Your ultimate guide to legal e-Billing
The average legal ops team only has six full-time employees handling everything from project management and data analytics to finances. That’s a big reason why legal departments list “automate legal processes” and “implement new technology solution(s)” as some of their top priorities in CLOC’s 2021 State of the Industry survey.
Specifically, legal e-Billing solutions earned the title of the most adopted legal technology in Gartner’s 2021 Legal Planning & Budgeting report. These tools collect and organize financial data in one place, which allows legal teams to do everything from tracking spend to approving invoices in one central hub. This is an especially important asset since COVID-19, during which legal teams need to keep a closer eye on cash flows.
If you’re thinking about making the switch to legal e-Billing, we’re here to help. Keep reading to learn about the many benefits of legal e-Billing and how to find a digital solution that’s best for you and your team.
What is legal e-Billing?
Legal e-Billing is software designed to replace paper and email billing between legal ops teams and law firms. When legal teams have to manually conduct tasks like reviewing invoices and generating reports, it bogs them down. To save teams time and energy, a legal e-Billing solution automates and simplifies the entire billing process.
In essence, legal e-Billing solutions have two primary functions:
1. Invoice management
e-Billing invoice management allows legal ops teams to keep track of all their invoices in one central digital location instead of manually sorting through papers and old emails. Users can easily monitor the status of invoices (e.g., received, on hold, approved) with their dates alongside associated matter and vendor details.
Most e-Billing solutions also simplify the process of invoice approval, reducing email back-and-forth. You can send invoices to the appropriate party within the software and easily include a summary and relevant budget and accrual information. The software will also alert you once the reviewer has approved or rejected an invoice.
2. Spend management
Between 2018 and 2020, there was a considerable increase in the number of legal ops leaders who focused on tracking internal spend (a 35% increase) and external spend (32%). Tracking and understanding spend by creating spreadsheets from scratch is time-consuming and error-prone. A legal e-Billing system provides a much more efficient and accurate solution.
Spend management features give you access to real-time budget and accrual information at a glance. You can break this down by task, expense, activity code, vendor, or timekeeper to get a comprehensive understanding of your spend. Then, you can quickly download that information into spreadsheets for further analysis instead of creating them from scratch.
The spend management side simplifies managing accruals and can use the data to generate estimates vs. actuals reports. This helps you create more strategic budgets and gives you increased spend visibility.
What to look for in a legal e-Billing solution
With the continuous evolution of technology, it’s beneficial to look for advanced e-Billing features that will help you stay ahead of the curve. These five elements will keep you on track to get a high return on your investment in 2021 and beyond:
1. Pre-built integrations
A legal e-Billing solution that seamlessly integrates with existing apps and software like Outlook, IPfolio, iManage, and Box will save your team the time and the headache of duplicate data entry. This also helps prevent costly human errors.
2. Predictive reporting options
Predictive reporting capabilities help set your team and company up for long-term financial success. Instead of manually compiling financial data from multiple sources and analyzing it on your own, you can easily generate more accurate forecasts that take the full picture into account. This helps legal ops teams to better mitigate potential financial surprises and strategically identify future opportunities to save money. Additionally, as Deloitte notes, predictive options can “provide an entirely fresh perspective on the traditional UTBMS reporting environment.”
3. Metric tracking
Since legal ops teams don’t directly generate revenue, tracking legal metrics is the key to showing your team’s value as a strategic business partner. Look for a legal e-Billing solution that lets you easily monitor and measure categories like:
- Matters handled
- Spend by practice area
- Spend as a percentage of revenue
- Discounts and alternative fee arrangements (AFAs)
4. Adjustable access permissions
Egress’ Insider Data Breach Survey 2021 found that 94% of surveyed organizations experienced insider data breaches in only a year. User permissions help prevent sensitive information from being exposed by human error or malicious intent.
Additionally, changing what content different users can view helps them work faster by eliminating the need to sort through irrelevant information. For instance, you can customize access levels for finance team members so the only data they’ll see is related to their assigned projects.
