Tag: BusyLamp

Legal spend management software solves several different challenges depending on the organization. During the pandemic specifically, this could be as fundamental as no longer being able to review and pay paper-based invoices in the office. For Associated British Foods (ABF), who were already using e-billing before lockdown, usage of the system increased because remote working meant e-billing was the only option! However, legal spend management software really comes into its own when applied strategically.

For ABF, this meant maximizing volume discounts with firms. Daniel Wate, their Legal Technology Analyst, says, “Legal isn’t revenue generating, so we implemented legal spend management software to ensure we were spending responsibly and give us accountability. With last year being challenging, for example, the temporary closure of our Primark stores, we’ve been more likely to maximize volume discounts with firms, something we couldn’t do unless we knew what we were spending.” This has been achieved by consolidating the number of firms and reaching volume thresholds faster. Another savings area is through using spend data to make the case for hiring internally, “we’ve noticed that sometimes it’s cheaper if we hire someone else rather than using a law firm,” Dan explains.

As Managing Legal Counsel, Lynne Kellett says that EDF UK NNB (EDF) uses the tool for a similar purpose, “We leverage local firms as an extension of the in-house team, so we need spend data to encourage our firms to deliver additional services and value add in line with our panel arrangements.”

Even in BAU times, spend management is an essential strategic tool. ABF started its e-billing journey in 2012. Daniel reflects, “It was a very manual process. We spent a lot of money but didn’t know with which firms, how many firms, where in the world, who was instructing the firms, or how much we were spending!” They also suspected that the rule, “notify legal must before engaging law firms,” was not being followed. Using BusyLamp eBilling.Space has allowed them to control this more effectively.

This cost visibility is also essential for EDF. Lynne remarks, “the General Counsel wanted to “press a button” to find out how much was being spent, when, and where, without using spreadsheets.” Legal spend management tools today go beyond the process of e-billing, with RFP, WIP, vendor management, and complex analysis and prediction capabilities now commonplace. EDF looked for such a tool after identifying that the end-to-end process for engaging firms was just as important as tracking the costs. Freeing the team from admin and reporting was also critical.

INVOLVING STAKEHOLDERS IN THE LEGAL SPEND MANAGEMENT PROJECT

Although the primary users of legal spend management software, the legal team is not the only stakeholder, and it’s crucial to involve other departments in the project journey. Sourcing, finance, tax, and IT are typical functions that need to be involved. They can help you draft RFP requirements, offer a different perspective, ensure legal processes integrate with other departmental processes, and help solidify the business case if the tool benefits more than just the legal team.

Involving finance was key for EDF since reporting to finance was a heavy administration burden before they implemented Onit’s European legal spend management solution BusyLamp e-billing.Space. Lynne remembers, “part of the streamlining of the process was to remove some of those manual steps, so we wanted to make sure the output would still meet finance’s requirements.” Lynne also recommends getting help from IT as they have experience rolling out tech projects but cautions it may take longer than you expect, “legal is not profit-generating like other departments, so you need to make your case early and strongly!” Daniel echoes this sentiment, “while IT is a useful resource because they do rollouts all the time, they are busy, and you will have to join a queue. So, get them involved as soon as possible and communicate often.”

FUTURE LEGAL SPEND MANAGEMENT PLANS

As referenced earlier, legal spend management is more than just e-billing. In the near future, EDF plan to use the RFP tool in e-billing.Space and also wants to report objectively on how law firms deliver additional value. Lynne explains, “The longer we use the software, the more data, and more consistent data, we are getting about our firms. This will help us drive not only the best price but the best value – especially for larger projects. This is win/win – it’s not free for law firms to give us these value-adds, so tracking it means we can recognize it.” Being able to do this in one single system means avoiding yet another spreadsheet.

Next on ABF’s agenda is billing guidelines, which are already in place for the company’s USA law firms, but they plan to implement them throughout the rest of the world. Using BusyLamp for driving value is also important, though. Daniel says, “we pull a lot of reports but don’t get the maximum benefit from them; we need to think how we can use them to drive discussions with and leverage usage of law firms.”

Learn more about BusyLamp from Onit, our end-to-end legal spend management solution built for European corporate legal departments. 

The COVID era has been exceedingly difficult and distressing for people worldwide. We needed to quickly adapt to a new way of living and working that has mostly deprived us of the comfort and familiarity we took for granted. Almost overnight, we had a “new normal” thrust upon us, and we had no choice but to embrace it to save lives.

Our way of life has never been such a rapid global shift. One of the most striking changes has been in how we work. Long commutes and distracting office work are now distant memories. We are now a remote-first workforce. Research has shown that we quite like our new working arrangement, with more than half of workers saying they want to continue working from home after the pandemic has eventually eased.

COVID-19 has not only led to people working from home, but it has also led to them working at different times and in different locations. With schools and support provisions shut, many people needed help to juggle work and home-schooling, caring for family members, volunteering, or other commitments. This led to an unavoidable rearranging of the working day, starting earlier or working in the evenings and weekends to keep up. But with this flexibility came an advantage to work to patterns that maximize individuals’ productivity, rather than being forced to work traditional business hours. When not in lockdown, workers are also choosing to work elsewhere. Between lockdowns, we have had colleagues working remotely from Cornwall, Poland, and Dubai. This all means much of the workforce is working on a different time, different place basis.

This new work-from-home revolution will have enormous impacts on many industries, but what does it mean for legal, and more specifically, how will technology play a role? We are not clairvoyant, but here are five legal tech trends we think we will see over the coming months and years because of the pandemic.

1) ASYNCHRONOUS WORKING

Lawyers must embrace asynchronous collaboration and communication tools to facilitate productive working across teams. While many lawyers have quickly adopted synchronous tools to support remote working in lockdown (e.g., video calls and instant messaging), many have not yet adopted asynchronous platforms for genuine project management. We will see more lawyers experimenting with team collaboration tools like Confluence or Notion and project management tools like Jira, Trello, Asana, and Monday. We may even see lawyers adopting Agile ceremonies like sprint planning and daily stand-ups.

This trend will also accelerate the creation of next-generation matter management tools, evolving from systems of record to full systems of engagement and collaboration. It will not just be productivity tools; there will also be a rise in the use of asynchronous learning platforms to ensure remote workers have access to learning and development at a time that best suits their working pattern.

2) KNOWLEDGE MANAGEMENT, SHARING AND ACCESS

Quick and timely access to legal know-how is critical to a remote team’s mutual knowledge and everyone’s performance. Remote workers can no longer walk across the office to ask a colleague for help and guidance. Calls and instant messaging do not necessarily help since people are already fighting digital distractions and may not be online when guidance is required. Asynchronous collaboration tools help by enabling know-how to be captured and shared – but we will see greater adoption of knowledge management solutions that allow team members to easily access knowledge whenever and wherever they are.

This is where we see AI tools developed to simplify knowledge discovery, connect, and structure know-how from different sources, keep knowledge up-to-date, and deliver it in context within workflows. Search functionality (not always seen as that exciting) will also become one of the most important tools in a remote worker’s arsenal. For this reason, we will also see the growth of solutions that help to centralize data to streamline and optimize the search experience. However, while the search returns results, it only sometimes delivers specific answers. We are also likely to see the maturing and broader adoption of chatbots and decision automation tools that help provide direct answers alongside the underlying sources.

3) LEGAL GIG ECONOMY

Flexible resourcing isn’t necessarily new in legal – LOD (Lawyers on Demand), Axiom, Peerpoint, and Vario have been doing it for some time. However, large numbers of employees “going remote” during the pandemic have given organizations a better idea of what a remote workforce can achieve.

Surveys have consistently shown employee productivity is high during the pandemic. Organizations are therefore accelerating their move towards a leaner operating model, bringing in temporary, freelance resources for specific legal tasks or projects as and when needed. This delivers a much more cost-efficient approach and enables businesses to tap into a dispersed talent pool. While demand will grow, so will supply as lawyers and paralegals look to capitalize on the flexibility of remote working to build portfolio careers or find a better work-life balance.

