Listen. We get it. Legal billing guidelines are hard to get excited about.
So if your team hasn’t formalized its rules recently (or ever), you’re certainly not alone.
But once you realize all the legal operations headaches that better billing guidelines can cure, you might be surprised by how much interest you suddenly have in invoice coding.
It’s 8 pm on Thursday and you’re still at your desk. Your phone is silenced, your coffee is full, and if you really focus you can probably finish by midnight.
This is a scene familiar to just about anyone who’s spent time manually reviewing legal invoices. And if you don’t have the benefit of clear billing guidelines, it’s probably more of a habit than an anomaly. Each new matter feels as difficult as the one before it, and each new law firm adds its own idiosyncrasies for you to interpret in the narratives.
Better billing guidelines immediately put you on a different path. The more systematic approach reduces the number of judgment calls you need to make and turns most of your experience into easy, default decisions. (Standardized rules will also be a key requirement for any automated invoice review solution you hope to implement in the future.)
Your internal efforts will improve your external relations as well. Once your partner law firms have a clear rubric to work from, they’ll naturally start submitting fewer non-compliant expenses over time.
The end result? Within a few months, you could start measuring your invoice review process in minutes (not coffee cups).
The time that invoice review takes away from other (professional and sometimes personal) activities is frustrating in its own right. There’s also the issue of the panic sometimes caused by what you uncover in the process.
Imagine, for example, adding up the numbers at 11 pm on Thursday only to realize that the subtotal for research on a matter is about 10x higher than you expected. To start, you’ll probably spend the next 30 minutes furiously recalculating the expenses. But what if the figure isn’t a mistake?
Think of the conversation you’ll have to have with the law firm if you want to classify the costs as violations. Think of the conversation you’ll have to have internally if you ultimately have to accept the charges as legitimate. Then think about how all of that anxiety could have been avoided with better billing guidelines.
Not only would they help shape more predictable law firm billing behavior (as discussed above), they would also serve as an objective resource in what could otherwise become heated conversations.
You’ve finally begun analyzing the invoice set you’ve been avoiding all day and soon notice what you consider to be a number of inaccurate fees. You flag them with your law firm and politely explain that you have been incorrectly billed. They disagree.
Where the conversation goes next will largely depend on the quality of your legal billing guidelines.
If your policies are unclear (or absent), then you might receive a succession of emails and voicemails that extend well into the next week. And worst of all, you’ll know it was at least partly a problem of your own making.
If your billing guidelines are plainly and precisely stated, then the more likely outcome is an attorney who quickly shrugs off the initial disappointment and goes on with their day. Even if the debate does continue, though, it will start from a more civil place. Instead of reacting angrily to an unexplained rejection, attorneys will more often request clarification that could prevent similar confusion in the future.
Either way, your law firm relationships won’t be marred by resentment and your days won’t be derailed by disputes.
The finance team just emailed you a second reminder that the payment submission deadline is hours away. If you make them stay late again, they’re not going to be happy. But if you don’t get through all the invoices, there will be a much louder chorus of law firms complaining that you didn’t pay them on time.
This is where ineffective legal billing guidelines start to impact more than just your sleep schedule. If your invoice review process is still defined by manual tasks, expensive surprises, and passionate debates, you’ll likely end most months disappointing at least one set of financial stakeholders.
Deadline day doesn’t have to feel like a sprint to the finish, though. More clarity at the start of your legal billing workflow automatically accelerates each task along the way. Most invoices will quickly go through without a second thought, and you’ll have ample time remaining to address any minor discrepancies.
In the end, that means payment reports submitted prior to any reminders and bills reimbursed before any attorney starts to worry.
The last consequence of ineffective billing guidelines is also the hardest one to see. Over the long term, though, it may be the one most deeply felt.
After accounting for the core services they deliver to the business, corporate legal teams are often already looking at a seven- or eight-digit subtotal. And with cost efficiency always on the minds of their executives, proposals for further spending on internal innovation are often delayed or dismissed.
So where can you find the budget for more of the modern tools that could transform your legal operations? If you look closely enough, you may see it sitting inside the bills submitted by your partner firms.
Following the invoice review improvements made possible by better billing guidelines, it’s not uncommon for teams to realize a cost savings equivalent to 5% or more of their annual spend on outside legal counsel. And if you can achieve that, who could argue with your plan to make a few long-awaited investments?
Want to create better billing guidelines, but don’t know where to start? Use our free sample set.