With the myriad responsibilities of a company’s legal department, in-house counsel would be well served to find the best ways to increase efficiency and productivity.
One of the most prominent ways to do so is using data-driven solutions to improve transparency with regard to outside counsel billing and expenditures.
Optimizing transparency with your outside counsel billing is easier than you might think.
Outside Counsel Guidelines that Work for You
Hiring outside counsel should not be an extreme burden to a firm’s legal operations and bill processing. However, billing inconsistencies, disruptions in management, and billing disputes can mar otherwise productive relationships. Implementing and enforcing strict guidelines for outside counsel could be helpful in negating potential points of contention.
On the other hand, improperly conceived or poorly maintained outside counsel guidelines will only make more work for in-house counsel.
Accepting unnecessary charges is not an option, yet constantly pouring over outside counsel invoices for billing accuracy and reasonableness of charges requires time expenditures that could be better used elsewhere.
This is a huge problem with a surprisingly easy solution.
Require Automated Standardization of Billing Data
By using billing automation, in-house counsel gains the advantage of enforcing standardized data from their partner law firms. This means in-house legal departments can easily compare billing data from one firm to another to ensure that they are actually comparing apples to apples.
For example, advances in technology are moving toward automated UTBMS and LEDES codes to fully standardize the coding of billing entries. Coded billing data is much easier and more reliable to use, as opposed to the idiosyncratic manual coding process plagued with inevitable human error.
Additionally, a recent Thomson Reuters report, “Latest Trends and Best Practices in Managing Outside Counsel” details how automation reduces billing disagreements by standardizing the determination of exactly where invoices are out of compliance.
Thanks to computer-assisted billing technology, bill processing works in real-time to catch inconsistencies for the most accurate billing possible.
The Thompson Reuters report also indicates that automated legal billing significantly expedites the legal billing review process, resulting in shorter review periods which in turn translates into saving money and optimizing productivity.
As the above examples demonstrate, artificial intelligence (AI) and machine learning technologies can drastically improve efficiency and transparency in dealing with outside counsel invoices.
Outside Counsel Can Help
As detailed in the recent American Bar Association article, “Working Effectively with Outside Counsel Checklist,” the ABA recommends a checklist to consider when analyzing outside counsel billing.
But this responsibility does not fall solely on in-house legal departments.
For example, the Illinois State Bar Association recently reminded attorneys of their obligation to conduct reasonable client billing. Indeed, the ABA Model Rules for attorney ethics provides eight factors for outside counsel to consider in ensuring their bills are reasonable.
A Data-Driven Solution
The opportunity to optimize transparency with your outside counsel billing already exists with EffortlessLegal.
In particular, EffortlessLegal’s BillerAssist LEDES Edition application provides the latest in artificial intelligence and machine learning to standardize law firm billing data with:
- Automated LEDES/UTBMS coding
- Automated billing rules compliance
- Automated flags to notify outside counsel in real-time whether they are charging too much for a particular task or for an entire matter
Your outside counsel can easily self-correct and streamline their efforts as they work and before they send you a non-compliant bill. Legal departments also receive standardized bills from all outside firms which allow greater ease of reporting and complete transparency from firm to firm.
Moreover, by using the BillerAssist LEDES Edition app, your outside counsel will receive advance notice on a line by line basis of all billing issues and thereby significantly reduce time and effort resolving billing disputes.
Outside counsel may be apprehensive about the prospect of completely overhauling their billing system and practices.
But this concern is one of the most compelling aspects of the new technology. BillerAssist LEDES Edition works with many existing billing programs – the app works as an enhancement as opposed to a replacement.
As more and more legal firms and departments adopt this useful and intuitive technology it will put further pressure on those firms who are content to continue with the old and less efficient methods.
Conclusion
In the face of new technology, law firms and legal departments alike should consider examining and improving their billing practices.
The old manual processes are slower, more error-prone, and much more difficult to standardize. With AI and machine learning, the manual processes of examining and potentially disputing charges every time in-house counsel gets an invoice ought be a thing of the past.
Billing automation is advancing the way legal departments and law firms operate with innovative solutions using real-time information to boost efficiency. Working with a more streamlined billing system is in the best interest of both parties.
Optimizing transparency in billing for both legal departments and law firms alike can be effortless.
Holly Urban is the CEO at EffortlessLegal, a leader in software automation solutions for law firms. Holly has over 20 years of progressive experience in management and leadership positions in a variety of industries including technology, consulting, banking, retail and hospitality. For more information, visit us at https://EffortlessLegal.com