We will see significant growth in online flexible resourcing platforms that help connect organizations to an army of remote lawyers and paralegals looking to take advantage of the new normal. These platforms will either be “catch-all” – covering all legal resources – or niche, focusing on connecting businesses with legal experts in particular fields.

4) EMPLOYEE MONITORING TO SUPPORT LEGAL OPERATIONS

One benefit of office work is that managers can see what their teams are doing, how they are working, and whether team members are struggling. This is more difficult when managing remote teams. Therefore, organizations need to find ways to measure employees’ productivity and working patterns and highlight any potential issues.

However, it is about ensuring performance meets standards and providing employee well-being. “Technostress” has been highlighted as a significant problem for many people working remotely, and managers must look for the warning signs. They will also need to ensure they are still identifying training and support needs and calling out inappropriate behavior (bullying, discrimination, sexual harassment, etc.), which can increase in remote environments.

While many lawyers are familiar with recording and accounting for their time, not having to do this is one of the main reasons they enjoy working in-house over private practice! Nevertheless, we expect to see more law firms and corporate legal teams invest in digital, online employee-monitoring systems to help maintain productivity, ensure well-being, and increase transparency, essential metrics for effective legal operations. We may also see existing legal tech platforms add employee-monitoring tools as an option so that employers can track team behavior, e.g., tracking active/inactive status, monitoring page activity within the tool, etc. One way to avoid replicating law firm time recording or overly authoritarian monitoring is to track behavior for limited periods at intervals rather than an “always-on” approach.

We may also see a different kind of monitoring, one focused less on the output and more on outcomes. As teams shift to project management software, they will likely begin to track performance against OKRs and KPIs. This is a good way of ensuring performance without being too overbearing. Ultimately, we’ll see organizations and teams adopt a mixture of tools to help them maintain performance and deliver desired outcomes when working remotely.

5) FROM LEGAL PLATFORM TO ENTERPRISE INTEROPERABILITY

The most striking workplace effect of the pandemic is the accelerated and standardized adoption of digital productivity and collaboration tools. While many in-house legal teams and their firms were using video conferencing and instant messaging tools like Zoom, Google Meet, and Slack, many were still in the stone age regarding remote collaboration and communication tools. But that all changed when COVID-19 struck. Microsoft Teams saw its active users skyrocket 160% from 44 million in March 2020 to 115 million in November of the same year. Slack and Zoom have seen similar explosions in adoption. These tools have become the common language of remote working.

Legal technology vendors of all sizes will need to re-evaluate their strategy and move away from trying to drive users to their unique platforms and ecosystems. Instead, they will need to find ways to offer value in the systems where users prefer to work. This means a greater focus on plug-ins, integrations, and open APIs. It may even mean deconstructing existing products to embed functionality and extend tools such as Microsoft Teams.

HAS LEGAL TRANSFORMATION FINALLY ARRIVED?

The obvious theme that ties all the above is that technology will be essential to facilitate workers and their organizations transitioning to the new remote, distributed model (both inside and outside the legal domain). Technology is pushing at an open door for once – employees and employers cannot adopt digital productivity, collaboration, and communication tools quickly enough.

We are still in the infancy of the remote working tech revolution, so only time will tell whether the above predictions happen. Whatever happens, COVID-19 has changed the game for remote working. Remote-first will be the trend of the 2020s, and legal technology vendors should be making this a core component of their product and customer success strategies if they do not want to be left behind.

Request a demo of eBilling.space today. 

John McCarthy, the computer scientist and “father of AI,” defined artificial intelligence as the science and engineering of making intelligent machines, especially intelligent computer programs.

When AI gets mentioned in the context of enterprise legal applications, it is usually referring to “machine learning.” In machine learning, systems learn from outcomes and decisions and improve with experience without being directly programmed to take certain actions or reach specific conclusions. These machines analyze data and discover patterns without significant human intervention, typically requiring only a training dataset.

Machine learning is often confused with rules-based automation, workflows based on pre-programmed “if this then that” algorithms. Legal buyers need to recognize the difference when looking to deploy AI within their departments. If the machine isn’t analyzing and learning from the data but is using pre-programmed, non-evolving rules to automate processes and outcomes, then it’s not AI.

Legal teams usually bring in machine learning to improve efficiency and productivity, as machines can perform tasks faster than humans, freeing legal counsel to do higher-value work. These applications include:

• Legal Research: reviewing, tagging, and ranking documents relevant to a matter or eDiscovery, highlighting questionable ones that need human review.
• ReviewAI: Identifying and flagging clauses for review, searching for missing clauses, and redlining in bulk and at speed.
• Invoice Review: Coding, approving, rejecting, or flagging line items and invoices (where rules-based automation isn’t an option.)
• Data Extraction: This can apply to invoices, contracts, documents, or any requirement where a mass of non-structured data must get organized and classified.
• Litigation analytics: Analyzing trial data to predict outcomes of litigation.

GETTING THE MOST FROM MACHINE LEARNING

The above use cases and benefits can transform the legal profession. However, legal departments currently implementing an AI-powered legal solution may be disappointed by the true scope of these tools, especially if they are at the start of their digitalization journey. Buyers do not see the promised benefits and are beginning to question the hype.

The very nature of machine learning is that it needs data to deduce the patterns that help it to evolve and learn. This data doesn’t just need to be abundant in volume; it needs to be complete, accurate, fair, and free of bias. Improved accuracy vs. a human is a benefit often touted, but this is only the case if the data from which the machine is learning is accurate in the first place. Poor or insufficient data will mean the machine does not have enough data to learn from and will not fully deliver the anticipated outcomes and benefits.

Perhaps even more concerning, however, is that the machine will draw partial or incorrect conclusions from a deficient dataset and take the wrong action or reach the erroneous conclusion – thereby creating hidden risk. Ironically, AI can negatively impact productivity if a human must go back over the work, identify issues, and correct them. More severe, though, is if these incorrect conclusions result in damaging actions for the business, even litigation. The reliability of your machine learning needs to be a factor when accounting for legal risk, and legal teams need to understand their role in feeding machine learning tools with quality data and training to avoid these issues; as the saying goes, “you get out what you put in.”

If this sounds paranoid, some examples from other industries will help show why it is critical to be careful when deploying AI. In 2018, Amazon created a tool to review engineering CVs and flag the top ones for an interview. The intention was to automate a time-consuming process. To train the machine, they used the dataset of current Amazon engineering employees plus applications from the last ten years, which happened to be predominantly men. The machine “learned” that ‘more male’ candidates were the best for the role. Amazon soon ditched the tool. Poor data was also at the heart of IBM Watson’s failure to accurately diagnose and treat cancer patients. The data used to train the machine was hypothetical rather than real patient data and frequently gave poor advice. These examples demonstrate not only the importance of complete data for machine learning but the fact that it is hard to predict unexpected consequences before they happen.

The above examples demonstrate the importance of quality and unbiased data, even when the aims are straightforward. AI is not for complex legal work; it speeds up routine tasks, supports better decision-making, and sometimes takes actions based on those decisions. In fact, some of the best examples of AI deployment are where machine learning tools have been combined with rules-based systems to first identify and categorize data and then take defined steps based on that categorization.

MACHINE LEARNING AND E-BILLING

Spend management is a legal-specific application using rules-based automation and machine learning together. For example, Onit’s European legal spend management solution BusyLamp uses the following AI functionality for clients and/or law firms that prefer not to use LEDES files:

• Data extraction: Pulling relevant information from PDF invoices, relieving smaller law firms from the burden of generating complex invoice files.
• Invoice Reviews: Some law firms struggle to code invoices in a way that clients can understand. BusyLamp AI takes unstructured invoice data and auto-classifies every task to enable automated invoice review.
• Legal Analytics: Unstructured invoice and matter data can be analyzed to enhance strategic decision-making.
• Block Billing: English time narratives can be analyzed so that block billing, a practice that usually contravenes billing guidelines, can be identified.

IS AI RIGHT FOR YOUR LEGAL DEPARTMENT?

Using point solutions such as the e-billing example above allows legal departments to take advantage of machine learning benefits for gains in specific areas of legal operations. But machine learning is by no means critical to make efficiency and productivity gains; most BusyLamp clients start small and aim big by tackling the issues of collating knowledge, structuring, and cleansing their data sets, and then building automated workflows.

When you gather requirements for your next legal technology project, start by mapping out your current processes, roadblocks, and desired outcomes before looking at any specific technology tool. As you evaluate software vendors, you will discover various solutions and workflows to your problem, which may or may not involve AI.

Remember, you should never use AI for AI’s sake – it is rarely the silver bullet. Almost every legal technology tool uses rules-based (non-AI) automation to relieve the legal team of admin and mundane, repetitive tasks; this will be a fantastic starting point for most teams setting out on their digital journey.

There is no doubt that machine learning is playing a huge role in improving the productivity of the legal profession and will allow in-house teams to take a more pivotal, strategic role in their businesses. But as a profession familiar with risk mitigation, a degree of caution must be applied when looking to reach the machine learning “promised land.” Accurate, high quantities of data alongside a careful selection of technology tools will significantly reduce your exposure to these risks and help you make a success of your team’s digital transformation.

Because AI is so dependent on the data it receives, the real transformational tipping point will not be in using these solutions within the legal function alone but in the enterprise-wide application of machine learning tools. Imagine the insights and outcomes achieved by analyzing documents and data across an entire organization, not just the legal function. This is only achievable with integrated legal and enterprise tech tools and robust, extensive, consistent data.

The “power of AI” and its ability to change the legal profession are beyond question. However, it is essential to proceed with caution and lay the groundwork to ensure that your legal department sees the benefit of machine learning rather than learning that it has been sucked in by the AI hype machine.

While e-billing has brought new transparency, control, and clarity to the billing process for in-house teams, one criticism of “conventional” e-billing is that the client is still not able to see the time and expenses being charged by their external law firms until the final invoice is sent (whether that is a draft or an engrossed version).

The goal is to be able to see the work carried out and the associated costs during the life of the matter itself and be able to query or even reject items early in the billing cycle. This is necessary for accurate cost control, forecasting, and avoiding invoice surprises. This WIP (Work in Progress) information has long been the subject of discussion between in-house legal teams and law firms. Until recently, law firms have only been able to provide rough estimates of accruals – usually at the end of each month – without any detail.

The key areas that an in-house legal team should be able to monitor to stay in control of its legal spend are:

• Cost overruns against budget/forecast.
• Counsel’s pre-billing time entries
• Large amounts of a single activity (e.g. research, drafting etc.).
• Wide date ranges between the work carried out and the time/fees submitted to the client.

WIP REPORTING IS BENEFICIAL FOR LAW FIRMS AND CORPORATE LEGAL TEAMS

Modern legal spend management solutions such as Onit’s BusyLamp includes WIP reporting as a key feature. It adds an extra dimension to the relationship between corporate legal teams and their external law firms. Some of the advantages of WIP reporting for both parties include the following:

• The law firm adds value for the client through enhanced billing data – over and above the provision of quality legal advice.
• The law firm has confidence that the work performed (so far) has been accepted by the client, and there will be no pushback when presenting the final invoice.
• The client has more certainty that the work is done correctly and in line with the billing guidelines. Detailed actual spend versus budget can be monitored early in the transaction and through all its phases

CHALLENGES OF WIP REPORTING FOR LAW FIRMS

Despite these benefits, implementing WIP reporting has its challenges. While some law firms have embraced the requests from their clients to provide timely and accurate WIP information, several law firms still need to fully meet the WIP reporting requirement.

A common concern is that firms view the “raw” WIP information as law firm data that the client should not see. Many large international firms have specialist revenue controllers working within the legal teams and closely with the deal partners. These firms also have well-established billing processes, a crucial part involving revenue staff and partners reviewing the WIP for each matter before finalizing the bill. They will decide which items of time to charge. More importantly, they will also check that time narratives are worded appropriately and are suitable for the client’s view.

In most firms, lawyers get advice regarding appropriate content for matter narratives. Still, several hundred associates can work on matters, and it is impossible to “police” what they enter before the bill data is “cleaned up.” The firms are reluctant to go through this cleaning-up process on the WIP data (even though it may be for a small number of bills) as partners see it as doubling up on work. Furthermore, no partner wants to be the first to allow a client to review WIP information in case it contains inappropriate content.

Another reason sometimes quoted by law firms for not wanting to provide WIP revolves around the timing and process issues associated with WIP information. What are the consequences if the client rejects some or all of this information? Some firms argue that if WIP information must be re-submitted, it may fall outside the acceptable time limits between the work done and when it gets billed. These firms often seek to establish reasonable windows and processes for WIP review and resubmission if any line entries are not approved.

A final objection is that producing WIP files in the LEDES e-bill format requires development work to be scheduled by the Finance/IT Systems team. Some firms have implemented manual workarounds for supporting WIP submissions, but this is not sustainable in the long term and for a growing number of invoices.

OVERCOMING WIP REPORTING CHALLENGES

E-billing vendors, in-house legal teams and law firms have together come up with a number of compromises to address these challenges, which include:

• Line-Item Narratives: If this is a concern, parties may agree to drop narratives from the WIP upload or substitute them with holding text saying that the narratives will be on the final bill. If approved, the clients would at least see costs and the associated activity or expenses based on the LEDES code (e.g., communicating, drafting and so on).
• Billing Cycles and Accruals: The client can achieve similar output if the billing cycle is reduced to a calendar month, allowing them to view that month’s work. Another option would be to improve the information supplied as accruals. This would not give all the time details to the in-house team but would meet some of the requirements.
• LEDES Output Requirement: To address the concerns of law firms about possible additional IT development work, Onit has developed two alternative methods used with BusyLamp:
  • Firms can output their WIP information as an Excel spreadsheet, which can then be uploaded into the e-billing application as required by the client. As all law firms have access to Excel as standard and have staff who can use it, the issue of needing expensive billing system changes gets minimized.
  • AI functionality in BusyLamp can extract non-LEDES-format, unstructured WIP data into meaningful and useful reports for the in-house legal team.

For a successful WIP reporting implementation, legal teams should engage with the law firm partners early in the process and discuss the requirement for WIP reporting. This should include why the in-house team requires WIP and what they aim to achieve from tracking it. It will help overcome some of the arguments against providing WIP and help all parties explore suitable alternatives that still give the in-house legal department what they need to succeed.

Request a demo of BusyLamp eBilling.Space today.

Many legal departments considering legal spend management software face a common objection internally: the organization can manage legal expenses with existing enterprise software solutions. Doing this usually involves implementing the company’s standardized purchasing processes into legal, requiring a “purchase order number” (PO Nr.). However, standard accounting procedures and software need to account for the unique features of legal procurement and legal e-billing and are no substitute for dedicated legal department software. Even generic procurement software must meet today’s responsible legal spend management requirements. In this article, we look at the reasons for this.

AP, ERP, AND PROCUREMENT SYSTEMS

Accounts Payable (“AP”) or Enterprise Resource Planning (“ERP”) systems collect and manage accounting data for a company’s suppliers. They are an integral part of the purchasing system, in which suppliers manage orders and invoices. The system automatically makes bookings in response to operational transactions and stores a booking number for each transaction. General invoice information, such as invoice issuer and recipient, amount invoiced, date, and invoice number, is entered into the system automatically.

