Association of Legal Administrators - Wild Apricot · Legal Department E-Billing: Work The Data...
Transcript of Association of Legal Administrators - Wild Apricot · Legal Department E-Billing: Work The Data...
Association of Legal Administrators
South Florida Chapter
Miami – Dade Presentation
E-Billing
Value, Efficiency and Reduced Legal Spend?
Presented by:
Frederick J. Esposito, Jr., CLM
Chief Financial Officer
Rivkin Radler, LLP
Hyatt Regency, Miami, FL
Wednesday, June 11, 2014
Let’s Start with a Quote
Let’s Chat About E-Billing
•How Many Firms Are Using E-Billing?
•How Many Firms Are Happy With E-Billing?
•How Many Firms Are NOT Happy With E-Billing?
•How Many Firms Are NOT Using E-Billing?
WHY NOT?
Evolution of E-Billing
•There was Paper – A Lot of Paper!
•For many Law Firms/Legal Departments
The Paper System Remains
Evolution of E-Billing
Law Firms/Legal Departments
•Single Goal
• Translating Paper Bills on to the Screen
• “Aiming Low”
Today’s E-Billing Systems
•Matter Management
•Easier Budgeting
•Improved Bill Review & Data Culling
•Foundation for Improved Outside Spending Control
and Efficiency
•More “Business-Like” Practices
E- Billing
Law Firm Perspective
Why is Your Law Firm Doing E-Billing?
Because Clients Require It!
E-Billing
Legal Department/Client Perspective
Benefits
•Manage Cases More Efficiently
•Audit Law Firms
•Compare Partner/Lawyer Time
•Analyze Reporting and Benchmarking Data
•Paper-shuffling Declines
•Invoices Get Paid Faster! (That’s the Goal)
E-Billing
Law Firm/Legal Department/Client
Process
•Clients Require Firms to Send Their Invoices in
Electronic Form Directly to the Legal Department’s
Website or Through the Website of a Third-Party
E-Billing Vendor
•Electronic Billings Prepared in LEDES Format
Developed By PricewaterHouse Coopers in 1998
as an E-Billing Standard
•LEDES –Legal Electronic Data Exchange Standard
Evolution of E-Billing
Legal Department Benefits
What is Driving the Rapid Adoption of E-Billing
in the Legal Profession?
• Savings
• Efficiency
• Low Cost
• Ease of Use
• Reporting
• Broad Acceptance by Law Firms
Greater Reliance on Metrics and Business Intelligence to
Manage Legal Departments
Legal Department
E-Billing: Cut Out The Paper
Recent Association of Corporate Counsel (ACC) and
Serengeti Survey of In-House Counsel found that roughly
25% of respondents were using some sort of e-billing system.
• Automation is a Daunting Prospect
• E-Billing Companies - Industry unto Themselves
• Many E-Billing Options!
• Options Vary Based on Needs of Law Firms
and Legal Departments
• Corporate Structure
• International/Domestic Reach
• Preferred Budgeting Processes
Legal Department
E-Billing: Cut Out The Paper
Selecting an E-Billing System
•Expensive Proposition
• New E-Billing Systems
• Replacing E-Billing Systems –Cost-effective?
•Take the Time to Thoroughly Research
•Find an E-Billing System that is the Right Fit
Legal Department
E-Billing: Accelerate Approvals
Billing Review Process
• Paper Billing Review
• Comparing (Inches Thick) Legal Bills to Previously
Set Budgets and Billing Guidelines of Varying
Complexity.
• E-Billing Review
• Many E-Billing Systems Track Compliance
with Billing Guidelines and Budgets
• Greater Oversight with Little Effort
Legal Department
E-Billing: Accelerate Approvals
Billing Review Process
E-Billing Advances
E-Billing Software: Serengeti Tracker
• Feature that Automatically Rejects Invoices that
Don’t Comply with Billing Guidelines
• No Longer Necessary to Draft a Memo to Dispute
an Item on a Bill
• Future Advances include Firms being able to Test
their Bill against Billing Guidelines BEFORE Electronic
Submission –Avoid the “back and forth.”
