{"id":11717,"date":"2019-10-30T12:22:44","date_gmt":"2019-10-30T16:22:44","guid":{"rendered":"https:\/\/gutenberg-atl.staging.breakingmedia.com\/legal-innovation-center\/?p=11717"},"modified":"2019-10-30T12:22:44","modified_gmt":"2019-10-30T16:22:44","slug":"maximizing-efficiency-the-value-of-standardized-legal-billing-data","status":"publish","type":"post","link":"https:\/\/abovethelaw.com\/legal-innovation-center\/2019\/10\/30\/maximizing-efficiency-the-value-of-standardized-legal-billing-data\/","title":{"rendered":"Maximizing Efficiency:  The Value of Standardized Legal Billing Data"},"content":{"rendered":"<p><span style=\"font-weight: 400\">Many lawyers and legal departments are now familiar with billing codes and electronic invoice submissions.\u00a0 For example, Uniform Task-Based Management System (<\/span><a href=\"https:\/\/utbms.com\/\"><span style=\"font-weight: 400\">UTBMS<\/span><\/a><span style=\"font-weight: 400\">)\u00a0codes are a means of classifying legal services and expenses for the purposes of billing.\u00a0 Similarly, when task-based codes like UTBMS are required, the Legal Electronic Data Exchange Standard (<\/span><a href=\"https:\/\/ledes.org\/\"><span style=\"font-weight: 400\">LEDES<\/span><\/a><span style=\"font-weight: 400\">) is used as a means of uniformly formatting law firm invoices for electronic submission.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">These and similar frameworks have been in used for <\/span><a href=\"https:\/\/www2.deloitte.com\/us\/en\/pages\/advisory\/solutions\/legal-billing-and-predictive-coding.html\"><span style=\"font-weight: 400\">roughly 20 years<\/span><\/a><span style=\"font-weight: 400\"> to bring uniformity and standardization to the billing of legal work.\u00a0 However, those who see the implementation of <\/span><a href=\"https:\/\/www.irmi.com\/articles\/expert-commentary\/legal-billing-is-there-a-change-in-the-wind\"><span style=\"font-weight: 400\">task-based coding<\/span><\/a><span style=\"font-weight: 400\"> as a mere client-pleasing exercise are missing out on useful information for their firms.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">The increased standardization of task-based coding and electronic invoice submission makes it easier for both clients and attorneys to get a full strategic and financial picture of what a legal matter entailed.\u00a0 This is a sentiment echoed by the author of a recent <\/span><a href=\"https:\/\/www.isba.org\/ibj\/2017\/04\/moneyballforlawyers\"><span style=\"font-weight: 400\">Illinois Bar Journal<\/span><\/a><span style=\"font-weight: 400\"> article:<\/span><\/p>\n<p><span style=\"font-weight: 400\">When it comes to optimizing your practice, do you trust your gut? Don\u2019t. If you aren\u2019t using data to measure what works and what doesn\u2019t, you can\u2019t be sure you\u2019re winning the game. The good news: your practice generates the data you need to gauge success and adjust as needed.<\/span><\/p>\n<p><span style=\"font-weight: 400\">In fact, allowing billing data to be used for business analytics was the intention of UTBMS and LEDES coding.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Task-coded billing information can be used to maintain or adjust how other matters are handled in the future to achieve the most favorable outcome with <\/span><a href=\"https:\/\/news.bloomberglaw.com\/tech-and-telecom-law\/insight-solutions-to-optimize-legal-practice-management\"><span style=\"font-weight: 400\">greater efficiency<\/span><\/a><span style=\"font-weight: 400\">.\u00a0\u00a0<\/span><\/p>\n<p><b>The Benefits of Task-Coded Billing<\/b><\/p>\n<p><span style=\"font-weight: 400\">The UTBMS and other task-based coding regimes were designed to create an easy to follow, \u201call cards on the table\u201d account of what work and expenses a legal matter required, and how much each step in the process cost the client.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">With this information, the client knows exactly what they are getting for their money, and the law firm can extrapolate how best to allocate their resources going forward.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For example, a recent article in the <\/span><a href=\"http:\/\/www.iicj.net\/subscribersonly\/10february\/iicj2feb-management-markpoag-datacert-usa_datacert.pdf\"><span style=\"font-weight: 400\">International In-house Counsel Journal<\/span><\/a><span style=\"font-weight: 400\"> highlights the utility of task-coded billing:<\/span><\/p>\n<p><span style=\"font-weight: 400\">[A] process that provides for actionable information from that data is central to being able to manage a legal department strategically and with greater efficiency. This is why the Uniform Task-Based Management System (UTBMS) code set is critical when looking at process improvements.