More law firm invoices, and the revenue tied to them, are reliant on eBilling systems than ever before. Which eBilling system a firm uses depends on what system a client chooses. As a result, the staff that handles billing at a law firm must learn and manage dozens of different systems. As client requirements to use eBilling have exploded, law firms have had to grapple with the inefficiency that this situation creates. Here are five important trends that law firms should be aware of when creating process and technology strategies meant to bill clients more efficiently and get paid faster.
1. Client Demand for Value
Initiatives like the Association of Corporate Counsel (ACC) Value Challenge have driven a demand for alternative fee arrangements (AFA), value-based billing and other cost containment strategies for legal spend. Add legal process outsourcing (LPO) and the recession that started in 2008, and the traditional law firm business model has been turned on its head.
2. Client Demand for eBilling
What many firms do not realize is that eBilling is the primary reason that clients have been able to drive down the cost of legal services in any substantial way. It's not the efficiencies of paperless billing that have proven the most impactful, but rather the real power has turned out to be the data that resides in the eBilling system and the business intelligence tools that clients have developed to harvest and analyze it.
3. Use of Big Data at Clients and Firms
We have seen how clients are gathering and using data. A challenge for firms on this front is that traditional law firm systems do not give a full fiscal picture. Much of the data you need about the billing method, who is billing it, when it is delivered to the client and the payment status, is not easily accessible in most time and billing systems. In some cases, the data does not exist at all. For example, receivables and collection data is generally not readily available in the time and billing systems many firms use.
4. Applied Business Intelligence
The metrics coming out of eBilling systems have given clients the ability to better compare law firms and timekeepers to each other and better enforce billing guidelines like hourly rates, refusal to pay for copies, travel and time entries deemed "clerical" in nature.
5. Metrics
By using the UTBMS codes and other billing data available to them, clients are likely to know more about how your law firm works than you do. There is a set of metrics every law firm should know about what you bill (average timekeeper rates, blended rates, etc.) and how (number of invoices per month, number of bills, number of client cuts and their dollar amount). Having adequate access to the "how" metrics will help you better understand where your money is on a daily basis and where inefficiencies are in the billing/collections process.
eBilling for Law Firms
Now that you understand the trends, how should you respond? One of the tools that law firms have lacked is their own eBilling system that is powerful enough to respond to and take advantage of these trends. You want a product that is designed specifically to help law firms bill more efficiently by eliminating the need to go into multiple eBilling systems and by catching submission errors that delay payment. In addition to this basic functionality, you want one designed to integrate with any time and billing system and extract the data needed for billing without capturing, and compromising, privileged client transaction details. The goal is to bring law firm data related to daily cash flow status to a single point of access. In this scenario, data from the time and billing system interfaces with the eBilling system. This daily status reporting gives visibility into metrics that will help law firms better manage time entry, billing, collections and cash flow. This process can put firms in a position to take advantage of the trends in the industry rather than be controlled by them. As we have seen with clients, successful use of these trends to drive down costs, this kind of visibility can improve the way your law firm does business and lead to a healthier fiscal position.
Courtesy of Leah Beckham of BillBLAST.