Association of Legal Administrators - Wild Apricot · Legal Department E-Billing: Work The Data Legal Industry Focus •Evolving Client-Law Firm Relationships •Alternative Fee Arrangements

Association of Legal Administrators

South Florida Chapter

Miami – Dade Presentation

E-Billing

Value, Efficiency and Reduced Legal Spend?

Presented by:

Frederick J. Esposito, Jr., CLM

Chief Financial Officer

Rivkin Radler, LLP

Hyatt Regency, Miami, FL

Wednesday, June 11, 2014

Let’s Start with a Quote

Let’s Chat About E-Billing

•How Many Firms Are Using E-Billing?

•How Many Firms Are Happy With E-Billing?

•How Many Firms Are NOT Happy With E-Billing?

•How Many Firms Are NOT Using E-Billing?

WHY NOT?

Evolution of E-Billing

•There was Paper – A Lot of Paper!

•For many Law Firms/Legal Departments

The Paper System Remains


Law Firms/Legal Departments

•Single Goal

• Translating Paper Bills on to the Screen

• “Aiming Low”

Today’s E-Billing Systems

•Matter Management

•Easier Budgeting

•Improved Bill Review & Data Culling

•Foundation for Improved Outside Spending Control

and Efficiency

•More “Business-Like” Practices

E- Billing

Law Firm Perspective

Why is Your Law Firm Doing E-Billing?

Because Clients Require It!

E-Billing

Legal Department/Client Perspective

Benefits

•Manage Cases More Efficiently

•Audit Law Firms

•Compare Partner/Lawyer Time

•Analyze Reporting and Benchmarking Data

•Paper-shuffling Declines

•Invoices Get Paid Faster! (That’s the Goal)

E-Billing

Law Firm/Legal Department/Client

Process

•Clients Require Firms to Send Their Invoices in

Electronic Form Directly to the Legal Department’s

Website or Through the Website of a Third-Party

E-Billing Vendor

•Electronic Billings Prepared in LEDES Format

Developed By PricewaterHouse Coopers in 1998

as an E-Billing Standard

•LEDES –Legal Electronic Data Exchange Standard


Legal Department Benefits

What is Driving the Rapid Adoption of E-Billing

in the Legal Profession?

• Savings

• Efficiency

• Low Cost

• Ease of Use

• Reporting

• Broad Acceptance by Law Firms

Greater Reliance on Metrics and Business Intelligence to

Manage Legal Departments

Legal Department

E-Billing: Cut Out The Paper

Recent Association of Corporate Counsel (ACC) and

Serengeti Survey of In-House Counsel found that roughly

25% of respondents were using some sort of e-billing system.

• Automation is a Daunting Prospect

• E-Billing Companies - Industry unto Themselves

• Many E-Billing Options!

• Options Vary Based on Needs of Law Firms

and Legal Departments

• Corporate Structure

• International/Domestic Reach

• Preferred Budgeting Processes

Legal Department

E-Billing: Cut Out The Paper

Selecting an E-Billing System

•Expensive Proposition

• New E-Billing Systems

• Replacing E-Billing Systems –Cost-effective?

•Take the Time to Thoroughly Research

•Find an E-Billing System that is the Right Fit

Legal Department

E-Billing: Accelerate Approvals

Billing Review Process

• Paper Billing Review

• Comparing (Inches Thick) Legal Bills to Previously

Set Budgets and Billing Guidelines of Varying

Complexity.

• E-Billing Review

• Many E-Billing Systems Track Compliance

with Billing Guidelines and Budgets

• Greater Oversight with Little Effort

Legal Department

E-Billing: Accelerate Approvals

Billing Review Process

E-Billing Advances

E-Billing Software: Serengeti Tracker

• Feature that Automatically Rejects Invoices that

Don’t Comply with Billing Guidelines

• No Longer Necessary to Draft a Memo to Dispute

an Item on a Bill

• Future Advances include Firms being able to Test

their Bill against Billing Guidelines BEFORE Electronic

Submission –Avoid the “back and forth.”

