Orion Prebill Survey Shows Law Firms Are Troubled by Inefficient, Paper-Heavy Prebilling Processes

Paper provides the illusion of security, but the reality is that paper documents are no more secure than electronic ones, in fact they can be less so. One of the risks of hard copy documents is that paper files can be lost, misplaced, damaged or destroyed. About half of the survey respondents said prebills were sometimes misplaced, requiring an additional copy to be produced. Also, after the accounting/billing department made the previously requested edits, 64% of respondents said that a second copy of the prebill was requested to review write-downs — yet another piece of paper that is vulnerable to being lost.

Thirty-nine percent of the firms who responded to the Prebill Survey showed that the monthly prebill process requires two or more weeks to be fully completed. At some firms, the review and annotation phase alone required 20 days to complete, which is nearly two-thirds of any month. In short, some firms are in prebilling phase almost the entire month, therefore impinging on their ability to focus on other initiatives at the firm.

Looking qualitatively into the survey's key issues, we spoke with some firms individually, interviewing several of their employees including lawyers, legal administrators and billing/accounting professionals. Two of the firms interviewed were Dowling Aaron Incorporated, based in Fresno, CA, and Aronberg Goldgehn Davis & Garmisa (Aronberg Goldgehn), based in Chicago, IL.

Dowling Aaron has five offices throughout California, with its billing process centralized at its Fresno headquarters. Orion interviewed Firm Administrator and Associate attorney Gregory N. Miskulin, Billing Specialist Jamie Carstens and Lindsay Powell in Accounts Receivable/Billing, who described the paper-based parts of the firm's prebilling process. The firm prints out all prebills and passes them to attorneys who handwrite changes and send them back to accounting/billing. Satellite offices receive the prebills via email, print them out, annotate them, scan them back in, and send them to the Fresno billing department for processing. If any clarification is needed, the process has to be repeated.

Miskulin said: “We know that paper-based prebilling is luddite. A lot of people are touching the prebill. There are a lot of edits and reruns to see the edits, and many handwritten entries where we can't read the writing. We see a lot of write-down reduction of billed time, especially if an associate has spent more time due to a learning curve. We have installed software to handle prebilling electronically and now are encouraging people to become trained and use it. We'll keep consistently working on transforming prebilling so it will improve — we are up against human nature since people are naturally resistant to change. A more efficient prebill process means faster billing, faster cash flow into the firm, so the benefits will certainly justify our efforts to streamline.”

Aronberg Goldgehn also has addressed many issues regarding time entry and billing procedures, and has instilled strict policies to ensure efficiency. The policy specifies exactly when time entries are due, including the statement: “The firm-wide billing process will not be stopped to accommodate the tardiness of any timekeeper.” There are penalties for those who do not comply with the policy.

Sheri Stone, Administrator at Aronberg Goldgehn, explains that many of the firm's attorneys have been there a long time and are still using paper — and even dictation. Many are still printing out prebills. Stone says that the prebilling or “WIP – Work-in-Progress” process takes about 10 business days at the firm. She notes: “If all people entered their hours in 'real-time,' we would be able to generate bills more quickly. Handwriting issues are happening, and we sometimes have to go to people and ask if they can recognize words or signatures. Last year, we implemented official policies regarding timeliness of time entries and that has definitely helped. Now, 85% of bills are out by the 10^th of each month, if not before.”

Having made great strides in time and billing efficiency, Stone says it's still tough to enforce use of technology tools. “We still have four to five attorneys doing paper timesheets and giving them to secretaries to enter in,” she says. “There is still dependence on paper so there's definitely more room to maneuver in the right direction. We need to make sure all employees are complying and all clients are paying. One of our allies in this process is technology providers who provide tools to automate these processes. Our challenge is to get people to use the software — it can be like herding cats and some will not cooperate. Younger attorneys are looking for collaboration tools to eliminate paper so this is likely to improve in the future.”

Rocky Road to Automation

Having been in legal technology for over 20 years, I have been a witness to the legal industry's drive to go paperless and embrace automation, but it has been a rocky road. There is no lack of technology tools to improve workflow, automate repetitive processes, and provide checks and balances to make sure nothing slips through the cracks. Software developers try to simulate familiar paper layouts electronically when designing their interfaces. However, the proliferation of available technology and training does not solve the “people problem” that still afflicts many firms. Firms may buy technology, but there is no guarantee that lawyers will become trained and use the software. They may still cling to their paper and pen habits, even when faced with penalties for doing so.

The Orion Prebill Survey showed that prebilling is one of the last bastions of inefficiency at law firms, ripe for innovation and overhaul. Firms such as Dowling Aaron and Aronberg Goldgehn take this problem seriously and are actively engaged in solving it. When other firms realize how much it's costing them to ignore this proverbial white elephant in the room, we hope that they also will bring greater automation and efficiency to their prebilling process. Time will tell.

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Kevin Harris is Project Management at Orion Law Management, Inc., a provider of financial and practice management software for law firms founded in 1985. Harris has been at Orion for over 20 years, actively working to bring efficiency and automation to lawyers and legal staff. Orion recently released Orion 5 including Orion ePrebill Manager, software which automates the prebilling process for the company's law firm clients. Contact Kevin at [email protected].