Helping a Client Select an e-Billing System

Law firms have a legitimate interest in encouraging clients to select and implement e-billing software that is cost-neutral or, preferably, advantageous to the firm. While many factors contribute to a mutually profitable e-billing setup, your research and potential advice to the client should cover at least the following basics:

• Charges. Charges to law firms vary widely, from no charge (Serengeti Law), to annual fees/client (DataCert), to a percentage of the fees billed (Tymetrix). [Editor's note: The aforementioned June 2003 article analyzes pricing methods.]

• Data Standards. The Legal Electronic Data Exchange Standard (LEDES) was adopted by a consortium of law firms, corporate clients, and vendors in 1998. Essentially, it permits law firms to generate a uniform set of billing data no matter what their time and billing system.

To output LEDES data, law firms generally purchase a module from a software vendor. The problem is that many e-billing vendors require modifications to the standard LEDES output, negating the purpose of having a standard. It is therefore important to ask any vendor whether they require LEDES and, if they do, whether they require any modifications to the standard output. Obviously, the more modifications necessary, the more problems for law firms coming onto the system. [Editor's note: The September 2003 edition of this newsletter details the new, XML-based LEDES 2000 standard, which greatly expands the flexibility of LEDES.]

Most clients prefer LEDES invoices because they come through in a single format that can be analyzed by their e-billing system. However, clients who also work with smaller or foreign law firms may need a system that can also accept non-LEDES formats (Word, Acrobat, etc.), so that they can get all their outside firms onto a single system.

• Billing Codes. Some e-billing systems require Uniform Task-Based Management System (UTBMS) task and activity codes for every time entry in the bill. This can cause problems for lawyers not used to entering codes when recording their time ' as well as for billing clerks, who generally have a hard time coding time entries recorded by lawyers.

The UTBMS codes were released years ago by the American Bar Association and the American Corporate Counsel Association with much fanfare about how they would permit clients to compare the costs of performing legal work across multiple firms. In practice, many law firms and clients have found them difficult to use and of questionable benefit.