The Evolution of E-Billing

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In the beginning, there was paper a lot of paper, in the form of inches-thick law firm bills. For many law departments, the paper system remains. Others have turned to electronic solutions to their billing needs.

To avoid having to weigh such options, spend some time researching what will be best for your department, which might mean working with a consultant. "Some law departments have made system selections and not been happy with the results from them, whereas if they had had more guidance, the results may have been different," Bennitt says.

Before and After

2. Accelerate Approvals

"A paper bill from a law firm can be literally inches thick," says Brad Blickstein, principal at the Blickstein Group. When faced with phone book-like invoices, reviewing them generally comes to mean initialing pages after a quick glance, a matter of asking yourself if you felt you got your money's worth, says Dan Ruderman, an account executive for LexisNexis, which offers an e-billing/matter management system. When you're dealing with paper, comparing invoices to previously set budgets and billing guidelines of varying complexity can become an ordeal.

After: The IP team now has a matter management system that integrates billing to make budgeting automatic. When a Semitool lawyer sets up a matter, outside lawyers get an e-mail notification that they need to submit a budget for the matter, which Semitool can approve or adjust. If a law firm invoices for an amount above the set budget, the system will round it down. "It's amazing how outside counsel have become very responsive to my desire for budgets and status reports," Bohn says. "I used to get invoices without ever having received a budget, but now I'm committed--they already did the work without me asking."

Evidence of the system's success is the fact that Bohn doesn't even have to think about it. "It's become intuitive," he says. "It's really three things you're doing [as an in-house lawyer]: legal work, finance and the link between the two. Now those just blend together for me. ... It gives me peace of mind that I'm doing my best to manage the money."

"We endorse a partial paradigm shift, [in which] the focus is on the work, and the billable hour is a byproduct of that but not the focus," says Eyal Iffergan, CEO of Hyperion Global Partners, a legal consultancy. "What ties back to the existing conduit of e-billing is the ability to translate that context in the information you share, allowing law departments to focus on the work their firms are doing and understand what it costs to accomplish that work."

For instance, e-billing systems can be a crucial tool in structuring AFAs with law firms to fully understand where your money is going and ensure you're getting the biggest bang for your buck.

"We pressed for a 'root cause' when additional codes or fields were requested," Townsan says. "Data for the sake of data can create inefficiencies. We wanted to avoid lengthy lists of codes. Additional classifications had to be warranted based on volume and business need." The group determined by consensus, for example, that UTC's asbestos docket incorporated specific enough data to warrant its own subtype, whereas M&A matters could be categorized within one type with further definition accommodated within a single data field.

After: "Understanding our reporting needs up front enabled us to design the system to ensure the data was properly categorized to 'slice and dice' it. We can now use our matter billing data to zero in on opportunities for savings; for example, targeting AFAs or identifying areas for counsel consolidation through competitive bidding," Townsan says.

Associate Editor

Melissa Maleske

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