In the legal profession, billing is complex and strictly guided by ethics regulations. Legal department billing, in contrast to how a corporation as a whole handles billing, is managed by the individual case load, and the outside law firms retained to assist with representation. If you manage billing for a corporate legal or insurance claims department, or if you manage billing for a law firm directly, undoubtedly you spend countless hours on invoice review. Errors can be costly and can have lasting ramifications so there is no doubt that the effort is worthwhile. That said, the old method of hand-verification and invoice processing can be greatly reduced with legal billing management software.
Yet, with so many products on the market, and so many features available, it pays to do your research before you purchase a software program. Many legal billing software programs are designed for law firms specifically, so they don't take into account the complex billing issues that arise for corporate legal and insurance claims departments that must manage outside or internal legal teams.
For your organization, you need a tailored system built with tools unique to your issues. In particular, look for the features described below when comparing software solutions.
The more cases and firms you manage, the more invoices you're left to process—and the chances of errors increase significantly. When invoices get piled up awaiting review and approval, you risk non-payment and duplicate invoices being issued—adding to the probability of overpayment. Moreover, if you're still manually entering invoices, you may get human error while processing. Finally, manual invoice management means you are left with little to no retained data to verify compliance with the fees your firms and company have negotiated.
When you're looking for legal software solutions, look for a system that allows for electronic invoice uploading, and more particularly invoice auditing tools that capture critical violations and immediately alert the firms on upload so they can correct violations ‘before' the invoice is sent to you, thereby minimizing your review time. The system should flag tasks you want to carefully review to ensure efficiency in managing cases. The system should have automatic processing and payment routing, and should seamlessly interface with your internal case and accounting systems.
Don't forget about your other ancillary costs inherent in law firm billings, such as court reporting, records retrieval, and photocopying. Efficiently managing this process can save you a great amount of time and money. Look for a system that can ‘granularly' process these invoices so that you can report and analyze on all tasks associated with ‘other legal support vendors' and define best practices for the use of these outside vendors.
Law Firm and Timekeeper Management
Billing conflicts between law firms and clients cause unnecessary hassle and can break down valuable relationships. However, now you can use a tool to facilitate communication and handle timekeeper management. Look for legal billing management software that allow you to communicate in real-time with your counsel, pre-approve new timekeepers or rates, collaboratively view bills or items in question, and immediately address issues your teams have a dispute over.
Managing costs for your legal department is often a crucial way to maintain your department's funding. However, keeping costs under control can be tricky unless you carefully budget. The biggest complaint clients have is they do not feel their law firms give them effective budgets. With E-billing tools and legal project management tools, you'll have access to accurate and efficient functionalities that will assist with budgeting and allow you to project your expenses. When looking at systems, make sure a product offers:
The ability to break down data into categories so you can find efficiencies—particularly in the area of litigation.
Legal project management tools that allow you to outline the hours attorneys plan to spend on a case, broken out by phases, the cost they predict it will incur, and data to back up their prediction
Statistics show that a large percentage of clients who currently have electronic billing systems do not use the reporting tools effectively. Reporting on your data is invaluable in that it assists with determining where your largest costs are, how you can forecast similar cases, determine efficiencies across law firms, and define best practices for managing your cases to ensure optimal efficiencies and cost savings. Look for a vendor that will work directly with its clients by providing regular reports of their data to show how their costs compare across tasks, across matters, across firms. This vendor should assist clients with analyzing that data and determining better ways of managing specific tasks to ensure the best possible results, and ensure cost efficiencies. Law firms still manage cases like they did in the 20th century. It's time to bring them into the 21st century and ensure they use the latest technology and learn better ways to manage your cases to ensure you are getting the best results.
Data integration and analysis
Finally, when searching for legal management software, choose a system that allows you to use E-billing and matter management systems together, in one integrated tool. By combining the systems, you'll be able to review and approve invoices in the context of your total matter picture, set budgets for a matter and monitor the budget, and invoices processed against the budget, as the matter progresses, enforce compliance through your E-billing system, monitor and adjust cost allocations, control attorney expenses, and finally, anticipate upcoming workloads and expenses.
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