Classic procurement systems usually contain features that enable electronic supplier selection, ordering, and tracking by the procurement department and procurement logistics. The introduction of appropriate tools aims to reduce the effort and costs per order since the ordering process is automated, and the system stores uniform supplier lists with pre-approved terms. In addition, most tools offer e-Invoicing solutions that allow suppliers to issue invoices electronically.

THE UNIQUE NATURE OF BUYING AND BILLING LEGAL SERVICES

In contrast to most other services, legal advice gets instructions from the legal department or directly from a business unit rather than the procurement department. As a result, the standard procurement processes do not apply, and regular orders do not comply with the usual corporate standards (e.g., “no order without PO number”). As a result, the unit that instructs external legal advice quickly becomes suspected of “Maverick Buying,” i.e., purchasing services outside the pre-defined procurement guidelines. In this respect, we can understand the impulse to treat legal advice in the same way as the services of other suppliers. The challenge here is that legal services are often “ordered” ad hoc, as they usually relate to urgent matters. In addition, law firms are constantly engaged on an informal basis, for example, by telephone.

The classic PO number process is unsuitable for this purpose, as it takes time and requires the specification of an order value, which is often unknown at the time of the engagement, as lawyers’ fees generally come invoiced on an hourly rate basis. The actual scope of a project only becomes apparent during the matter. Many legal departments try to follow the procurement guidelines by issuing a PO number at the beginning of the year, showing a specific budget with the definition “general legal advice.” Such a catch-all term has the opposite effect of what should come through good legal spend management: allocating invoiced costs to specific matters and activities. What may seem like an understandable and rational idea at first glance, “to engage law firms based on the standard procurement processes,” proves to be ineffective upon closer examination, as it promotes a lack of transparency and plausibility of legal costs.

In addition, invoices for legal services are usually much more complex than invoices from other suppliers. The accompanying line-item descriptions can sometimes fill walls of folders, and it is difficult to compare and check invoice amounts due to the high complexity of legal services. Progressive legal departments, therefore, use “billing guidelines” and engagement letters that define precise requirements for billable activities, expenses, and timekeepers. However, classic procurement software does not support automated checking of these legal-specific billing rules, so they ultimately come to nothing. A manual check by the staff of the in-house legal departments, be it lawyers or legal operations managers, is not economically viable. These professionals should spend time on high-value legal work, not tiresome, error-prone administrative tasks. There is a strong case for automating billing guidelines compliance through software designed for this purpose while relieving the legal department of administrative work.

ADVANTAGES OF LEGAL SPEND MANAGEMENT SOFTWARE

Clear budgeting and cost allocation

Legal spend management software ensures that all uploaded legal bills automatically get assigned to a specific matter. Legal departments can create matters themselves or have law firms create them. For example, in a complex transaction, several matter phases can be made as separate sub-matters with their budgets and different cost centers. The organization can assign different budgets if multiple law firms work on a single matter. Furthermore, the organization can assign legal project costs to individual subsidiaries within the group. These details allow for clear allocation and effective management of costs.

Automated billing guideline compliance

Legal departments can enter their billing rules into a legal spend management tool at a law firm or matter level. The system automatically checks the invoiced activities, scope of activities, and expensed amounts against the billing rules, flagging any inconsistencies or rejecting the invoice, depending on the preferred settings for that specific rule, matter and/or firm. Since the alternative to this requires error-prone and time-consuming manual review, the automated process results in significant cost savings. In addition, invoices get paid faster, and many legal departments have been able to negotiate better rates with their external legal providers based on reduced payment time.

Matter management

In addition to these fundamental features, modern legal spend management systems also record detailed matter information, such as the legal area, jurisdiction, and timekeeper seniority level, i.e., legal staff, associates, or partners. Since the data is available in a structured format, organizations can create a full report at the click of a button. Such a report can, for example, provide quarterly information on the current costs by matter, broken down according to the aforementioned matter fields. Modern legal spend management solutions can also integrate with third-party matter, document, or IP management systems. The legal spend management software is suited to act as the legal department’s leading reporting tool; it is a “single source of truth.”

Enabling data-driven legal management

The successful implementation of a legal spend management system provides the legal department with centralized and secure access to invoice data. The spend data is available at a high level of granularity, as the legal coding standards ensure the recording of sufficient information about the timekeeper and the invoiced activities. It is possible to create reports on activities, types of activity, or expenses at any time. Organizations can make data-driven decisions based on the high transparency gained regarding legal spend. This applies to short-term decisions, such as limiting the scope of research during a matter, to long-term strategies, such as insourcing re-occurring legal work and creating new in-house roles. The reporting and analytics modules are tailored to the legal department’s requirements and can configure for accounts or users. Analytics can evaluate all matters and firms on any combination of fields within the system. The reporting and analytics tools provide helpful information that legal departments can use to make data-based decisions around, for example, which firms to engage for certain types of legal work, matters, or to negotiate better hourly rates and alternative fee agreements.

Recording and communicating work in progress (WIP)

Law firms can enter un-billed activity into the legal spend management system at regular time intervals, for example, on a weekly or monthly basis. The legal department can access the current cost status of their matters at any time through the WIP functionality to keep an eye on budgets and ensure budget compliance before the costs are invoiced. This enables the legal department to forecast and budget more accurately, reducing surprises when submitting invoices. Legal departments can predict outstanding costs for financial year-end and quarter-end audits and create automated reports to communicate any outstanding fees to their financial department or auditors.

Furthermore, tracking WIP gives visibility that prevents undesirable developments; it is easy to identify and discuss out-of-scope services. Law firms tend to record their times more accurately, which is also in the client’s interest.

Sourcing and survey modules

Legal departments can use Onit’s European legal spend management solution BusyLamp eBilling.Space‘s sourcing module to obtain fee quotes quickly and easily from law firms using a standard process that enables a fair comparison among the different offers from the law firms. The competitive nature of an invitation to tender ultimately leads to more favourable prices. The legal department can use the pricing data gained through the sourcing process to improve its budgeting process.

After completing a matter, there is also the possibility of evaluating the firm’s performance. For example, the quality of the legal advice provided, if the firm met deadlines/timelines, responsiveness, and compliance with the agreed terms, especially regarding budget compliance, are evaluated. Organizations can share feedback with law firms to improve the relationship. It is also possible to request feedback from the law firms to get their perspective on the collaboration’s quality. If organizations use these functions consistently, the decision as to which law firm to engage for a particular matter or legal area comes not from a “gut feeling” but from sound data.

IMPACT ON FINANCE AND PROCUREMENT

Legal spend management software offers significant benefits that generic systems cannot provide. However, it should complement the alternative solution to AP or procurement systems. Modern legal spend management systems integrate with any open-interfaced software. Our experience shows that the best results come through combining these two solutions. This enables the legal department to operate effective legal spend management, and finance receives the relevant information promptly into the AP system. A legal spend management tool acts like a funnel that precedes the central AP system, gathering valuable legal-specific information and positively affecting the quality of essential information for procurement and finance.

Request a demo of BusyLamp eBilling.Space today.

You’ve built a solid business case, and the benefits of digitalizing your legal processes are clear in efficiency gains and even cost savings (if you’re implementing a legal spend management solution). Not only will the business benefit, but the day-to-day legal operations and processes be simplified so your team is more productive and spends less time on admin. The new legal software is a “no-brainer.” Despite this, you have user adoption and acceptance challenges. Many members of your team are still using the old processes. Why, when are the benefits obvious, and how can you encourage your colleagues to use the new system?

Many change management blogs concentrate on the build-up to implementation and how to get buy-in from stakeholders and users at all levels and around the business. These include ensuring that the project team is diverse, documenting the business need before looking at the legal tech solutions, that requirements are reflective of those that will be using it, that scope doesn’t deviate too much from the initial business need, and that team members get to demo potential systems. All of this is important and contributes to a successful rollout. Regardless of how your pre-implementation project went, you can’t turn back the clock, so advice focusing on the project planning is of little use if you’ve already started rollout. This article focuses on the natural human behaviors that prevent user acceptance and adoption, along with advice and tactics to overcome the challenges so the software you have invested in achieves its expected benefits.

WHY USER ADOPTION CHALLENGES ARE SO COMMON

Firstly, you are not alone, so take some solace in that. Nor is user adoption a challenge specific to legal; ask around the business, and you will find other departments that feel your pain. Forming new habits is the key to success in using a new tool. Individuals will already have habitual, efficient routines, and moving to a new process is disruptive. To form a new habit, you must use the latest software often, requiring as little mental energy as the current process. However, getting to the point of it being routine involves effort, and there will be a temporary reduction in productivity and frustrations. It’s this hurdle that causes most of the issues.

The new software delivers unquestionable efficiency benefits on paper, but these will only come once it becomes the new normal. The key to successful user adoption is making learning the new process as easy as possible and for the new system to deliver benefits and rewards that drive the individual to want to repeat the process. At the same time, you need to manage the negative impact if some system features don’t quite work as intended and the confirmation bias at work in negative echo chambers. Bear all this in mind when using tactics to address user acceptance challenges.

TRAINING AND SUPPORT

Even the most intuitive software will require training to use the tool effectively. For example, there are often multiple paths to achieve desired actions, and team members may not be aware of certain shortcuts. Across the user base, you will have those that find learning new software easy and some that find it very difficult, regardless of its usability. Most training should come from the vendor itself during in-person or online onboarding. Still, provide ongoing training and support as usage ramps up or new employees join the company.

Train-the-trainer programs ensure an internal champion can quickly scale training throughout the business. Internal champions have a broad understanding of the software and the role the system plays in the business structure and processes. This knowledge means they play an essential role beyond training, supporting the team by managing stakeholders, and troubleshooting. Taking an e-billing implementation as an example, they could be responsible for liaising between accounting and law firms and managing difficult conversations in the case of unpaid invoices (in-house counsel can feel overwhelmed if they don’t fully understand the system while law firms grow impatient waiting for unpaid bills).

In-application support documents, videos, or interactive, guided walkthroughs can help address “how-to” questions. For those trickier use cases, utilize 24/7 support via the application, phone, or e-mail. Ensure external users of the system, for example, law firms using your e-billing system, are adequately trained and supported by the vendor to support external user adoption and avoid them directing technical queries to your team. The training addresses the “making the tool as easy to use as possible” part of the user adoption challenge. However, as mentioned above, other factors are at play, and relying solely on training may not improve usage.

WHAT’S IN IT FOR THEM?

People need to be motivated to repeatedly use the new system to the point where it becomes routine. One way to ensure repetition is to motivate the individual to repeat the process because they personally benefit. What this is will depend on the user. For a C-level executive, it might be how easily they can generate their weekly report. For a junior lawyer, they might save time because manual steps in their daily processes are now automated. The full spectrum of benefits should be communicated clearly, from legal spend reduction to day-to-day efficiency gains. These benefits will not appear immediately – due to the learning curve, there may be a perception of it taking longer – so set expectations. Use different methods of communicating; 1-2-1s, town halls, internal newsletters, etc., as individuals prefer to receive information in different ways. Share company progress towards these goals regularly, and it helps to show employees how their system usage and data input is contributing to transformation, perhaps through reports on their dashboard. Regardless of your benefits, how you communicate them, and how you measure progress towards them, the message needs to come from the board (top-down communication) to hammer home the strategic significance of the technology investment.

INCENTIVES/GAMIFICATION

Gamification uses game-like elements to generate positive emotions and user experiences. It’s widely used by brands (such as loyalty cards, online training courses, or fitness apps) as such tactics harness our instincts of competition and curiosity, rewarding behavior and motivating us to repeat it. Because of the positive experience, the individual is suddenly in control rather than being forced to use the software, which also contributes to habit forming. The most modern tools in the market have borrowed gamification elements to improve the user experience. For example, in-app interactive walkthroughs allow you to choose your journey through the software, your speed of progress and show you how far from the end you are.

Some software tools give you badges based on your time logged in and as you progress from beginner to expert. It might sound patronizing, but it’s human psychology. It works, which is one of the reasons why modern software has a better user experience and, therefore, the adoption rate. You can use competition to incentivize your team to use the new software by creating leaderboards and prizes – for example, the number of new matters created in the system per month. The tool itself will hold this data, encouraging them to become familiar with reporting and dashboards to keep track of the scores. You should also encourage your legal software vendor to hold ‘user experience/UX’ days with groups of users and work with them to incorporate elements of gaming and competition into the session, as this will improve the speed of education as well as make the sessions more enjoyable!

PEER CHAMPIONS AND PHASED ROLLOUTS

Within your organization, you will have people that are positive and determined to see the project succeed and people that will cling to every negative experience. Both types of people will share their experiences with their colleagues. You want to make the positive people “champions.” They may be responsible for training, being a port of call for issues, liaison between stakeholders, and being trusted by their colleagues to address these issues with the project leads.

Ideally, you will have included stakeholder representatives throughout the project to ensure software workflows accurately reflect real life, as the more accurate the workflows are, the easier adoption is. However, there may still be issues despite your best efforts, so if it’s not too late, phase your rollout so these issues are ironed out early on and impact as few people as possible. Your champions should be included in these rollout groups, but you want to keep complainers in a later rollout where possible! If a skeptical person has an unpleasant experience, this will confirm their fears. Likewise, the champion seeing benefits will have their positivity confirmed. Controlling the positive and negative experiences, and therefore peer-to-peer communication will give you better user acceptance rates.

LISTEN TO FEEDBACK

Schedule regular feedback sessions with your legal software provider to update them on what is working, not working, feature requests, etc. These should continue for as long as you use the product. A good vendor will take the initiative on this process (at Onit’s European legal spend management solution BusyLamp eBilling.Space, we also send out surveys to get feedback on user experience, bottlenecks, helpdesk support, feature functionality, etc.), but to get the maximum benefit, you need to listen and document internal feedback to report back to the legal tech vendor. In collecting negative feedback, there must be a balance. Make sure you have early-adopter power users who are detailed, fair, and critical in their feedback while weeding out those prone to complain about complaining’s sake. But nevertheless, document ALL complaints (perhaps by using the champion), see if they can be fixed internally, and escalate to the software provider if this is not possible. Close the loop by letting users know how you addressed their issue and what the resolution is. It’s important to know the shortcomings of the system and how it’s failing to meet requirements – if these are genuine and can’t be resolved, then it’s a valid cause of frustration for the team.

LEARN FROM OTHER DEPARTMENTS

While digitalization is new for many legal departments, your colleagues in other departments may be quite advanced in their technology journey. However, while the legal technology itself may be unique to the business, the user adoption challenges will likely not be. Ask around the business (a good starting point is HR) to benefit from existing change management tools and strategies. Ask them what they have tried and what worked and failed. The IT department may have been involved in multiple rollouts of new software. Learn from your colleagues across the business.

MAKE IT PERSONAL

Who are the people behind “the system,” both internally and working for the software provider? Show employees that rather than just being a piece of technology, there are real people behind the system who can advise and support them. If necessary, organize video meetings to get to know each other or implement user days with your tech vendor. While the in-app help documents and support functions are useful and should be encouraged, getting to know and building a relationship with the people managing the tool will aid adoption by improving perception. Plus, it’s harder to push back and reject other humans than it is a faceless piece of tech!

MAKE IT MANDATORY

Being forced to use a system means not being in control, not being motivated for any perceived reason, and being prone to friction. However, the fact you have invested in legal technology means usage is mandatory, and our experience is that user adoption is improved when there is a clear message from the start that usage is not optional. Used in conjunction with the techniques above, you can create a positive, motivating environment instead of a forceful, heavy-handed approach to mandatory adoption.

