Legal E-Billing Software
Legal e-billing is the digitization of receiving, reviewing, and approving bills (invoices) from law firms and alternative legal service providers. By shifting this work from paper, email, and spreadsheets into a dedicated system, legal e-billing software gives in-house legal teams visibility into their outside counsel spend, reduces the time spent on administrative work, and helps to control costs. Legal e-billing typically is administered by legal operations, and in the largest organizations by a dedicated legal e-billing manager.
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Why Teams Adopt Legal E-Billing
In its 2020 State of the Industry Survey, the Corporate Legal Operations Consortium (CLOC) found that 76% of in-house teams are using legal e-billing software—by far the most widely adopted category of legal technology. There are a number of reasons why this is the case. First, outside counsel typically is the largest expenditure for legal teams and therefore represents the greatest area for potential improvement. Second, cost savings generated by using legal e-billing system can be used to fund additional legal technology projects. Finally, the category is well-established, with a community of consulting firms that implement and support the software.
Finance leaders sometimes question the need for legal e-billing program. They may assume that investments in enterprise-wide procure to pay and accounts payable software should be sufficient to meet the legal team’s requirements. This assumption, while well intentioned, overlooks the unique nature of outside counsel expenditure. It is unpredictable; unlike most goods and services, its cost cannot be easily understood or controlled through the use of purchase orders or annual budgets. It is also difficult to assess accurately: many law firm bills are dozens of pages long, making review time consuming and error-prone.
Key Capabilities of Legal E-Billing
Legal e-billing software includes key capabilities that deliver unique benefits for in-house teams, outside counsel partners, and finance counterparts.
- Law firm portal: Law firms can log in to the legal e-billing application and submit their bills securely, eliminating unnecessary emails and confusion.
- Timekeeper management: Law firms can submit rate changes, creating visibility and ensuring the in-house team is paying the agreed rates.
- Billing guidelines: Legal e-billing system automatically applies outside counsel billing guidelines, ensuring consistency of charges.
- Invoice review: A specialized user interface assists reviewers with evaluating charges, driving cost control and reduced administrative work.
- Accounts payable integration: Approved bills are sent to finance automatically, saving time and enabling law firms to be paid faster.
- Accruals: Law firms, the in-house team, and finance can understand the amount of unbilled work, facilitating improved financial reporting.
- Spend reporting: Self-service reporting on outside counsel spend with the ability to filter by time frame, practice area, law firm, matter, and so on.
Finally, legal e-billing platform often includes capabilities for matter management, creating a single system of record for managing outside counsel engagement.
The Future of Legal E-Billing
Of course, there have been many developments since legal e-billing software was first introduced, including the introduction of in-house legal operations, the rise of alternative fee arrangements, widespread adoption of the cloud, and accessible big data and artificial intelligence technology. Today’s legal teams are taking a more proactive approach to managing outside counsel spend using next-generation software called legal spend management. Brightflag’s legal spend management software is built around a core of artificial intelligence and machine learning, providing in-house legal teams with advanced technology to drive strategic change within their organizations.
Legal spend management goes beyond legal e-billing by helping in-house teams to proactively control spend rather than reactively pay bills. This philosophy recognizes that the series of decisions made before bills are received often have a greater impact on total cost than does reviewing the bills. Along these lines, the future of legal e-billing is helping in-house teams to settle debates about legal spend using data.
Popular Resources on Legal E-Billing
Insights From Brightflag
- 3 Soft Skills You’ll Need With New E-Billing Software
- The Human Side of E-Billing
- How to Automate & Accelerate Your Invoice Approval Workflow
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