Detailed Billing

Older attorneys remember the days when clients would get a bill with just a dollar amount and two simple words: 'services rendered.'

'They don't put up with anything close to that anymore,' said Christopher Hockett, a veteran litigator at Bingham McCutchen LLP in San Francisco.

Today's bills are as thick as case files, and at least as detailed. Concerned over what lawyers are doing with their time and who's working on a matter ' whether to track diversity or to keep expensive but inexperienced first-year associates off the case ' clients demand exhaustive accounting from their outside counsel.

'Naturally we want to see a lot of detail,' said James Hall, in-house counsel at San Jose, CA, tech company Quantum. 'It's important for us to know we're getting the best bang for our buck.'

Although lawyers in private grumble and knowingly smile about the hassle, most acknowledge that clients are justified in demanding specifics ' consumers expect to know what they're paying for.

Billing for Billing ' Or Budgeting

That doesn't mean it's easy, though. Larger clients have adopted any of several brands of billing software that provide a million little fields to fill in, while others stick with old-fashioned paper and ink. There are those clients that use the Uniform Task-Based Management System ('UTBMS') of billing codes, which assigns each legal task a seemingly random number ' L330 equals a deposition, for example. Some have dropped the codes altogether.

One result: Lawyers end up billing for time spent on billing. Peripheral administrative staff often can't be expected to fill out forms that demand an intimate knowledge of exactly which lawyer did exactly what work.

'That's not easily delegable to someone down the line,' said Bingham's Hockett. 'It needs to be done by someone with a bit of experience and an understanding of the case.'

That means that even associates are sometimes too far removed, so clients' cost-saving demands for detail often cost them at partner rates. While the idea of a partner sitting around after the fact doing paperwork doesn't sit well with every client, partners are expected to spend time up front on budgeting ' which is pretty much billing in advance.

Clients have different policies on billing time for budgeting, Hockett said. 'Most of the time it's 'no,' but clients are asking for a lot of monthly reports and expense projections, and most of them recognize that's time that you have to spend.'

The billing code for budgeting: L150.

An Eye on Ethnicity

For in-house counsel, bills now serve as proof that the law firm is using the lawyers they want working on the case.

Rob Thomas, vice president of strategic development at e-billing company Serengeti, said that many of his customers want their e-bills to be monitored for any change in staffing. It helps in-house counsel control whom and how much they're paying, he said.

That means outside firms have to keep their clients informed as changes arise.

'The key to billing with any client is communication,' said Gordon Atkinson, a Cooley Godward Kronish LLP litigation partner in San Francisco. 'Clients do not like surprises.'

Companies that care about diversity are also starting to use bills to make sure that the teams working on their matters are from a mix of backgrounds, and in some cases that those lawyers are getting meaningful work.

Pitney Bowes Inc.'s legal department uses e-billing data to ensure that firms adhere to its diversity guidelines, via a check off for race and ethnicity on its staffing form, Corporate Counsel reported in February.

'It's not enough just to recruit diverse attorneys,' said Beverly Wolfe, manager of legal operations at the Stamford, CN, mail services company. 'We want them to use diverse teams on our matters.'

Bingham's Hockett applauds the demands for diversity, but said his firm is still figuring out how to balance clients' needs and lawyers' privacy. 'A person's ethnicity is subject to some sensitivity, so it's not something that we treat lightly,' he said.

So in addition to keeping track of who's on a legal team, firms have to be careful who's billing for an L260 (class action certification and notice) or a B150 (meetings and communications with creditors in a bankruptcy case), and who is spending time on A106 (client communication) and A102 (research).

Serengeti's Thomas said fewer legal departments are using the coded billing these days, at least when it comes to describing legal tasks. It takes partners away from actually practicing law, and it forces in-house counsel to kill whole afternoons poring over lengthy bills for line items to veto.

'You go through all this work and what happens at the end of the day?' asked Thomas. 'The answer is, very little.'

