Legal EBilling Software For Corporate Law Departments

Legal ebilling software is a necessary application for law departments, especially in this era of technology advancements that streamline, clarify and simplify workflow and bill review software.

Other benefits of e-billing systems include increased accuracy in the invoice against agreed-upon budget, billing guidelines and compliance from outside counsel, and time savings. Lawyers can focus more on the practice of law while legal operations professionals can review invoices for accuracy.

Smart legal e billing software includes AI-driven tools that automatically flag errors and correct them. This is how time is saved, more often than not. These financial tools can be part of a more robust e billing system that includes matter management, contract lifecycle management, vendor management, work intake and workflow, as well as analytics and reporting. All of these applications, including the legal e billing, wrap into an enterprise legal management solution.

Enterprise legal management software creates a robust foundation for legal departments to run the necessary functionality to operate collaboratively with the in-house legal team and the outside counsel vendors. Law firms particularly like using ELM software because it provides the e billing system for their invoices. Moreover, any corrections or disputes during ebilling can be discovered and updated directly in the ELM dashboard. Not only is time saved, but legal spend costs are, too.

What Is Legal EBilling?

Legal ebilling eliminates paper invoices from law firms to legal departments. Vendor ebilling is completed and submitted by the enterprise legal management system or legal ebilling software. A digitized, electronic format creates many benefits for both the legal department and the law firm, making invoice review, approval and correction more streamlined.

Best Benefits of E Billing Software

Before we look at the myriad benefits of e billing software, it’s important to recall how a legal billing system used to be prior to the digital age of technology and applications.
Legal departments that hired law firms to supplement legal services did that manually with paper contracts and paper invoices submitted to the department. But, those invoices were not mailed or messengered to a central location. They were submitted to an in-house lawyer who served as the point person for the matter.

If the department was large enough to have an operations professional on board, then they likely collected each paper invoice, gave them a surface glance, and then routed to finance. The opportunity for errors and over-payments by the company were high. The time taken by the internal legal team took over and company legal business was put on hold monthly, quarterly and annually to resolve and close matters. If a dispute arose, that took more time and effort to resolve.

No one in a legal department or law firm desires to return to a paper billing system, and there’s no need to. The selection and deployment of e-billing systems creates wonderful benefits for both legal department and law firm. Here are several transformative benefits of note:

• The ELM software, mentioned earlier, includes smart financial management tools. Those tools do more than just allow for electronic submission of an invoice. They allow law firms to upload their LEDES or PDF invoice into a single application and central repository where all the invoices are received. One person manages each file, routes it appropriately, tracks its status, and finally submits it for payment when the approving parties have completed their review. This e billing software legal departments use and offer to their vendors becomes a time saver, risk-reducer and game changer for everyone.
• Faster approval time for all invoices happens without a blink. The reduction in paper processing is the first benefit of legal e billing, and the second is having AI-powered ebilling tools embedded in the smart financial management applications of the ELM software. The AI-powered smart tool can automatically flag invoice errors as the billing guidelines are written into the tool. It also looks for double billing and unapproved timekeepers. If errors are flagged, the invoice is returned to the law firm for correction. This helps reduce the touches within the legal department and creates a more accurate invoice for a quick final review and submission for payment.
• Analytical reporting on legal spend and costs is aided by the e billing software. The legal department is a cost center, and controlling costs is a primary goal of the department. The ability to track outbound expenses to law firms and other legal services vendors is critical for leadership to understand the overall health of the department and that of the company. The legal ebilling system provides enhanced visibility around that data so everyone can review the same analytics and make more strategic and data-driven decisions about budget and forecasting future legal spend.
• Vendor management is always a critical component of a law department. This data contributes to more-informed vendor selection processes with greater transparency about performance, wins, timekeeper mix, and partner hourly rates. Vendor management applications are part of the enterprise legal management platform. Selecting a robust ELM system ensures that vendor management integrates with contract lifecycle management, financial applications, matter management, reporting, and workflow management.

Considerations of Legal EBilling

With all of the components in place, legal ebilling software elevates the functionality and reporting process for the law department. Here are additional considerations:

LEDES vs PDF

Look for an ebilling system that accepts both LEDES format and a PDF from vendors. This is important because some smaller law firms hired for a specialty engagement or international firms may not have the ability to submit a LEDES invoice. The Legal Electronic Data Exchange format is an industry standard. Understand which format works best within the company, as the finance department may want a certain format over another.

Standard Coding

Billing guidelines are a critical component of electronic invoice submission. Those are dumped into the AI, and the AI tool reviews each invoice to ensure that guidelines are followed. This standard coding, known as the Uniform Task-based Management System, streamlines invoicing, invoice descriptions, guides timekeepers on appropriate language to describe their work, and helps in the coding and classification of the invoices.

Use of Extractive AI

With the billing guidelines programmed into the AI tool, its extractive component can automatically flag the errors. Look for intelligent financial management and ebilling software legal departments need to utilize the benefits of AI-powered e-billing tools.

Managed Bill Review

The use of managed bill review services is smart when AI flags invoice submission and further negotiation is required by humans. A managed bill review service ensures that the flagged invoice is thoroughly reviewed objectively, and they direct any negotiations, human-to-human, with the law firm. Not only does this save time within the legal department, but the team is expert in managing invoice review.

Legal departments without ebilling software suffer from time waste, inaccuracies, and potentially more costs. Those departments with the right applications for legal bill review realize many advantages by including them in their business operations solutions toolbox. Contact us to learn more about these applications.