Rules to Remember When Enforcing Legal Billing Guidelines

Effective legal billing guidelines can fundamentally transform your law firm relationships. They have the power to push clarity and compliance up while pulling effort and expense down.

But without the right approach to enforcement, all that positive potential stays stuck on the page.

To ensure your detailed documentation translates into real-world results, keep the following keys in mind when enforcing your outside counsel billing guidelines.

Forge Internal Alignment First

Although the initial discussion may reach every corner of the department, the final act of authoring legal billing guidelines usually falls to a select few people. As a result, not everyone will share the same nuanced understanding the day your policies are published.

This workflow isn’t flawed, but it is incomplete. Because if those variations in knowledge result in conflicting feedback delivered to law firms, then you’ll only be adding to the confusion you’ve worked so hard to eliminate. So save yourself from that fate by holding at least a brief sync internally before sharing any new rules with outside counsel.

At a minimum, everyone on your team should know the broader law firm behaviors you are hoping to incentivize and the basic protocol for addressing violations. But it would also be wise to walk through any sections where you anticipate the highest potential for pushback among attorneys. You may not be able to avoid contentious conversations in the end, but your colleagues will appreciate this preparation.

Don’t Assume Understanding

Silently sending your billing guidelines as an email attachment is no way to notify your law firms. Whether you’re introducing your standard rules to newly engaged counsel or explaining an updated provision to a long-time legal partner, these conversations deserve real time and attention.

From an operational perspective, billing guideline discrepancies reduce productivity and delay payments. And from a strategic perspective, continued non-compliance could put the future of the working relationship at risk. So it’s in the best interest of both sides to agree on enforcement details early.

The most efficient communication strategy may be to appoint billing ambassadors on each side of the partnership. The legal department delegate can lead outside counsel training efforts and report on the resulting compliance rates. The law firm delegate, meanwhile, can be the single voice relaying questions and concerns to your team while driving improvements within their own.

Stay Open To Alterations

Enforcing legal billing guidelines is at least as much an art as it is a science. Because no matter how logical everything looks on paper, human behavior is rarely as rational or predictable as our plans.

That doesn’t mean you should be changing your rules as frequently as your outfits. Your default guidelines should still govern the overwhelming majority of outside counsel work. But there may be some scenarios where strictly enforcing the letter of the law isn’t the ideal strategy.

Considering the infinite range of processes, personalities, and practical areas that can define a law firm, it would be naive to assume each one will respond to your billing guidelines in identical fashion. A standard that’s intuitively accepted by one firm may be deemed impossible by another.

So what should you do when a rule is inevitably confronted with an exception?
Relax your policy? Stubbornly defend the statute? Collaborate on a mutual compromise?

Although there’s no correct answer that could apply to every scenario, the mistake to avoid would be making short-term decisions without regard for long-term relationships.

Automatically dismissing a good faith suggestion, for example, could introduce an air of hostility to an otherwise pleasant partnership. Alternatively, accepting and adapting that same suggestion could inspire a deeper sense of equity and loyalty.

Either way, establishing a dedicated point of contact within your law firms before such issues arise will likely facilitate smoother discussions.

Automate The Application

Generating workplace policies, debating their fairness, and encouraging their uptake are all socially complex tasks best led by humans. But when the task turns to the relatively simple job of categorizing legal services and comparing them against a set of standardized rules, humans have a surprisingly poor performance record.

The problem is not a lack of skill, of course. It’s a lack of scale. In-house attorneys and administrative staff members are all surely capable invoice reviewers in isolation. But when hundreds of pages of outside counsel invoices are dropped into their already overflowing inboxes, it’s unrealistic to expect unerring attention to detail.

Software, on the other hand, does not suffer from fatigue (or boredom). That’s why more legal departments are embracing e-billing systems that automatically enforce legal billing guidelines. Teams adopting this approach not only benefit from fast and accurate rule applications, but also a sudden surplus of time that can be allocated toward high-value, human-led tasks.

Capitalize On The Outputs

If your legal billing guidelines are documented, communicated, and automatically enforced, then your reward will actually be something much bigger than more efficient financial administration. You’ll have an objective record of how your legal services are delivered.

Which law firm has the highest rate of billing violations so far this year?
What billing category represents the highest proportion of external legal spend?
Who seems to be allocating more work to their executive-level than probably should?

This is only a small sample of the kind of questions that can suddenly be answered with data and reports rather than instinct and anecdotes. So once you’ve done the work to develop this dramatic informational advantage, don’t forget to wield it in your favor.

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