Request a demo of eBilling.Space today and see our RFP functionality for yourself.

In aviation, a pre-flight checklist lists tasks that pilots and aircrew should perform before takeoff. It aims to improve flight safety by ensuring there are no forgotten essential tasks. Failure to correctly conduct a pre-flight check using a checklist significantly contributes to aircraft accidents.

Although nowhere near as critical as air safety, several law firms have established the principle of running “pre-flight checks” on their e-Bills before submitting them to a legal spend management or e-Billing system such as BusyLamp eBilling.Space. This is to correct any obvious errors on the e-Bill and reduce the % of invoices rejected in the first stage of the validation process. This leads to invoices being accepted and paid by the client faster. Over time, you can identify common errors and make processes at the firm can be more accurate and efficient. It also improves customer satisfaction, as it’s frustrating for in-house clients to receive non-compliant invoices.

One useful tool to support such “pre-flight checks” is an e-Billing Operating Procedures (e-Billing OP) document. Usually, one exists for each e-Billed client entity, covering the key validation rules for each e-Bill and the broader policies and protocols for working with that specific client and legal e-billing software.

Such documents are becoming more common at law firms. Billing Standard Operating Procedure documents come widely mandated in financial and government organizations. Several law firms have adopted and tweaked the idea to have something specific to legal e-Billing. With the increase in corporate counsel buying legal e-Billing software comes an increase in the number of clients that need billing in this way. It also adds to the volume and variety of billing guidelines that firms must remember. Operating Procedures documents allow these to be easily recalled and accessed and help prevent simple mistakes.

In this blog post, we’ll cover how to create and maintain your e-Billing OP document, sample “pre-flight checks,” and how to deal with billing errors.

DOCUMENTING THE E-BILLING OPERATING PROCEDURES

Many law firms have either written or are developing e-Billing OPs for every e-Billing client and/or generic e-billing tool. In order to gain the maximum benefit from this exercise, you need a consistent template against which to write all the e-Billing OPs. Your e-Billing OPs should include the following:

• The overall client e-Billing process flow and project scope.
• Timescales for valid billing, e.g., within xx days of the work.
• How to submit WIP and invoice data?
• How to use/invoice alternative fee arrangements?
• What data validation rules apply?
• How are disputed invoices/time entries handled?
• What is the escalation process for correcting rejections within the law firm?
• When will the valid invoices be paid?
• What expenses/activities may get disallowed?
• What UTBMS codes are required?
• How to amend/resubmit invalid data?
• Are any statutory/regulatory statements required?
• Are there any budgets set/how are they handled?
• Who to contact for queries?

The Operating Procedure may include the non-e-Billing agreed Protocols and Policies governing the client/law firm commercial relationship. Edit these if access to sensitive data is to be restricted.

PRE-FLIGHT CHECKLIST: VALIDATION OF E-BILLS

In addition to the policies mentioned above, your Operating Procedure document must include the checklist of validation criteria to avoid unnecessary invoice rejections. These cover quite basic e-Billing criteria for common and avoidable oversights. Taking the time to do these checks will save time in the long run. Some validation checks typically covered in the pre-flight checklist include the following:

• Are the hourly rates correct and as agreed?
• Are the timekeepers valid, and if required, are they pre-approved?
• Is the time being billed within the agreed time limits?
• Is there evidence of block billing?
• Are the narratives clear? Is there a minimum number of words required?
• If required, are there UTBMS codes for tasks/activities/expenses?
• Are there any disallowed expenses (e.g., Online Research, Local Travel), activities (e.g., Reviewing Files), or timekeeper classifications (e.g., Intern or Trainee) on the e-Bill?
• Are there any budgets or caps on this matter? Are we still within these limits with this bill included?

Subject to a few exceptions, most of the errors detected at this stage can be easily corrected. Some errors can be resolved by the e-Billing team, for example, missing timekeepers or incorrect rates. Other more significant errors, i.e., missing activity codes, vague narratives, block billing issues, tax errors, or other billing guideline breaches, must be referred to the revenue controllers or the firm’s legal team. This may inevitably delay the submission of the e-Bill. It’s important to note that the client would reject the invoice anyway, so it’s still faster to catch the error before submission.

Regardless of the type of error, they should get documented and their resolution communicated to the legal team. This helps your firm identify common errors and improve the billing accuracy (and, therefore, the processes’ efficiency) in the future.

Many law firms have implemented additional processes upon matter opening and will set an e-Bill indicator or flag in their Time and Billing system to show that this matter must be e-Billed. This will notify the matter partner/lawyers and e-Billing coordinator that crucial data items are required to stop the matter from being billed if missing. The firm’s e-Billing team can then run audit reports on a client-by-client basis to check that the expected data is present before the matter gets billed. (As noted above, you should have processes to refer many of these issues back to the business to resolve.)

COLLECTING CLIENT REQUIREMENTS FOR E-BILLING OPERATING PROCEDURES DOCUMENTATION

Now that you have the template for building your operating procedures document, you may still be wondering how to identify the clients’ e-Billing requirements in the first place! Ideally, the in-house client will have supplied you with a billing guidelines document signed off by both parties. You then use this to populate a “client matrix,” which includes the client’s data and billing requirements, your law firm’s data requirements, and any administration and special installation guidelines. In the interest of centralization, we recommend that the client billing guidelines and other specific e-billing requirements are in the e-Billing OP documentation. They must be visible to the relevant parties and adhered to by the legal team and the firm’s e-Billing/finance function.

THE CLIENT MATRIX IS PRIMARILY A SERIES OF TASKS WITH DATES FOR COMPLETION. THE MAIN SECTIONS ARE:

• New Client setup – includes client ID, e-Billing software vendor details, bill format, contact details, timekeeper types, and entities in scope.
• New Client Implementation Checklist – includes UTBMS codes, invoice template details, login, and password details, validation lists, expense codes, testing requirements, and go-live dates.
• Portal set- up – includes client and law firm data setup, user setup, rates and timekeepers, and reporting metrics.

THE INFORMATION FROM THIS CHECKLIST IS CROSS-REFERENCED AND INCLUDED IN THE E-BILLING OPS. COMPLETING THE CHECKLIST WILL HIGHLIGHT OTHER TASKS TO FOR COMPLETION FOR A GIVEN CLIENT, SUCH AS:

• Is any timekeeper mapping required? – Typically, from the law firm’s system to the client timekeeper classification.
• Are any data extracts needed? – e.g., existing open matters, timekeeper uploads, agreed rates, etc.
• Communications to the legal team – mandatory task/activity codes/Narratives etc.
• Client work types, is a PO number needed?

As with the Operating Procedures, the data-gathering checklist comes from the law firm’s e-Billing coordinator/team. Although these main sections refer to “new clients,” the client matrix should be updated if billing guidelines, or any other procedures from the client, change.

OPERATING PROCEDURES MAKE E-BILLING EASIER

There is no “one way” to do e-Billing, which is different in many law firms. One core difference is whether e-Billing is centralized or decentralized and the associated consequences of that approach. What seems consistent (and works) is when firms create a dedicated e-Billing specialist team. These carry various names but are essentially a team responsible for successfully uploading e-Bill files to the e-Billing vendor/client portal. This team can be in-house, near-shored, or offshore but will need clear Operating Procedures for each client with all possible outcomes and options documented and a clear escalation path for all unresolved queries. They will also require a general support model covering other non-client-specific scenarios. This level of documented support may be more important if the team is working offshore or remotely.

The scope of e-Billing is changing and is far from the original concept of loading e-Bills into a portal, handling the rejections, resolving issues, and getting the bills accepted. Evolving from this original requirement came the addition of matter budgets to the portal and the law firm’s responsibility to maintain them and ensure they are adhered to. More recently, we have seen clients make “added value” requests, such as adding client-only data to the e-Bill (such as their work types) and unbilled time and WIP uploaded to the e-Billing portal. This extension to the scope will only increase as the adoption of “beyond e-Billing” legal spend management technology, such as AI and machine learning, is spread wider. These requests are all helping in-house clients better understand their matter budgets and legal spend, and your law firm is a vital partner in assisting them to achieve these goals. But with this additional service comes complexity, making the need for clear e-Billing documentation at your firm even more critical.

