The billing process naturally introduces tension between in-house legal teams and law firms. Surprise fees that lack justification, unauthorized charges, invoices submitted weeks or months after work is completed – these are just a few sources of frustration, and in some cases, conflict.
To bring standardization, and most importantly, visibility to the process, corporate legal teams are turning to legal billing guidelines, a document designed to outline a legal department’s billing expectations of their law firms. By clearly communicating how law firms should work with and bill legal departments, how matters should be staffed, and what line items will and will not be reimbursed, to name a few, alignment is established between both parties which makes it easier to work towards a shared goal.
Guidelines Are Great, But What About Enforcement?
Even the best, most thoughtfully crafted, and concise billing guidelines have little to no value if they’re not actively enforced. Legal technology, specifically legal operations platforms with e-Billing and spend management capabilities, have emerged as the primary tool to facilitate enforcement and prevent costly billing errors from becoming poor habits that are hard to break.
To help legal departments assess current or new e-Billing and spend management tools, here are 3 benefits of enforcing your billing guidelines with legal technology:
1. Time Savings
Without technology, enforcing billing guidelines requires a lot of one thing – time. Someone from the legal department, often the lead attorney on the matter, must check each line item against the department’s billing guidelines. If there’s an inappropriate charge or rate increase with no explanation, the attorney must reach out and resolve the issue which could take hours or days of back and forth with the law firm. It’s a frustrating process that forces attorneys to focus on administrative tasks, ultimately taking time away from higher-impact legal work.
How to Maximize Time Savings with Legal Tech
This is where technology can make a huge difference. e-Billing and spend management solutions automate the process of reviewing invoices against your billing guidelines. By setting up programmatic and configurable rules within the system that match your billing guidelines, a robust solution can reliably check submitted invoices against those rules, and offer the flexibility to automatically flag discrepancies, make adjustment on your behalf, and even reject them outright.
A lot of systems have limitations on how and what type of rules can be enforced, limiting the department’s ability to truly automate billing guideline enforcement. Look for a solution that’s highly configurable and allows you to create and enforce the review, routing, and approval process that best aligns with your needs and business processes. The last thing you want to do is introduce new technology that adds more complexity for your attorneys and still requires them to spend time scrutinizing line items.
2. Cost Savings
Even teams who have the time to identify non-compliant charges run the risk of overlooking some, especially if working with dozens of law firms and managing hundreds, if not thousands, of invoices. Many legal teams also get pushback from their law firms, who aren’t sure why certain charges are being adjusted, flagged, or rejected. This often spurs an internal discussion between your firm’s attorneys and partners before a corrected bill can be issued. Time lost to correcting the issue subsequently causes billing delays. Unfortunately, this prevents the legal team from seeing any cost savings and can result in late or surprise charges for finance.
How to Maximize Cost Savings with Legal Tech
As mentioned above, legal tech enables legal teams to implement specific rules, such as “we won’t pay for depositions over $5,000” and can flag, but also auto-reject the invoice with a notification email detailing why the charge was rejected. This eliminates confusion and the need for legal departments to get caught up in an unnecessary conversation around which charges are appropriate.
Beware! Not all systems allow you to make auto-adjustments to an invoice or enforce certain alternative fee agreements (AFAs) and require someone to manually assess the issue and push it through. For more about these payment structures, check out these sample alternative fee arrangements.
3. Control and Streamlined Process
When working with multiple law firms, getting them all to bill consistently and in-line with your departmental and organizational standards can be an uphill battle. Billing guidelines give you the opportunity to set the standard and legal technology allows you to enforce it, creating positive billing habits that reduce expensive errors, save time, and ultimately put control back in your hands.
How to Maximize Process Control with Legal Tech
Implementing a legal tech solution, like SimpleLegal, provides visibility into what outside vendors are doing so costs are more predictable, and budgets are adhered to. When it comes to billing guidelines, being able to act immediately on an inappropriate charge helps train your law firms on what is acceptable in regards to your company’s standard operating procedures. By creating this instant feedback loop, you’re helping to mitigate points of tension to create stronger relationships with your law firms.
Start Enforcing Your Billing Guidelines
Whether you’re starting to craft your billing guidelines, are thinking about ways to improve optimize your billing guidelines, or are interested in replacing or implementing legal tech to enforce them, SimpleLegal is here to help. Our legal operations platform equips legal departments with the intelligent workflows to facilitate the enforcement of complex guidelines, while providing tools for reporting, automating accruals and budgeting, vendor management, and more.
Download our comprehensive guide on billing guidelines best practices, or schedule a demo and learn why data-driven legal departments use SimpleLegal to run a more efficient department.