The billing process, by its very nature, creates conflict between in-house legal teams and outside law firms. Surprise expenses that are unjustified, unapproved charges, and invoices submitted weeks or months after work has been finished are just a few examples of sources of dissatisfaction, and in some circumstances, conflict.
Legal billing standards, a document meant to explain a legal department’s billing expectations of its law firms, are becoming increasingly popular among corporate legal teams as a means of standardising and, most crucially, increasing transparency in the process. By explicitly explaining how law firms should work with and bill legal departments, how cases should be staffed, and what line items will and will not be paid, to mention a few examples, alignment is formed between the two sides, making it simpler to work toward a same objective together.
Guideline development is excellent, but what about enforcement?
Even the greatest, most painstakingly drafted, and most succinct billing procedures are of little or no use if they are not consistently followed and enforced by the organisation. Legal technology, notably legal operations platforms with e-Billing and spend management capabilities, has emerged as the most effective instrument for facilitating enforcement and preventing costly billing errors from establishing bad habits that are difficult to break down.
Here are three benefits of using legal technology to enforce your billing requirements that can assist legal departments in evaluating their present or prospective e-Billing and expenditure management tools:
The ability to save time
Enforcing billing criteria in the absence of technology necessitates a significant investment of one resource:
- Someone from the legal department, usually the main attorney on the case, must review each line item to ensure that it complies with the agency’s billing policies.
- If an attorney discovers an inappropriate charge or rate rise without providing an explanation, he or she must contact the legal firm and attempt to address the situation, which might take hours or even days of back and forth.
It’s a time-consuming procedure that causes attorneys to spend their time on administrative activities, depriving them of time that could be spent on more important legal work.
How to Make the Most of Time Savings with Legal Technology
This is an area where technological advancements may make a significant effect. The use of e-Billing and expenditure management systems streamlines the process of evaluating invoices in accordance with your billing policies. The system can be customised to match your billing guidelines by creating programmatic and configurable rules within the system. A robust solution can then reliably check submitted invoices against those rules and provide the flexibility to automatically flag discrepancies, make adjustments on your behalf, or even reject them outright.
A number of systems have constraints on how and what types of rules may be implemented, which makes it difficult for the department to fully automate the enforcement of billing guideline compliance. Opt for an enterprise-class system that is highly adaptable and that enables you to design and enforce the review, routing, and approval workflows that are most aligned with your business requirements and procedures. The last thing you want to do is introduce new technology that increases the level of complexity for your attorneys while also requiring them to spend more time reviewing line items.
Team members dealing with dozens of law firms and monitoring hundreds, if not thousands, of invoices face the danger of overlooking certain non-compliant charges, even if they have the resources to do so effectively. Numerous legal teams also receive opposition from their own law firms, which are perplexed as to why some charges are being amended, highlighted, or denied in the first place.
As a result, an internal debate amongst your firm’s attorneys and partners is frequently necessary before a revised bill may be issued. Consequently, billing delays are caused by the time spent rectifying the problem. Unfortunately, this hinders the legal team from realising any cost savings, and it might result in finance costs that are either late or unexpected.
How to Get the Most Out of Legal Technology Cost Savings
For example, as previously said, law firm technology enables legal teams to create particular rules, such as “we won’t pay for depositions beyond $5,000,” and may flag but also automatically reject invoices, sending a notice email to the client explaining the reason for the rejection. The result is less uncertainty and the need for legal departments to become involved in a pointless discussion about whether charges are acceptable to pursue.
Beware! Most accounting software does not allow for the creation of automatic modifications to invoices or the enforcement of certain alternative fee agreements (AFAs). Instead, the system requires that an individual manually analyse the issue and push it through. For further information on various payment formats, please see the following example alternative fee agreements.
Control and a streamlined process are important.
The task of getting many legal firms to bill regularly and in accordance with your departmental and organisational standards might seem like an uphill struggle when you’re working with a large number of them. When you establish billing rules, you have the ability to set the standard; legal technology makes it possible to enforce those guidelines, resulting in good billing habits that eliminate costly billing errors, save time, and eventually return control to you.
How to Make the Most of Legal Technology for Process Control
Implementing a legal technology solution, such as SimpleLegal, gives visibility into what outside suppliers are doing, allowing expenses to be more predictable and budgets to be more strictly adhered to. Having the ability to act quickly on an incorrect charge helps instruct your law firms on what is and is not acceptable in terms of your company’s standard operating procedures when it comes to billing rules. By establishing this immediate feedback loop, you are assisting in the mitigation of sources of friction and the development of better relationships with your law firms.
Start enforcing your billing policies and procedures.
Whether you’re just getting started with your billing rules, are considering methods to enhance and optimise your billing guidelines, or are interested in replacing or installing legal technology to enforce them, this course is for you.