e billing, electronic billing

1. FM03: Electronic Billing
Missing the Train?
Get on Board!
Presented by:
Frederick J. Esposito, Jr., CLM
Director of Administration/CFO
Meyer, Suozzi, English & Klein, P.C.
2012 Region 2 Conference & Expo
Atlanta, GA
September 29, 2012

2. Let’s Start with a Quote
“What the world really needs is more
love and less paper work.”
-Miss Pearl Bailey

3. Let’s Chat About E-Billing
•How Many Firms Are Using E-Billing?
•How Many Firms Are Happy With E-Billing?
•How Many Firms Are NOT Happy With E-Billing?
•How Many Firms Are NOT Using E-Billing?
WHY NOT?

4. Evolution of Electronic Billing
•There was Paper –a Lot of Paper!
•For many Law Firms/Legal Departments, the paper
system remains

5. Evolution of Electronic Billing
Law Firms/Legal Departments
•Single Goal
• Translating Paper Bills on to the Screen
• “Aiming Low”
Today’s E-Billing Systems
•Matter Management
•Easier Budgeting
•Improved Bill Review & Data Culling
•Foundation for Improved Outside Spending Control and
Efficiency
•More “business-like” Practices

6. Electronic Billing
Law Firm Perspective
Why is Your Law Firm Doing E-Billing?
Because Clients Require It!

7. Electronic Billing
Legal Department/Client Perspective
Benefits
•Manage Cases More Efficiently
•Audit Law Firms
•Compare Partner/Lawyer Time
•Analyze Reporting and Benchmarking Data
•Paper-shuffling Declines
•Invoices Get Paid Faster! (That’s the Goal)

8. Electronic Billing
Law Firm/Legal Department/Client
Process
•Clients Require Firms to Send Their Invoices in
Electronic Form Directly to the Legal Department’s
Website or Through the Website of a Third-Party E-Billing
Vendor
•Electronic Billings Prepared in LEDES Format Developed
By PricewaterHouse Coopers in 1998 as an E-Billing
Standard
•LEDES –Legal Electronic Data Exchange Standard

9. Evolution of Electronic Billing
Legal Department Benefits
What is Driving the Rapid Adoption of E-Billing in
the Legal Profession?
• Savings
• Efficiency
• Low Cost
• Ease of Use
• Reporting
• Broad Acceptance by Law Firms
Greater Reliance on Metrics and Business Intelligence to
Manage Legal Departments

10. Legal Department
E-Billing: Cut Out The Paper
Recent Association of Corporate Counsel (ACC) and Serengeti
Survey of In-House Counsel found that only 19% of
respondents were using some sort of e-billing system.
• Automation is a Daunting Prospect
• E-Billing Companies - Industry unto Themselves
• Many E-Billing Options!
• Options Vary Based on Needs of Law Firms
and Legal Departments
• Corporate Structure
• International/Domestic Reach
• Preferred Budgeting Processes

11. Legal Department
E-Billing: Cut Out The Paper
Selecting an E-Billing System
•Expensive Proposition
• New E-Billing Systems
• Replacing E-Billing Systems –Cost-effective?
•Take the Time to Thoroughly Research
•Find an E-Billing System that is the Right Fit

12. Legal Department
E-Billing: Accelerate Approvals
Billing Review Process
• Paper Billing Review
• Comparing (Inches Thick) Legal Bills to Previously
Set Budgets and Billing Guidelines of Varying
Complexity.
• E-Billing Review
• Many E-Billing Systems Track Compliance
with Billing Guidelines and Budgets
• Greater Oversight with Little Effort

13. Legal Department
E-Billing: Accelerate Approvals
Billing Review Process
E-Billing Advances
E-Billing Software: Serengeti Tracker
• Feature that Automatically Rejects Invoices that Don’t
Comply with Billing Guidelines
• No Longer Necessary to Draft a Memo to Dispute an Item
on a Bill
• Future Advances include Firms being able to Test their
Bill against Billing Guidelines BEFORE Electronic
Submission –Avoid the “back and forth.”

14. Legal Department
E-Billing: Work The Data
Legal Industry Focus
•Evolving Client-Law Firm Relationships
•Alternative Fee Arrangements (AFAs)
•“Death of the Billable Hour”
Legal Departments endorse a “partial paradigm shift”
•Focus remains on the legal work
•Billable Hour is the Byproduct, NOT the Focus
•E-Billing Systems –Critical tool in structuring AFAs
• Legal Department Perspective
• Where is the money going?
• Getting Biggest Bang for the Buck?

15. Legal Department
E-Billing: Work The Data
Legal Department Competitive Edge?
E-Billing provides information and a wealth of
statistical and cost data information to Legal
Departments which includes types of cases and
tracking of tasks
“Powerful Advantage Over
Law Firms?”
Legal Departments “share” information with Law
Firms to create “fair” relationships.

16. Law Firm E-Billing
What Do Client Legal Departments Want?
Legal Department –Policies and Procedures
Requirements & Expectations of Law Firms
• Schedule of Approved Billing Rates
• Rate Increases MUST be Approved
• No Automatic Future Conflict-of Interest Waivers
• Identify ALL Attorneys/Timekeepers
• Acknowledgement/Compliance Sarbanes-Oxley
• Communication!

17. Law Firm E-Billing
What Do Client Legal Departments Want?
Management
• Legal Contact
• Relationship Partner
• Lead Attorney
• