Critical Success Factors to Manage Legal e-Billing

The business process of legal e-billing (electronic invoicing) between an in-house team and outside counsel is rapidly growing; we can learn lessons from many successful implementations. Some key factors can assist with the implementation of e-billing and help ensure that both the in-house legal department and the law firms benefit from the changes.

While there is now a general level of knowledge in the legal marketplace about e-billing, there still seems to be a need for more detailed information and expertise regarding the exact steps required by both the client and the law firm to make e-billing a success.

On the surface, e-billing, from a client’s perspective, may seem straightforward. But we believe that many in-house legal departments are unaware of the issues that may arise from poor initial resourcing or project management with e-billing. There are also several “best practices” that client organizations need to be aware of and apply to maximize the opportunities from e-billing.

In our experience, clients have some work to do to prepare for e-billing, even before they can approach their law firm panel regarding an e-billing project – either directly or through one of the e-billing intermediaries.

E-BILLING CHECKLIST: ASK THE RIGHT QUESTIONS

It is important that an e-billing implementation is a two-way process and not just something imposed by the in-house legal team. A standard e-billing checklist identifies the key questions the law firm needs to know to ensure successful implementation. Ideally, work should start after answering all questions; otherwise, significant implementation delays may occur.

  • The checklist should include questions on the following:
  • What LEDES format does the client want to use?
  • What UTBMS codes and timekeeper classification does the client want to use?
  • What billing rules is the client seeking to impose?
  • What is the project’s scope – including client entities and types of matters?
  • What does the firm have to do to achieve a successful bill?

In return for a stricter, more transparent billing discipline, the client could commit to a minimum bill payment period following approval of the e-bill. When not agreeing to these conditions at the outset, it is difficult for the firm to impose conditions after the event.

E-BILLING PROJECT RESOURCING

E-billing is a relatively resource-intensive process. The larger law firm will likely deal with upwards of five different e-billing vendors and several varying LEDES formats. The team responsible has to be able to log into each system, understand the differences, and know what to do for bill rejection to minimize bill turnaround time. In addition, the team must constantly update systems with new fee-earner information and any changes to billing rates; otherwise, the system will reject them. For every 200 e-bills issued monthly, a firm must employ approximately one individual to administer the systems. Without the experience, skill, and discipline to administer the systems, you could face significant collection time delays.

In-house legal departments must appreciate this and ensure they have chosen an e-billing provider that is always available to law firms for any queries. Professionally set up e-billing providers like Onit’s European legal spend management solution BusyLamp e-billing.Space focus on responding quickly and with high quality to law firms’ questions to ensure that the client and their firms get the best possible service and keep the flow of instructions and invoices moving.

ENGAGE E-BILLING STAKEHOLDERS FROM THE OUTSET

E-billing needs to be owned and driven at a senior level and requires the input of all stakeholders that touch on the process. Within law firms, e-billing is not just a function of the billing department. It needs to be understood and contributed to by the fee earners, business development, finance, revenue, credit control, and billing. Strategic implementation becomes even more critical when several e-billing projects with competing priorities roll out simultaneously. Likewise, within the client organization all the stakeholders must be engaged in the process – including the legal teams, General Counsel, and, more recently, the Corporate Legal Operations Teams.

IN-HOUSE BILLING PROCESSES

The introduction of e-billing also requires resources from the in-house team. Introducing an e-billing system does not differ from any other process change of comparable scope. Legal departments need to ensure that their internal processes and systems can maximize the benefits that can accrue from e-billing. This may mean changes to the Accounts Payable system to enable electronic acceptance of e-bills once approved for payment. Also, the internal invoice processes should be capable of meeting the requirements that a move to e-billing brings. This may mean changes to existing procedures for budgetary approval, giving matter instructions, and the processes for authorizing and paying law firm invoices.

A glance at the many successful introductions of e-billing systems shows that the effort will undoubtedly pay off. While this is evident from the in-house point of view due to the significant cost savings, the advantages for law firms are often only apparent at a glance. Law firms strengthen and improve their relationships with clients if they support them in making e-billing a successful project.

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