the client a written statement of the outcome showing the remittance and how it was calculated. Cost-only statements may go out during the matter if the agreement provides for them.

This article explains how invoices interact with trust-account rules. It is not legal or ethics advice. Rules of professional conduct vary by state; check your state bar's rules and ethics guidance, or ask its ethics hotline. Last reviewed: October 27, 2026.