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The creation of task-based coding regimes like UTBMS was clearly a step in the right direction toward transparency, and the ability to extract actionable meaning from billing data.\u00a0\u00a0<\/span><\/p>\n<p><b>The Problem of Human Error in Applying Billing Codes<\/b><\/p>\n<p><span style=\"font-weight: 400\">Even though various billing code systems like UTBMS retain the potential to maximize transparency between client and attorney, the reality of their implementation is often a mixed bag.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Various legal tech applications curb some of the difficulties involved in task-coding billing entries.\u00a0 There is no shortage of law firm billing applications that support UTBMS coding and LEDES formatted invoicing. \u00a0<\/span><a href=\"https:\/\/www.clio.com\/\"><span style=\"font-weight: 400\">Clio<\/span><\/a><span style=\"font-weight: 400\">,\u00a0<\/span><a href=\"https:\/\/www.rocketmatter.com\/\"><span style=\"font-weight: 400\">Rocket Matter<\/span><\/a><span style=\"font-weight: 400\">,\u00a0<\/span><a href=\"https:\/\/practicepanther.com\/\"><span style=\"font-weight: 400\">PracticePanther<\/span><\/a><span style=\"font-weight: 400\">, <\/span><a href=\"https:\/\/www.actionstep.com\"><span style=\"font-weight: 400\">Actionstep<\/span><\/a><span style=\"font-weight: 400\">, and\u00a0<\/span><a href=\"https:\/\/timeslipssage.com\/\"><span style=\"font-weight: 400\">Timeslips<\/span><\/a><span style=\"font-weight: 400\"> are just a few of the most popular examples.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Clients interested in tracking invoices and payments, and conducting internal data analysis would likely appreciate applications like Thompson Reuters\u2019\u00a0<\/span><a href=\"https:\/\/www.legaltracker.com\/\"><span style=\"font-weight: 400\">Legal Tracker (Serengeti)<\/span><\/a><span style=\"font-weight: 400\">, LexisNexis\u2019\u00a0<\/span><a href=\"https:\/\/www.counsellink.com\/\"><span style=\"font-weight: 400\">CounselLink<\/span><\/a><span style=\"font-weight: 400\">, and Wolters Kluwer\u2019s\u00a0<\/span><a href=\"https:\/\/www.wkelmsolutions.com\/products\/T360\"><span style=\"font-weight: 400\">TyMetrix 360\u00b0<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Still, although these systems support UTBMS coding and LEDES formatted invoicing, they usually requires a manual selection process and clunky pull-down menus to find the corresponding code for each time and expense entry.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Manual processes inevitably involve human error.\u00a0 Incorrect codes and idiosyncratic coding choices create the same vagueness and miscommunications the standardized system was designed to prevent.\u00a0 Although the uniform coding and categorization systems themselves are sound, improper implementation effectively nullifies the <\/span><a href=\"https:\/\/www.lawtechnologytoday.org\/2019\/06\/computer-assisted-legal-billing-benefits-lawyers-and-clients-alike\/\"><span style=\"font-weight: 400\">benefits<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Considering the vital importance and potential boon generated from accurately formatted billing data, inaccurate coding clearly has the potential to be disastrous. Imagine basing strategic or financial decisions on faulty information.<\/span><\/p>\n<p><span style=\"font-weight: 400\">This fact is illustrated in a recent <\/span><a href=\"https:\/\/quislex.s3.amazonaws.com\/media\/insights-articles\/4_Essential_Components_for_a_Successful_Legal.pdf\"><i><span style=\"font-weight: 400\">Inside Counsel<\/span><\/i><\/a><span style=\"font-weight: 400\"> article as follows:<\/span><\/p>\n<p><span style=\"font-weight: 400\">While technology is requisite as an enabler for managing legal invoices, effective control rests on the creation of robust billing guidelines and accurate data collection\u2026 factors like the development of robust billing guidelines, the strict use of UTBMS codes, and the subsequent review of every line item of every invoice for conformance to your billing guidelines are prerequisite.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">In other words, law firms and clients will see returns on task-coded billing data based upon what is manually entered.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Although many applications make it easier to bill in whatever way a firm chooses or a client requires, it is the consistency and accuracy of the billing codes that will determine how useful the billing data will be.<\/span><\/p>\n<p><b>How to Ensure Actionable Billing Data<\/b><\/p>\n<p><span style=\"font-weight: 400\">New advances in machine learning and other software technologies are <\/span><a href=\"https:\/\/www.healthdatamanagement.com\/list\/13-leading-computer-assisted-coding-vendors\"><span style=\"font-weight: 400\">already being used<\/span><\/a><span style=\"font-weight: 400\"> in the medical industry for coding physicians\u2019 notes and other categorization tasks.