Progress in Standardizing Law Firm Invoices

A standard set of task, activity, and expense codes specifically for the legal industry, the Uniform Task Based Management System (UTBMS) was created in 1994'95 by a joint effort of the ABA Litigation Section, the American Corporate Counsel Association (ACCA) and a sponsoring group of major corporate law departments and law firms. Price Waterhouse LLP (then so named) coordinated and supported the project.

The LEDES 1998B Standard

In parallel with the UTBMS effort, Price Waterhouse also convened a group of time-billing and case management software vendors to propose a standard electronic billing format for the legal industry. Eventually this effort led to what is now called the LEDES format.

As explained on its organizational Web site (www.ledes.org), the purpose of LEDES is as follows: 'The LEDESTM (Legal Electronic Data Exchange Standard) file format is intended to serve as a standard file format to be used by the legal industry for the electronic exchange of information. Initially, the focus is on billing information. LEDES was developed originally by PricewaterhouseCoopers who have placed it in the charge of the LOC (LEDES Oversight Committee), a voluntary body consisting of industry representatives. It is the goal of the LOC that LEDES be an open standard which caters to no one organization or group of organizations and that LEDES be the single standard used for all billing within the industry.'

After experimenting with a version called LEDES 1998A, the LOC officially released the LEDES 1998B standard, which has since been used in several software products. (See the aforementioned Web site for a list of vendors and products claiming to support at least one LEDES standard.)

The LEDES 2000 Standard

While the LEDES 1998B format was rationally devised, it reflected many compromises, and it was clear from the start that more expressive and flexible versions of the standard would eventually be needed.

The LOC has since released a new standard called LEDES 2000. Unlike the fixed sequence of ASCII fields that make up LEDES 1998B invoice records, a LEDES 2000 invoice is made up flexible 'segments' coded in the Extensible Markup Language (XML).

The LEDES 2000 standard does not modify the LEDES 1998B standard, which can continue to be used. In fact, since every current and potential customer can generate the simple albeit rigid ASCII text-field records used by LEDES 1998B, most vendors are not rushing to employ LEDES 2000.

DataCert, however, has already committed its ShareDoc/LEGAL product to LEDES 2000. Most law firms submitting invoices to ShareDoc/LEGAL actually still employ the LEDES 1998B format, but ShareDoc/LEGAL converts the invoices to LEDES 2000 within the client's system.

The legal and accounting professions have made significant strides in defining standard invoice data codes as well as formats for law firm electronic invoices. The standards bandwagon has been in no danger, however, of tipping over from too many community members hurriedly jumping on it.

Products with an existing proprietary format generally can be expected to continue accepting that format even after they are enhanced to accept a new standardized format. For example, TyMetrix retains the ability to process its proprietary DTF format, which many time and billing packages can generate.

The UTBMS Standard

A standard set of task, activity, and expense codes specifically for the legal industry, the Uniform Task Based Management System (UTBMS) was created in 1994'95 by a joint effort of the ABA Litigation Section, the American Corporate Counsel Association (ACCA) and a sponsoring group of major corporate law departments and law firms. Price Waterhouse LLP (then so named) coordinated and supported the project.

The LEDES 1998B Standard

In parallel with the UTBMS effort, Price Waterhouse also convened a group of time-billing and case management software vendors to propose a standard electronic billing format for the legal industry. Eventually this effort led to what is now called the LEDES format.

As explained on its organizational Web site (www.ledes.org), the purpose of LEDES is as follows: 'The LEDESTM (Legal Electronic Data Exchange Standard) file format is intended to serve as a standard file format to be used by the legal industry for the electronic exchange of information. Initially, the focus is on billing information. LEDES was developed originally by PricewaterhouseCoopers who have placed it in the charge of the LOC (LEDES Oversight Committee), a voluntary body consisting of industry representatives. It is the goal of the LOC that LEDES be an open standard which caters to no one organization or group of organizations and that LEDES be the single standard used for all billing within the industry.'

After experimenting with a version called LEDES 1998A, the LOC officially released the LEDES 1998B standard, which has since been used in several software products. (See the aforementioned Web site for a list of vendors and products claiming to support at least one LEDES standard.)

The LEDES 2000 Standard

While the LEDES 1998B format was rationally devised, it reflected many compromises, and it was clear from the start that more expressive and flexible versions of the standard would eventually be needed.

The LOC has since released a new standard called LEDES 2000. Unlike the fixed sequence of ASCII fields that make up LEDES 1998B invoice records, a LEDES 2000 invoice is made up flexible 'segments' coded in the Extensible Markup Language (XML).

The LEDES 2000 standard does not modify the LEDES 1998B standard, which can continue to be used. In fact, since every current and potential customer can generate the simple albeit rigid ASCII text-field records used by LEDES 1998B, most vendors are not rushing to employ LEDES 2000.

DataCert, however, has already committed its ShareDoc/LEGAL product to LEDES 2000. Most law firms submitting invoices to ShareDoc/LEGAL actually still employ the LEDES 1998B format, but ShareDoc/LEGAL converts the invoices to LEDES 2000 within the client's system.