Legal Department
E-Billing: Work The Data
Legal Industry Focus
•Evolving Client-Law Firm Relationships
•Alternative Fee Arrangements (AFAs)
•“Death of the Billable Hour”
Legal Departments endorse a “partial paradigm shift”
•Focus remains on the legal work
•Billable Hour is the Byproduct, NOT the Focus
•E-Billing Systems –Critical tool in structuring AFAs
• Legal Department Perspective
• Where is the money going?
• Getting Biggest Bang for the Buck?
Legal Department
E-Billing: Work The Data
Legal Department Competitive Edge?
E-Billing provides information and a wealth of
statistical and cost data information to Legal
Departments which includes types of cases
and tracking of tasks
“Powerful Advantage Over
Law Firms?”
Legal Departments “share” information with Law
Firms to create “fair” relationships.
Law Firm E-Billing
What Do Client Legal Departments Want?
Legal Department –Policies and Procedures “Controlling Legal Costs for Greater Productivity”
“Managing Legal Matters for Greater Collaboration & Insight”
Requirements & Expectations of Law Firms
• Schedule of Approved Billing Rates
• Rate Increases MUST be Approved
• No Automatic Future Conflict-of Interest Waivers
• Identify ALL Attorneys/Timekeepers
• Acknowledgement/Compliance Sarbanes-Oxley
• Improve Communication/Optimize Relationships!
Law Firm E-Billing
What Do Client Legal Departments Want?
Management
• Legal Contact
• Relationship Partner
• Lead Attorney
• Engagement Letter
• Scope of Representation
• Tasks to Be Performed
• Proposed Staffing
• Professional Level/Billing Rates
• Discount Structure
• Description of any AFAs
• Alternative to Staffing/Utilization of Outside
Vendors
Law Firm E-Billing
What Do Client Legal Departments Want?
Staffing and Work Product
• Matter Staffing Approvals
• Timekeeper Billing of Clerical Functions
• Retention of Experts and Outside Counsel
• Educating Timekeepers/Basic Principles of Law
• Legal Research
Law Firm E-Billing
What Do Client Legal Departments Want?
Document Retention/Data Privacy
Code of Professional Conduct
Diversity
Law Firm E-Billing
What Do Client Legal Departments Want?
Conduct of Litigation
• General Policies
• Budgeting*
• Motion Practice
• Prior Review of Pleadings and Memoranda
• Affidavits and Declarations
• Discovery Practice
• Appeals
• Settlement Authority/Affirmative Litigation
See Exhibit A
Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Fees
• Negotiated Fee Arrangements (fixed fee, blended, hourly, full or partial contingency fee)
• Timekeeper Rates MUST be Approved!
• What Legal Departments Will/Won’t Pay!
Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Legal Departments will NOT pay for Timekeeper
billings in reference to:
• Organizing a file
• Copying and/or filing documents
• Duplicative time spent on research
• Reviewing/Analyzing Conflicts of Interest
• Preparing/Processing
• Third Party Invoices
• Billing and/or reports
See Exhibit D
Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Disbursements and Other Charges
• Legal Departments will NOT pay the following:
• Secretarial/Word Processing
• Facsimile Charges
• Photocopy Expense of more than $.___/page
• Unreasonable use of Messengers/Couriers
• Timekeeper Travel (Unless Prior Approved)
See Exhibit D
Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Invoice Submission
• Billing Thresholds/Frequency
• Matter Billing Only
• Disbursement Itemization with Detail (where appropriate)
• Research Charges (may require detailed explanation)
• Timely Billing
• Third Party Service Providers
• Approved Vendors and Providers
Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Auditing of Invoices
• Legal Department Matter ID Numbers
• Electronic Billing
• Uniform Task Based Management System (UTBMS) Codes
• Invoice Presentment
• Payment
Law Firm E-Billing
What Do Client Legal Departments Want?
Electronic Billing Submission Protocols
• Uniform Task Based Management Codes (UTBMS)
• Series of codes used to classify the legal services
performed by a law firm in an electronic invoice
submission. (Exhibit C)
• Electronic Invoicing Implementation Requirements
• LEDES 1998B & 2000 Format Fields (Handout #1)
• Timekeeper Data Formats (Handout #2)
Law Firm E-Billing
What Do Client Legal Departments Want?
