E-billing technology and supporting bill review services are enhancing legal departments by allowing for electronic invoice submission, review, and payment processing. The Legal Electronic Data Exchange Standard (LEDES) created international billing standards to provide consistent legal data. LSG provides e-billing and bill review services that help clients track spending against budgets, ensure compliance with agreements, and generate detailed reports on law firm performance and costs. Moving to e-billing removes paper from the process and allows clients to better manage legal costs and vendor relationships.

1. E-billing technology LSG
e-billing
E-billing technology: In this article, Charlie Morgan, client without which uniform and consistent
relations executive of LSG, shares his views legal data could not be provided. The work
maintaining a cutting on how technology and supporting bill review started in the mid-1990s, when major US
services are enhancing the performance of law departments and insurers wanted to
edge corporate legal departments. better understand the services provided by
outside counsel.
He shares his experience and vision of the
future in this changing space and outlines A joint group including the American Bar
the benefits of using a single platform Association, the Association of Corporate
based on the international billing standards Counsel and PricewaterhouseCoopers was
BY charlie of the Legal Electronic Data Exchange formed to create a unified electronic billing
morgan Standard (LEDES). standard.
client relations
executive,
Introducing LSG: technology As part of this effort, it was decided that
LSG
solutions for the in-house lawyer electronic invoice time entries should be
We continue to learn from our clients and, task-based and aggregated by type of
indeed, they drive our development of new work performed, resulting in the possibility
e-billing, matter management and reporting that multiple time entries could result
solutions to mirror their processes and from the services performed in a single
meet their needs. Technology solutions do day on a matter. The project to create a
not stand still, they must evolve and keep coding system ran simultaneously with the
up with the changing needs of business and effort to create a standard billing format
we enjoy this challenge. There are always and resulted in the Uniform Task Based
lessons to be learned. Management System (UTBMS) code sets.
Our clients require a solution that not only The e-billing project group morphed into
tracks and reports on legal spend (eg law what is now known as the LEDES Oversight
firm fees, expenses and disbursements) Committee (LOC, of which LSG is a member)
but also ‘other related experts’ (eg a marine charged with maintaining the standards for
surveyor based in Singapore). General the exchange of billing and other information
counsel want to manage and report on both related to the delivery of legal services. It
their ‘traditional legal’ and ‘other experts’. is an international, voluntary, not-for-profit
organisation comprised of legal, insurance
The demand for effective compliance of industry and corporate representatives.
invoices against their service level agreement
and billing guidelines remains the same. The LOC is dedicated to using open standards
that cater to no one organisation or group of
We have also seen an increasing demand for organisations, in order to uniformly satisfy
more sophisticated reporting tools so that the complex needs of the legal industry
the general counsel or head of legal can based on five basic principles: keep it simple;
‘The vast majority of obtain high level and detailed reports (and make it unambiguous; diverge from existing
everything in between) on all matters. formats as little as absolutely necessary;
buyers of legal services only ask for information the law firm is
Typical questions are: are we getting value typically able to provide from their financial
use paper-based invoice from our legal suppliers? How can this be system; and meet the needs of corporations,
measured? How much is spent on trainees, law firms and legal industry software vendors
submission, review, paralegals, assistants, associates, junior to the maximum extent possible consistent
or senior partners? Does budget tracking with the first four criteria.
approval and payment supported by technology generate savings?
Can I receive reports automatically every So, with the foundations in place, what does
processing systems. month to fit in with my schedule? What this mean for the buyer of legal and related
is LSG’s philosophy on bill review and services?
However, the final step compliance?
Enhancing the performance
in accounts payable is The foundations of e-billing of organisations
and expert management The vast majority of buyers of legal services
typically electronic.’ At this point, I would like to ‘set the scene’ use paper-based invoice submission, review,
by outlining the foundations of e-billing approval and payment processing systems.
30 The In-House Lawyer October 2012 www.inhouselawyer.co.uk
IHL204 p30-31 E-Billing.indd 30 01/10/2012 11:25:14

2. e-billing technology LSG
However, the final step in accounts payable Bill Review: Business Process number of invoices, fees vs disbursements
is typically electronic. Outsourcing services comparison, line of business – budget vs
Unique to LSG is our bill review or guideline actual, timekeeper information, timekeeper
This leaves a large disconnect between compliance service – a business process cost split (chart), top 10/25/50/100
service providers (SPs) that are aiming outsourcing service. This is an optional matters by spend.
to generate fast payment and their service that gives a more granular review
clients’ ability to process invoices quickly of the invoice against your service level What are the barriers to moving
via internal business processes and agreement (SLA) or litigation billing guidelines. from paper to e-billing?
management authorisation. The general answer is ‘there aren’t any’.