\u00a0 These same technologies provide the promise of ensuring actionable billing data for law firms and their clients.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">A recent\u00a0<\/span><a href=\"https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/us\/Documents\/finance\/us-fas-legal-billing-and-predictive-coding.pdf\"><span style=\"font-weight: 400\">Deloitte report<\/span><\/a><span style=\"font-weight: 400\">\u00a0makes plain the benefits of these legal tech advancements:\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">[C]urrent technology advances are providing opportunities to better measure, manage and optimize legal spend, even while leveraging conventional management tools\u2026 These advancements are expected to enhance management activities for both corporate law departments and law firms, and potentially allow the promise of activity-based management for legal activities to become better realized.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Indeed, computers process data the same way, every time, and with greater accuracy and speed than humans.\u00a0 For example, studies have demonstrated that predictive analytical tools can outperform unassisted attorneys in deciding the efficacy of a claim. A challenge by <\/span><a href=\"https:\/\/www.bbc.com\/news\/technology-41829534\"><span style=\"font-weight: 400\">Case Crunch<\/span><\/a><span style=\"font-weight: 400\"> recently showed that the computer had an 86.6% accuracy level, while the human participants achieved only a collective 66.3%.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Just like in the medical industry, data-driven applications now allow <\/span><a href=\"https:\/\/www.lawtechnologytoday.org\/2019\/07\/how-billing-optimization-can-increase-revenue\/\"><span style=\"font-weight: 400\">law firms<\/span><\/a><span style=\"font-weight: 400\"> and <\/span><a href=\"https:\/\/gutenberg-atl.staging.breakingmedia.com\/legal-innovation-center\/member-content\/optimize-transparency-with-your-outside-counsel-billing\/\"><span style=\"font-weight: 400\">their clients<\/span><\/a><span style=\"font-weight: 400\"> to automate the process of coding expenses and time entries entirely.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Using computers to handle the coding of billing entries cuts down on the non-billable time it takes to create invoices.\u00a0 But perhaps more importantly, automating the process of coding legal work also prevents human errors and idiosyncrasies, thereby standardizing the categorization of billing data.<\/span><\/p>\n<p><b>Conclusion<\/b><\/p>\n<p><span style=\"font-weight: 400\">Many attorneys are familiar with task-based billing codes as a means of keeping their clients happy. The fact that coded bills are often client requirements, as opposed to a proactive decision by a law firm, should not detract from the goldmine of information and utility available in a law firm\u2019s own billing data.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Recent advances in technology provide a number of tools for law firms and legal departments to improve efficiency.\u00a0 Not to be overlooked is the analysis of standardized billing data, and its value in optimizing a law firm or legal department\u2019s operations far beyond just billing and legal spend.<\/span><\/p>\n<hr \/>\n<p><em><span style=\"font-weight: 400\">Holly Urban\u202fis the CEO and co-founder of\u202f<\/span><b>EffortlessLegal LLC<\/b><span style=\"font-weight: 400\">, an award-winning thought leader and innovator in software automation solutions for law firms.\u202fHolly\u202fhas over 20 years of progressive experience in management and leadership positions in a variety of industries including technology, consulting, banking, retail and hospitality.\u202fFor more information, visit us at\u00a0<\/span><a href=\"https:\/\/effortlesslegal.com\/\"><span style=\"font-weight: 400\">https:\/\/EffortlessLegal.com<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p class=\"summary\">Recent advances in technology provide a number of tools for law firms and legal departments to improve efficiency.<\/p>\n","protected":false},"author":88988,"featured_media":4637,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3291,3637],"tags":[1268,6701,47,5546,5567,6101,182,329,3833],"class_list":["post-11717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-billing","category-member-content","tag-billing","tag-billing-data","tag-data","tag-efficiency","tag-effortlesslegal","tag-holly-urban","tag-legal-tech","tag-legal-technology","tag-member-content"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - 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