5. Free training and customer support
The last thing you want to do when investing in a legal e-Billing solution is to pay extra to learn how to use it. Solutions that automatically include administrative training and responsive customer support will boost your team’s productivity and confidence in using the system to its fullest potential.
Benefits of legal e-Billing
While there’s an upfront cost to implementing a legal e-Billing solution, most legal ops teams find that the long-term operational and financial benefits outweigh it — only about 5% of departments reported being dissatisfied with their legal e-Billing system. Additionally, most systems don’t even cost 1% of a total legal spend.
Here’s how a robust legal e-Billing and spend management solution sets your team up for success:
Saves time and reduces human errors
Legal e-Billing solutions boost productivity by automating manual tasks. Roughly 90% of employees surveyed by WorkMarket and KCR Research noted that automating tasks led to “a reduction in manual errors, an increase in the speed at which tasks were completed, and better quality work product.” Additionally, 78% of business leaders said that automation saved them up to 30 hours a month.
Keeps operations running smoothly
Automated billing and approval processes improve “process development and project management,” which were listed as the primary job responsibilities for legal ops members in 2021. With this automation, individual legal ops members are no longer responsible for manually moving invoices to the next stage. As soon as a reviewer signs, the e-Billing solution passes it along to the next appropriate party. Then, you get a status update on its life cycle. These streamlined workflows greatly reduce silos and delays as well as lengthy back-and-forth communication to determine invoice statuses.
Enforces billing guidelines
Additionally, legal e-Billing solutions increase efficiency by automatically flagging invoices that don’t adhere to your legal billing guidelines. You no longer have to manually review each UTMBS task code and timekeeper rate, and this automatic enforcement of billing guidelines will ensure you maximize AFAs and volume discounts.
Generates data-driven insights to inform strategy
Legal ops teams need access to robust data to make strategic financial decisions and to demonstrate their value. With real-time spend data stored in one central location, a legal e-Billing solution gives you greater access to granular legal analytics and custom reporting options. This allows you and your team to make more informed decisions that strengthen the company.
Instead of trying to create a report based on data you manually inputted into Excel, you can use a legal e-Billing solution to quickly drill down information into categories like spend by practice area, matter, and timekeeper rates. Then, you can generate detailed reports based on those different criteria with a click of a button. This enhanced visibility and simplified process help legal ops teams to more easily (and more accurately) identify financial trends and issues as well as cost-saving opportunities.
For instance, these data-driven choices improve vendor management, allowing legal ops teams to generate reports about unbilled estimates vs. actuals to determine what partners make financial sense to work with. You can also improve the performance of your partner law firms and vendors by giving them evaluations that include accruals vs. actuals reports at the entity levels.
Helps quantify the value of legal ops teams
Not only do legal e-Billing solutions help legal ops teams to work at a higher level, but they also help teams to back up the value of this work to the C-suite using hard data. This is particularly important for teams impacted by COVID-19-related budget cuts or hiring freezes. As economic conditions stabilize, you can use objective information on your team’s performance to your advantage in budget and headcount discussions.
Assists with accrual monitoring
Because all the important information is stored in one place instead of spread across paper and electronic documents, it’s much quicker and easier to keep track of all your different legal accruals. With a 26% discrepancy between accrual estimates and the amounts actually invoiced by law firms, using a legal e-Billing solution to close that gap can save your company thousands.
Reduces strain on employees
Legal e-Billing solutions reduce employee stress by reducing tedious manual labor and providing quick access to the data they need to make complex, strategic decisions. With invoices, budgets, matters, accruals, and more in one easily accessible digital location, no one has to scramble to sort through paper piles to locate a misplaced file. Preventing employee burnout can mitigate approximately $1 million in annual losses.
Stay on top of your game with legal e-Billing
As the legal industry continues to embrace more digital solutions and hybrid and remote work options, the right legal e-Billing and spend management solution can help your legal ops team thrive in a changing environment.
Schedule a product demo today to chat with one of our dedicated product specialists and find out how our legal e-Billing solution can transform the way you do business.