Navigating the tangled web of legal billing has always been a bit of a nightmare, but the widespread adoption of e-billing systems and the development of standardized formats for exchanging electronic billing information such as LEDES have certainly made things easier.
The “Billable Hour”
E-billing confers many advantages when used to deal with bills from law firms because of the way they handle billable hours. Law firms often have quotas requiring that their attorneys bill anywhere between 1700 and 2300 hours per annum. In addition, the hours are billed in 6-minute increments at most law firms. These practices can create a temptation on the part of the attorney to pad out their billed hours to keep their jobs. A few minutes here and there may not sound like much, but when you consider the scope of many cases and the average hourly rate of an attorney, this can add up very quickly, potentially costing you thousands.
Benefits Of E-billing for Legal Clients
The main benefits of e-billing when dealing with legal clients are efficiency and transparency. E-billing allows you to automate many of the administrative processes involved with traditional billing. Transparency is very important in legal billing because of the practice of billable hours we discussed above. Traditionally with paper bills, there would need to be back and forth communication on what charges were disallowed and why. With e-billing software, certain rules can be entered into the system and when the client submits a bill, any charges that are suspect can immediately be flagged.
In summation: e-billing keeps legal clients accountable, saves you money, and increases transparency in the billing process. A properly implemented e-billing system is a boon to anyone who works with legal departments often.