The business process of legal e-Billing (electronic invoicing) between an in-house team and outside counsel is rapidly growing and there are many successful implementations from which we can learn lessons. There are some key factors that can assist with the implementation of e-Billing and help ensure that both the in-house legal department and the law firms gain full 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 lack of detailed information and expertise when it comes to 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 straight-forward. But we believe that many in-house legal departments are not aware of the issues that may arise if an e-Billing initiative is not resourced or project managed correctly from the start. There are also a number of “best practices” that client organisations need to be aware of and apply in order to maximise the opportunities that can come 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 seen as a two way process and not just something that is imposed by the in-house legal team. A standard e-Billing checklist setting out the key questions that the law firm needs to know to ensure successful implementation should be agreed. Ideally no work should start until all questions have been answered, otherwise implementation can be significantly delayed.
The checklist should include questions on:
- 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 scope of the project – 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 should also be asked to commit to a minimum bill payment period following approval of the eBill. If these conditions are not agreed to 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 is likely to be dealing with upwards of five different e-Billing vendors and with several varying LEDES formats. The team responsible have to be able to log into each system, understand the differences, and what to do in the event that a bill is rejected to minimise bill turnaround time. In addition the systems have to be constantly updated with new fee-earner information and any changes to billing rates otherwise the system will reject them. For every 200 e-Bills issued in a month it is estimated that a firm needs to employ one individual to administer the systems. Without the experience, skill and discipline to administer the systems, collection time can be delayed significantly.
In-house legal departments need to appreciate this and also must ensure that they have chosen an e-Billing provider who is always available to the law firms for any queries. Professionally set up e-Billing providers like BusyLamp put a key focus on responding quickly and with high quality to law firms’ questions in order to ensure that not only the client but also their firms get the best possible service and therefore 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 is something that needs to be understood and contributed to by the fee earners, business development, finance, revenue, credit control and billing. Strategic implementation becomes even more important when a number of e-Billing projects with competing priorities are being rolled out at the same time. Likewise within the client organisation; all the stakeholders have to 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. Insofar the introduction of an e-Billing system does not differ from any other change of process of comparable scope. Legal departments need to ensure that their own internal processes and systems are capable of maximising 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 they have been 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 the authorisation and payment of 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 second glance. With my more than fifteen years of e-Billing experience, which I was also able to gain on the law firm side, I am in any case convinced that e-Billing pays off for firms as well. And this is not only because invoices are paid faster. Rather, law firms strengthen and improve their relationships with their clients if they support them in making eBilling a successful project.
Bryan King – November 2017