The resolution desktop provides a It is now possible to set up a local, national
The LEDES billing formats bridge this gap method by which the bill submitter can and/or global e-billing solution for a client
as they enable law firms to submit clearly understand the reason for any and all its divisions anywhere internet access
electronic invoices that can be validated non-compliance potential reduction is available. This is due to the ubiquity of
by the technology, and approved by the and may then challenge it. LSG are web-based solutions and the cost of setting
in-house lawyer. Also, legal software non-confrontational with your outside up and maintaining these systems has
vendors have aligned their products to counsel or non-legal vendors and treat them dramatically decreased over the years.
enable firms to easily and cost-effectively equally as customers within the process.
produce the required LEDES formatted Our objective is to ensure your SLA/billing What does it cost and what
bills for electronic submission. guidelines are objectively complied with. will my staff say about it?
The cost is typically based on the users, or
Depending on the particular LEDES format Once any billing potential reduction issue the billing volumes involved, plus the local
used invoices can be submitted in any is resolved, the bill passes to the client or global nature of the implementation.
currency from anywhere in the world approver (eg in-house lawyer), for a qualitative Staff who are currently processing paper
and once approved, they are sent onto review and a press on the ‘approve’ button, invoices should be happy (I would hope!)
accounts payable or a third party for before the invoice is batched and queued for about removing paper from their in-trays.
payment processing. payment processing.
In the e-billing world, professional service
Budget Tracking Alternatively, this service can be used providers are responsible for loading their
Another important tool many clients on one-off, complex matters as a form invoices into the e-billing system online. The
value is the ability to budget. Tracking of audit or Legal Bill Review. We can take in-house lawyer (or their manager if required)
actual spend against the budget provides a recently closed claim or file and simply needs to approve and process these
clients with the ability to respond undertake a detailed study and analysis for payment, all of which can be dealt with
proactively as the budget erodes. The of the billing in order to determine how electronically from within the same e-billing
in-house lawyer will typically request a compliant or otherwise they would have application. Removal of paper from the billing
budget (eg life of case or phased level) been against your or market-based SLA’s process is also helping organisations to meet
and staff plan from the outside lead guidelines. their Corporate Social Responsibility policy
lawyer so that its erosion or exhaustion commitments because invoices are sent and
may be tracked as the bills are submitted Reporting approved electronically.
and approved. General counsel typically require high
level and detailed reports (and everything What should my organisation do?
Different ‘hard-stop’ rules can be in between) on their department and Organisations should be thinking not
incorporated: for example, an invoice external counsel. A ‘dashboard’ style tool is only how their processes can be improved
cannot be submitted unless there is preferred, in our experience. by using fast and efficient electronic
sufficient headroom in the budget. These solutions, but also how these solutions
rules can be switched on at any time Configurable reports containing tables, charts can be used to: i) ensure compliance against
through the life of the program enabling and graphs can be produced at the click of your SLAs; ii) drive decision making for panel
behavioural change to occur in managed a button and give detail on, for example, management; and iii) enhance internal and
stages. Budgeting supported by technology fees, expenses, budget erosion, in-house external performance.
generates control and savings. lawyer, guideline non-compliance and supplier
performance trending. The reports can be Consider the power of budgeting and a more
A phased approach is generally preferred ‘diced and sliced’ according to selected search ‘project management’ oriented approach
by our corporate clients rather than criteria agreed with the client. towards case/matter management. Optimal
the ‘big-bang’ approach. Budgets can settlements and resolutions are the real
be re-submitted at any time to reflect Typical reports requested by our clients goal here.
the changing circumstances of the include cost pattern for the last 12
matter or case. In doing so, there is months, total matters open, budget total, By Charlie Morgan,
transparency and an audit trail to submitted invoices total, paid invoices client relations executive, LSG.
better manage costs. total, total paid vs submitted invoices, total E-mail: ccm@lsg.com.
www.inhouselawyer.co.uk October 2012 The In-House Lawyer 31
IHL204 p30-31 E-Billing.indd 31 01/10/2012 11:25:14