Legal Department

E-Billing: Work The Data

Legal Industry Focus

•Evolving Client-Law Firm Relationships

•Alternative Fee Arrangements (AFAs)

•“Death of the Billable Hour”

Legal Departments endorse a “partial paradigm shift”

•Focus remains on the legal work

•Billable Hour is the Byproduct, NOT the Focus

•E-Billing Systems –Critical tool in structuring AFAs

• Legal Department Perspective

• Where is the money going?

• Getting Biggest Bang for the Buck?

Legal Department

E-Billing: Work The Data

Legal Department Competitive Edge?

E-Billing provides information and a wealth of

statistical and cost data information to Legal

Departments which includes types of cases

and tracking of tasks

“Powerful Advantage Over

Law Firms?”

Legal Departments “share” information with Law

Firms to create “fair” relationships.

Law Firm E-Billing

What Do Client Legal Departments Want?

Legal Department –Policies and Procedures “Controlling Legal Costs for Greater Productivity”

“Managing Legal Matters for Greater Collaboration & Insight”

Requirements & Expectations of Law Firms

• Schedule of Approved Billing Rates

• Rate Increases MUST be Approved

• No Automatic Future Conflict-of Interest Waivers

• Identify ALL Attorneys/Timekeepers

• Acknowledgement/Compliance Sarbanes-Oxley

• Improve Communication/Optimize Relationships!

Law Firm E-Billing


Management

• Legal Contact

• Relationship Partner

• Lead Attorney

• Engagement Letter

• Scope of Representation

• Tasks to Be Performed

• Proposed Staffing

• Professional Level/Billing Rates

• Discount Structure

• Description of any AFAs

• Alternative to Staffing/Utilization of Outside

Vendors

Law Firm E-Billing


Staffing and Work Product

• Matter Staffing Approvals

• Timekeeper Billing of Clerical Functions

• Retention of Experts and Outside Counsel

• Educating Timekeepers/Basic Principles of Law

• Legal Research

Law Firm E-Billing


Document Retention/Data Privacy

Code of Professional Conduct

Diversity

Law Firm E-Billing


Conduct of Litigation

• General Policies

• Budgeting*

• Motion Practice

• Prior Review of Pleadings and Memoranda

• Affidavits and Declarations

• Discovery Practice

• Appeals

• Settlement Authority/Affirmative Litigation

See Exhibit A

Law Firm E-Billing


Billing Policies and Procedures

• Fees

• Negotiated Fee Arrangements (fixed fee, blended, hourly, full or partial contingency fee)

• Timekeeper Rates MUST be Approved!

• What Legal Departments Will/Won’t Pay!

Law Firm E-Billing



• Legal Departments will NOT pay for Timekeeper

billings in reference to:

• Organizing a file

• Copying and/or filing documents

• Duplicative time spent on research

• Reviewing/Analyzing Conflicts of Interest

• Preparing/Processing

• Third Party Invoices

• Billing and/or reports

See Exhibit D

Law Firm E-Billing



• Disbursements and Other Charges

• Legal Departments will NOT pay the following:

• Secretarial/Word Processing

• Facsimile Charges

• Photocopy Expense of more than $.___/page

• Unreasonable use of Messengers/Couriers

• Timekeeper Travel (Unless Prior Approved)

See Exhibit D

Law Firm E-Billing



• Invoice Submission

• Billing Thresholds/Frequency

• Matter Billing Only

• Disbursement Itemization with Detail (where appropriate)

• Research Charges (may require detailed explanation)

• Timely Billing

• Third Party Service Providers

• Approved Vendors and Providers

Law Firm E-Billing



• Auditing of Invoices

• Legal Department Matter ID Numbers

• Electronic Billing

• Uniform Task Based Management System (UTBMS) Codes

• Invoice Presentment

• Payment

Law Firm E-Billing


Electronic Billing Submission Protocols

• Uniform Task Based Management Codes (UTBMS)

• Series of codes used to classify the legal services

performed by a law firm in an electronic invoice

submission. (Exhibit C)

• Electronic Invoicing Implementation Requirements

• LEDES 1998B & 2000 Format Fields (Handout #1)

• Timekeeper Data Formats (Handout #2)

Law Firm E-Billing


LEDES 1998B Specification

Design Criteria:

• Keep It Simple Stupid (KISS)

• Make it unambiguous

• Diverge from existing formats as little as

possible

• Law Firms provide only information that is

needed

• Meet the needs of law firm software vendors

to meet the above criteria

Law Firm E-Billing


LEDES 2000 Specification

• Poorly designed

• Many inconsistencies and shortcomings

• Virtually impossible to deploy consistently from

corporate law department to corporate law

department, law firm to law firm, client to client.

