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What is a LEDES File and Why Should Legal Teams Care?

Have you ever heard the words LEDES file mentioned, and think to yourself what is that? Don’t worry, you’re not the only one! In this post, we’re sharing what a LEDES file is, and how it helps in-house legal departments uncover efficiencies for more streamlined processes, time savings, and reduced costs.

LEDES File Definition

LEDES is a simple file format with specifications that support hourly billing, flat fee billing, expenses, multiple currencies, and tax. Created by the LEDES Oversight Committee (LOC) in 1995, this informal group of corporate legal departments, law firms, universities, and software vendors sought to address legal e-Billing software issues with a “standard format for the electronic exchange of billing and other information between corporations and law firms.”

The LOC and their guidelines for LEDES format are guided by five basic principles:

  1. Keep it simple
  2. Make it unambiguous
  3. Diverge from existing formats as little as absolutely necessary
  4. Ask only for information the law firm is typically able to provide from their financial system
  5. Meet the needs of corporations, law firms, and legal industry software vendors to the maximum extent possible consistent with the first four criteria

The Benefits of LEDES Format for In-House Counsel & Legal Operations

Ease of Use for Your Law Firms

Your law firms use a variety of e-Billing solutions to submit invoices to their clients, a process that can be extremely time consuming without a standardized process. With its efficient coding system, LEDES format reduces the time law firms spend on invoice creation and task descriptions, while allowing your legal department to accept invoices in a uniform format for ease of processing.  

Improved Legal Spend Analysis for Your Legal Department

Another benefit for in-house legal teams is the billing analysis capabilities that LEDES file format provides. Submitting invoices in LEDES format to an e-Billing solution allows legal teams to extract valuable invoice data for a better understanding of where and how their money is spent, and empowers them to control costs by viewing services in proper context. This level of insight can then be used in reporting and analysis to improve overall departmental operations, decision making, and spend management.

Does Your e-Billing Solution Support LEDES?

Whether you are thinking about adopting legal e-Billing software, or considering an alternative to your current e-Billing system, look for a solution like SimpleLegal that accepts the most commonly used LEDES file formats. Law firms based in the US typically use “LEDES 1998B” (which cannot be used for invoices with VAT-style tax or any non-USD invoice), while law firms outside the US typically use “LEDES 1998BI”.

If you’re concerned that some of the smaller, boutique law firms that you work with will not be able to provide invoices in LEDES, a solution like SimpleLegal accepts the most commonly used LEDES file formats as well as PDF invoices. Plus, SimpleLegal has the capability to extract the data within your invoices for analysis so you’re collecting all the data you need to make informed decisions.

For more information on modern e-Billing software and how to find a solution that is a good fit for both your legal department and your law firms, download our guide, 8 Ways to Vet Your e-Billing Solution for Law Firm Adoption.