Older attorneys remember the days when clients would get a bill with just a dollar amount and two simple words: 'services rendered.'

'They don't put up with anything close to that anymore,' said Christopher Hockett, a veteran litigator at Bingham McCutchen LLP in San Francisco.

Today's bills are as thick as case files, and at least as detailed. Concerned over what lawyers are doing with their time and who's working on a matter ' whether to track diversity or to keep expensive but inexperienced first-year associates off the case ' clients demand exhaustive accounting from their outside counsel.

'Naturally we want to see a lot of detail,' said James Hall, in-house counsel at San Jose, CA, tech company Quantum. 'It's important for us to know we're getting the best bang for our buck.'

Although lawyers in private grumble and knowingly smile about the hassle, most acknowledge that clients are justified in demanding specifics ' consumers expect to know what they're paying for.

Billing for Billing ' Or Budgeting

That doesn't mean it's easy, though. Larger clients have adopted any of several brands of billing software that provide a million little fields to fill in, while others stick with old-fashioned paper and ink. There are those clients that use the Uniform Task-Based Management System ('UTBMS') of billing codes, which assigns each legal task a seemingly random number ' L330 equals a deposition, for example. Some have dropped the codes altogether.

One result: Lawyers end up billing for time spent on billing. Peripheral administrative staff often can't be expected to fill out forms that demand an intimate knowledge of exactly which lawyer did exactly what work.

'That's not easily delegable to someone down the line,' said Bingham's Hockett. 'It needs to be done by someone with a bit of experience and an understanding of the case.'

That means that even associates are sometimes too far removed, so clients' cost-saving demands for detail often cost them at partner rates. While the idea of a partner sitting around after the fact doing paperwork doesn't sit well with every client, partners are expected to spend time up front on budgeting ' which is pretty much billing in advance.

Clients have different policies on billing time for budgeting, Hockett said. 'Most of the time it's 'no,' but clients are asking for a lot of monthly reports and expense projections, and most of them recognize that's time that you have to spend.'

The billing code for budgeting: L150.

An Eye on Ethnicity

For in-house counsel, bills now serve as proof that the law firm is using the lawyers they want working on the case.

Rob Thomas, vice president of strategic development at e-billing company Serengeti, said that many of his customers want their e-bills to be monitored for any change in staffing. It helps in-house counsel control whom and how much they're paying, he said.

That means outside firms have to keep their clients informed as changes arise.

'The key to billing with any client is communication,' said Gordon Atkinson, a Cooley Godward Kronish LLP litigation partner in San Francisco. 'Clients do not like surprises.'

Companies that care about diversity are also starting to use bills to make sure that the teams working on their matters are from a mix of backgrounds, and in some cases that those lawyers are getting meaningful work.

Pitney Bowes Inc.'s legal department uses e-billing data to ensure that firms adhere to its diversity guidelines, via a check off for race and ethnicity on its staffing form, Corporate Counsel reported in February.

'It's not enough just to recruit diverse attorneys,' said Beverly Wolfe, manager of legal operations at the Stamford, CN, mail services company. 'We want them to use diverse teams on our matters.'

Bingham's Hockett applauds the demands for diversity, but said his firm is still figuring out how to balance clients' needs and lawyers' privacy. 'A person's ethnicity is subject to some sensitivity, so it's not something that we treat lightly,' he said.

So in addition to keeping track of who's on a legal team, firms have to be careful who's billing for an L260 (class action certification and notice) or a B150 (meetings and communications with creditors in a bankruptcy case), and who is spending time on A106 (client communication) and A102 (research).

Serengeti's Thomas said fewer legal departments are using the coded billing these days, at least when it comes to describing legal tasks. It takes partners away from actually practicing law, and it forces in-house counsel to kill whole afternoons poring over lengthy bills for line items to veto.

'You go through all this work and what happens at the end of the day?' asked Thomas. 'The answer is, very little.'