Written by Bryan King

Before looking at UTBMS issues affecting law firms and in-house departments, we first need to distinguish between ”full” e-billing compared to the uploading of a copy of a paper bill or the keying of invoice details to a client or third-party web site. Full e-billing involves the production of an electronic file, usually in one of the LEDES formats (Legal Electronic Data Exchange Standards), which contains not just the invoice header, matter information and bill totals but a detailed breakdown of timelines and expenses. This detail is coded using the Uniform Task-Based Management System (UTBMS), also known as ABA task codes, which is comprised of sets of codes that help breakdown legal work and expenses across a timeline of activity to a fine level of detail. The codes were designed to provide clients and law firms with a common method for identifying the work breakdown and cost information of legal services.

There are legal task code sets for different types of legal work (e.g., Litigation, Bankruptcy, Trademark, Project/Transactional and Counseling) and a set of activity codes to categorise “how” the work on the matter is being done. For every matter, the in-house client receives an itemised bill with full transparency of the outside counsel fee earners who worked on the account, what tasks (e.g., taking a witness statement) and activities (e.g., drafting a letter) they undertook, and the time taken, the rate and cost of the item of work. Once the e-bill is generated, the information is validated against client guidelines held in the e-billing solution.

The e-bill passes various levels of validation before being uploaded to the client’s systems where it is then authorised and paid. The in-house legal team is then able to use legal spend management software to analyse the billing data using the UTBMS code detail and compare like-with-like information across all their outside counsel submitting e-bills.

The benefits of this approach are many. Corporate legal operations teams can easily compare and contrast the cost and efficiency with which different law firms execute similar matters. Such insight allows in-house lawyers to have intelligent and well-informed conversations during law firm reviews and re-negotiations. Over time, this enables the corporate legal department and law firm to become smarter in the way they execute matters.
THE IMPORTANCE OF ACCURATE LEGAL TIME RECORDING

It is outside counsel’s responsibility to maintain accurate time records, detailing the time spent on each item of work throughout the day. Without proper time records, the billing entries must be reconstructed from memory and the time spent on each task could be based on nothing more than a guess. This practice could ultimately lead to overbilling. Therefore, it is imperative that bills are based on accurately documented time records that detail each task and activity performed. However, daily time records are not enough if the entries are recorded in a block billed format.

BREAKING THE BLOCK BILLING PRACTICE

Block billing occurs when several discrete tasks or activities are recorded under a single time unit, rather than itemising the time spent on each separate activity. In-house clients usually prohibit this practice because it makes it difficult, if not impossible, to determine whether the work performed and the fees incurred are reasonable. Although most examples of outside counsel billing guidelines prohibit attorneys from submitting invoices that are block billed, clients typically allow their attorneys to correct such entries without penalty.

POSITIVES OF USING UTBMS CODES

As noted above, the UTBMS codes are a powerful tool for analysing patterns and comparing performance.

UTBMS information is, of course, useful to compare how law firms deploy their resources for work on similar phases/tasks/activities of like matters (e.g., percent of partner, associate or paralegal time and fees) but also reveals the average and median rates, as well as by level of resource for that legal work. Examining activity at this level across firms invariably reveals diverse practices with the best and worst practices being immediately apparent. When addressing such issues with firms, the client has the data, and the data is based upon that firm’s actual invoice entries.

The information is also useful for examining billing on diverse matters, as the UTBMS information can be used to compare the performance of multiple firms working on the same matter as well as compare individuals within the same firm working on the same matter.

In the past 20 or so years, there has been a shift. Clients are now requiring their outside counsel to conform to billing practices that provide more than just a basic level of standardisation. These standards are designed to make non-compliant charges stand out where they may have been buried previously.

PROBLEMS WITH UTBMS CODES

On the one hand, the standardisation offered by the Uniform Task-Based Management System (UTBMS) and Legal Electronic Data Exchange Standard (LEDES) codes have created a path towards greater transparency in legal spend management. Their implementation, however, created issues of their own.

UTBMS codes are problematic for several reasons but primarily because they can be unreliable and the system is totally reliant on each timekeeper to provide accurate data, which they often fail to do. Firstly, timekeepers must be trained and become familiar with the expansive list of codes – a large undertaking. For instance, the Litigation Task Codes (one of several such code sets) has close to 30 legal task codes, each of which rolls up to one of five phases. Adding to the complexity, there are nearly 30 activity codes that may also be applied and many more expense codes.

Secondly, this complexity can cause confusion as to which UTBMS code to apply to which task/activity. In addition, timekeepers may intentionally assign incorrect codes because they are either too busy to search for the correct code or are indifferent to how these codes may benefit them or their clients. One common action is that a timekeeper will select the first legal task code or a commonly used code from the UTBMS drop-down list in their billing software. This saves them time, and they do not see a negative impact from doing so. Other mistakes might be unintentional, involving issues with the billing software or accidental errors that can occur from a user typing or using a drop-down menu to input one of 30 codes. All these errors affect the integrity of the data, making the codes unusable for analytics and therefore frustrating the in-house client.

In truth, the framework of legal task codes was a great achievement for the industry and while it may be possible to refine the UTBMS codes it may not be feasible to make them any simpler. Solving this problem requires being active, adaptive, and creative with the data that is available.

USE OF AI (ARTIFICIAL INTELLIGENCE) IN LAW FIRM TIMEKEEPING

At a law firm, manual time and task logging is a time-consuming, error-prone process that does not benefit itself from being billable. Adding UTBMS or LEDES billing coding to the mix slows the process even further. On top of that, coding mistakes can lead to invoice rejections, while compromising collection rates along the way.

However, new AI (Artificial Intelligence) and machine learning applications can offer solutions to these problems. Instead of submitting bills without review and hoping the client does not dispute the charges, or manually reviewing billing entries prior to submission in order to comply with the client billing rules, new applications are being used to automate the process at law firms.

With previous e-billing solutions, lawyers and other timekeepers would have to manually look up the corresponding UTBMS code for each specific task or expense. With the new artificial intelligence applications, the software will automatically determine the correct code from the task, activity, or expense description. The code selection process uses the law firm’s own data to make sure the codes are accurate and uses machine learning to adjust to any changes. The outside counsel saves valuable time – addressing the issues mentioned above – and the in-house client receives accurate legal bills that have the level of data necessary for analysis of their matters, legal spend, and law firms.

Features and benefits of a legal spend management product like BusyLamp include:

• Easy to use and configure, and use intelligent defaults and data driven user set-up.
• Use text recognition software to read/convert the data from the e-bills or from pdf documents.
• Automate manual, low-skilled processes so both the in-house team and the law firm can spend more time on high value work instead of admin.
• Take advantage of the latest developments in AI (Artificial Intelligence) to automate the bill review process, categorise narratives and provide pricing analytics.
• Combine the above with machine learning to enhance the data mining possibilities of the invoice information for the client to make better and informed decisions.
• Offer a low cost of ownership as they require no on-site installation and are delivered as web services.
• Easily integrated with other client applications such as document/knowledge management, project management, calendaring, and the standard desktop – thus reducing costs for corporate legal IT.
• Cover a wide range of the business processes – from Requests for Proposals and Procurement, matter budgeting, resource planning, project management, through e-billing to a reporting and management information suite with easy-to-understand metrics for corporate legal departments and the law firms.
• They facilitate collaborative working between the client and their outside counsel and allow the client to review WIP and expenses in the pre-billing stages of each matter.

Request a demo of BusyLamp eBilling.Space today.