LEDES 1998B Specification
Design Criteria:
• Keep It Simple Stupid (KISS)
• Make it unambiguous
• Diverge from existing formats as little as
possible
• Law Firms provide only information that is
needed
• Meet the needs of law firm software vendors
to meet the above criteria
Law Firm E-Billing
What Do Client Legal Departments Want?
LEDES 2000 Specification
• Poorly designed
• Many inconsistencies and shortcomings
• Virtually impossible to deploy consistently from
corporate law department to corporate law
department, law firm to law firm, client to client.
What Did We Learn From This?...............
Law Firm E-Billing
What Do Client Legal Departments Want?
“The More They Complicate the Plumbing,
the Easier it is to Stop Up the Drain!”
-Commander Montgomery Scott, USS Enterprise
Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
UTBMS coding for time entries is broken into Three Time Entry
components:
Phase Codes describe the phase of the work performed.
Phase Codes begin with a letter to distinguish the code set
used and are always numbers in multiples of 100.
•L100 indicates the Assessment, Development and Administration
phase of handling a litigation matter; L200 indicates the Pre-Trial
Pleadings and Motions phase, etc. (See Exhibit C)
Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
Task Codes describe the task performed.
Phase of work performed is inferred from the first 2 characters
of the Task Code and are followed by numbers that are
(at least as originally set forth) multiples of 10.
•L110 indicates Fact Investigation/Development tasks
L120 indicates Analysis/Strategy tasks, etc. (See Exhibit C)
Both of the codes in this example associate to Assessment, Development and
Administration phase of the Litigation Code Set because both begin with L1.
Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
Activity Codes describe the actual work performed by the
timekeeper.
Activity codes always begin with A1 and there are eleven codes
in total. The Activity Codes are exactly the same across all of
the original ABA UTBMS sets.
•A101 is used to indicate that the timekeeper performed work
associated with Plan and Prepare for; A102 indicates that Research
was performed; A103 indicates Draft/Revise; etc. (See Exhibit C)
In e-billing, Law departments decide whether Activity coding is required at
all on time entries.
Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
Expense Codes were created to classify the expenses submitted
by law firms on their invoices.
Expense codes begin with an E and are numbered consecutively
from 101 to 124. The Expense Codes are exactly the same across
all of the original ABA UTBMS sets.
•E101 is used for Copying; E102 for Outside Printing; E103 for
Word Processing; E104 for Facsimile; etc.
It is not unusual for law departments to mandate maximum charges per expense
item (like $.07 per page for internal copies) or to exclude usage of certain expense
codes (like disallowing use of E124 Other)
Law Firm E-Billing
What Do Client Legal Departments Want?
• Electronic Billing Submission Protocols
• LEDES 2000 Format Fields (Handout)
• LEDES 1998 Format Fields (Handout)
• Timekeeper Data Formats (Handout)
Law Firm E-Billing
What Do Client Legal Departments Want?
Sample Legal Department Exhibits
Exhibit A: Budget Format
Exhibit B: Billing Requirements
Exhibit C: Uniform Task Based Management System
Exhibit D: Non-Compensable Items/Disbursement
Limitations & Restrictions
Law Firm E-Billing
What Do Client Legal Departments Want?
What Do Client Legal Departments NEED?
What Do Client Legal Departments WANT?
Law Firm E-Billing
Electronic Billing Software
Most Popular
Law Firm Time and Billing Systems
Most E-Billing Programs Built-In
Law Firm E-Billing
Electronic Billing Software
Sampling of Vendors Supporting LEDES
(Southeast)
• Acuity Management Solutions
• Aderant
• Bridgeway Software, Inc.
• Datacert, Inc.
• Mitratech Holdings, Inc.
Let’s End with a Quote
Questions
Thank you!
Contact Information
Frederick J. Esposito, Jr., CLM Chief Financial Officer Rivkin Radler, LLP 926 RXR Plaza, 10th Floor Uniondale, NY 11556 Email Address: [email protected] Phone Number: 516-357-3000 www.rivkinradler.com LinkedIn: www.linkedin.com/in/fjesposito Twitter: Lawmgtguru