Overbilling. Churning. It’s an awkward topic. No one likes to discuss it, and more importantly, no one wants to consider that their own local counsel is practicing seedy billing practices. And even when it’s suspected, it’s difficult to prove.
Now more than ever, corporate legal and insurance claims departments are strapped with tight budgets; it’s time to rethink the way law firm expenses are controlled and managed. Many support the idea of moving away from traditional hourly billing altogether and toward performance-based compensation, flat rates, and other non-traditional arrangements. Either way, law firm billing needs better oversight and management.
How Legal Technology Can Help
Regardless of how you structure a deal with your law firms, the resulting bills need to be managed to ensure fairness and accountability on both sides. Legal e-billing technology allows clients to better regulate law firm efficiency, enforce counsel guidelines, ensure timekeeper rate accuracy, compare the time it takes to perform specific tasks across timekeepers and firms, and catch invoice disputes automatically.
E-billing can hold law firms and clients alike to their agreed upon fee and payment arrangements. More importantly, studies indicate e-billing can return anywhere from 3-10% per year in savings on your legal spend.
In looking for an e-billing system, ensure that it includes:
- Automatic validation of law firm/vendor and matter assignment
- Immediate rejection of duplicate invoices
- Validation of billing rates and contract terms
- Easy targeting of undesirable billing practices
- Automatic rule enforcement that highlights critical billing violations, provides substantive error feedback to the law firm, and requires issue resolution before the invoice can be submitted
- Call-outs of questionable items for more subjective client focused review
Relationships between law firms and clients can be stronger when the strain of invoice management is lessened, and trust is maintained. Efficient, clear, and transparent e-billing tools facilitate that bond.