The Panama papers and Paradise papers cyberattacks against law firms. The issues of data harvesting emerging from the Cambridge Analytica scandal. The volume of reported data breaches. Cyber-attacks and data breaches are becoming inevitable as increasingly high quantities of information are stored electronically. In addition, GDPR has introduced requirements to notify the relevant supervisory authorities and individuals who may be adversely impacted much more promptly (within 72 hours of becoming aware).

As a result, there is a greater need for stronger controls around data security, both within your organization and for companies holding your data. A robust records management policy is integral to your company’s ability to understand what information is available, where it is, and in what format. Most importantly, it sets a clear framework for handling, managing, and storing that data.

You may have agreements with your external partners on how they manage and handle your data; historically, companies may have relied on this with little further investigation.

However, if you have ever handled the fallout of a data breach by one of your suppliers, you will appreciate the pressures of trying to assess the potential risk and exposure the breach might have on your company. All of which must be done within very tight timescales if you need to notify the authorities and individuals concerned.

USING LEGAL SPEND MANAGEMENT SOFTWARE TO IMPROVE DATA SECURITY

One often-overlooked tool that can help (both with an immediate investigation and future risk assessments) is a legal spend management system (Onit’s European legal spend management solution BusyLamp eBilling.Space). Integrated legal spend and matter management software can provide a wealth of information to help legal operations understand and manage the data that the law firms hold for you and can support you in building a records inventory.

Legal spend management tools can provide clarity on the following:

• The external law firms used,
• What type of work outside counsel are undertaking, and
• Who at the law firms has worked on the matter and therefore had access to your data.

Knowing the data shared with your law firm is vital for an immediate investigation. Access to the matter details in your legal spend management system will provide you with a good starting point to gather information. Basic information will include the law firm’s name and the person(s) in your firm who may be working on the matter(s). It will also provide a contact point at the law firm. Finally, based on the work, you will have a rough idea of the documents shared with the firm.

If you are looking to assess the risks of sharing your data both now and in the future, legal spend management software will provide details of the number of times your company has used the firm. With this, you can assess the risks and controls in place with all your outside counsel and carry out appropriate system security assessments. You can also more easily check that the law firms have implemented and are complying with your records management and retention policies.

The amount and sensitivity of the data sent to your law firms comes from the type of work undertaken. Most companies will generally share similar types of data for specific categories of work with their external partners. As an example, for an employment issue, details about the employee and the grievance will be shared with the external counsel. Using the information in a legal spend management system about the types of work done by the law firms will help you assess the risks and controls each law firm has in place to protect your data and consider the best and most appropriate ways to transfer your data. Furthermore, it can help you build your records inventories.

Finally, as law firms record the time that a timekeeper spends working on a matter, invoice data captured by e-billing software will allow you to see who has access to your information at the firm.

Knowing and understanding the type and volume of data that your company has shared with your law firms will help you a) respond to and manage any data breach or data loss and b) understand the potential risks to your data. This knowledge will help you assess whether you are using the best legal technology for sharing your data and whether the processes you have in place to transfer your data are appropriate.

Learn more about BusyLamp from Onit, our end-to-end legal spend management solution built for European corporate legal departments. 

As legal data is highly sensitive, data privacy, cybersecurity, and compliance are the top corporate organizational focus areas. Yet despite the scrutiny in-house legal rightly applies to business activities and counsel, they are not necessarily applying this same focus when evaluating the legal technology, they use within their departments. The sensitive nature of the information that passes through legal systems means that data security should be paramount.

Anecdotally, we hear of legal tech projects where data security requirements are raised late in the game, sometimes after IT becomes involved in the project, and can result in the favourite vendor getting immediately disqualified from the selection because of weak security features and policies.

This is understandable. Most lawyers and even technology-savvy legal operations managers are not data security experts. The main focus when buying legal software are the features that assist in daily work and decision-making, so the “under the bonnet” functionality is not always front of mind, nor do in-house counsel necessarily know the right questions to ask.

The following list of security considerations will aid you in asking pointed questions so you can address system safety at the same time as the ‘core’ functional requirements of the technology. This will save you time in the selection process and make picking the right solution for you that bit easier. There is already a lot of cyber risk that could be affecting your company, your legal technology should not be one of these worries.

ENCRYPTION (“AT-REST-ENCRYPTION”)
Legal documents contain sensitive data. Therefore, encrypt with a secure and up-to-date algorithm. Many legal tech vendors encrypt the hard disk while storing unencrypted data in the database. This interpretation of at-rest encryption is a measure that prevents data leaks in the unlikely event of the theft of a hard disk. Onit’s European legal spend management solution BusyLamp eBilling.Space takes at-rest encryption to the next level by using AES256 to store customer data (including backups) with individual keys securely on the hard disk and in the database. The latter means we apply an additional layer of security as a countermeasure for potential cyberattacks.

ENCRYPTED TRANSMISSION (“IN-TRANSIT-ENCRYPTION”)
The data must not only be stored in encrypted form but must also reach the user securely. Therefore, all communication should be encrypted. Since the methods are prone to attack, always use an up-to-date secure version. BusyLamp uses TLS with the version >= 1.2.

DATA SEPARATION
Especially with software as a Service (SaaS) offerings, it is common for an application to be used by several customers. In this scenario, store client data separately from that of other customers. This prevents access to your data by other users “by accident” (e.g., due to software programming errors). There are several ways to separate data, and BusyLamp offers the most secure options. We can provide physical separation, i.e., a customer has their own server, or the most effective logical separation, i.e., a customer owns its database on shared servers.

DATA ACCESS RIGHTS
GDPR and other internal and external regulations often require access rights to be set at a need-to-know level. Therefore, the legal software must allow data visibility to be set individually for each user. BusyLamp works according to the “principle of least privilege” – the normal user can initially see nothing. Then, specific data access for in-house and outside counsel users is activated on an individual or via group logic.

DATA LOCATION
Everyone is talking about the U.S. PATRIOT Act, CLOUD Act, CCPA, GDPR, and similar data security regulations that can have a massive impact on our client’s data hosting strategies. Onit’s BusyLamp legal spend management software is a German product and hence not subject to any potential claims by the U.S. government under such acts. We store data securely at your preferred geographical location.

FIREWALLS AND SERVERS
Any application is only as secure as the servers it runs on. Every application connected to the Internet becomes a daily victim of automatic or targeted attacks. Therefore, a well-thought-out strategy to defend against these attacks by the legal software operator is essential to ensure the protection and integrity of your legal data. This strategy should include several nested measures (the “onion technique”). First, a web application firewall protects the application itself. In addition, the server group gets protected by a firewall. The last link in the chain is an optimally configured server that fends off all unauthorized access. An independent service should monitor all components and actively report deviations from the norm. Regularly updating all systems involved should go without saying to guarantee up-to-date and optimal protection.

INDEPENDENT SYSTEM PENETRATION TESTS
Precautions taken always look good on paper. But is the vendor keeping their promises? To find out, the legal software provider should have their systems tested regularly by an independent third party. This “planned attack” attempts to remove all security measures before a malicious attacker does. All vulnerabilities found are documented and submitted to the vendor for an immediate fix. BusyLamp is tested at least once a quarter by a team of experts; we also allow all BusyLamp customers to view the corresponding test protocols.

SOFTWARE PASSWORD PROTECTION
Robust passwords are essential to prevent unwanted access to the legal system. BusyLamp has configurable password settings that administrators can set to ensure user passwords are sufficiently strong and meet your company’s password policies.

DATA SECURITY RIGHT FROM THE START
The ability to mitigate the impact of any security breaches is important, but security gaps should not arise in the first place. Therefore, your chosen legal tech vendor must deliver regular training to those involved in developing the software to maintain a consistently high level of data security. When testing the software, check the actual functions and search known security holes (e.g., OWASP Top 10).

Request a demo of BusyLamp eBilling.Space today.