What Did We Learn From This?...............

Law Firm E-Billing


“The More They Complicate the Plumbing,

the Easier it is to Stop Up the Drain!”

-Commander Montgomery Scott, USS Enterprise

Law Firm E-Billing


Uniform Task Based Management Codes (UTBMS)

UTBMS coding for time entries is broken into Three Time Entry

components:

Phase Codes describe the phase of the work performed.

Phase Codes begin with a letter to distinguish the code set

used and are always numbers in multiples of 100.

•L100 indicates the Assessment, Development and Administration

phase of handling a litigation matter; L200 indicates the Pre-Trial

Pleadings and Motions phase, etc. (See Exhibit C)

Law Firm E-Billing



Task Codes describe the task performed.

Phase of work performed is inferred from the first 2 characters

of the Task Code and are followed by numbers that are

(at least as originally set forth) multiples of 10.

•L110 indicates Fact Investigation/Development tasks

L120 indicates Analysis/Strategy tasks, etc. (See Exhibit C)

Both of the codes in this example associate to Assessment, Development and

Administration phase of the Litigation Code Set because both begin with L1.

Law Firm E-Billing



Activity Codes describe the actual work performed by the

timekeeper.

Activity codes always begin with A1 and there are eleven codes

in total. The Activity Codes are exactly the same across all of

the original ABA UTBMS sets.

•A101 is used to indicate that the timekeeper performed work

associated with Plan and Prepare for; A102 indicates that Research

was performed; A103 indicates Draft/Revise; etc. (See Exhibit C)

In e-billing, Law departments decide whether Activity coding is required at

all on time entries.

Law Firm E-Billing



Expense Codes were created to classify the expenses submitted

by law firms on their invoices.

Expense codes begin with an E and are numbered consecutively

from 101 to 124. The Expense Codes are exactly the same across

all of the original ABA UTBMS sets.

•E101 is used for Copying; E102 for Outside Printing; E103 for

Word Processing; E104 for Facsimile; etc.

It is not unusual for law departments to mandate maximum charges per expense

item (like $.07 per page for internal copies) or to exclude usage of certain expense

codes (like disallowing use of E124 Other)

Law Firm E-Billing


• Electronic Billing Submission Protocols

• LEDES 2000 Format Fields (Handout)

• LEDES 1998 Format Fields (Handout)

• Timekeeper Data Formats (Handout)

Law Firm E-Billing


Sample Legal Department Exhibits

Exhibit A: Budget Format

Exhibit B: Billing Requirements

Exhibit C: Uniform Task Based Management System

Exhibit D: Non-Compensable Items/Disbursement

Limitations & Restrictions

Law Firm E-Billing


What Do Client Legal Departments NEED?

What Do Client Legal Departments WANT?

Law Firm E-Billing

Electronic Billing Software

Most Popular

Law Firm Time and Billing Systems

Most E-Billing Programs Built-In

Law Firm E-Billing

Electronic Billing Software

Sampling of Vendors Supporting LEDES

(Southeast)

• Acuity Management Solutions

• Aderant

• Bridgeway Software, Inc.

• Datacert, Inc.

• Mitratech Holdings, Inc.

Let’s End with a Quote

Questions

Thank you!

Contact Information

Frederick J. Esposito, Jr., CLM Chief Financial Officer Rivkin Radler, LLP 926 RXR Plaza, 10th Floor Uniondale, NY 11556 Email Address: [email protected] Phone Number: 516-357-3000 www.rivkinradler.com LinkedIn: www.linkedin.com/in/fjesposito Twitter: Lawmgtguru

Documents

Association of Legal Administrators - Wild Apricot · Legal Department E-Billing: Work The Data Legal Industry Focus •Evolving Client-Law Firm Relationships •Alternative Fee Arrangements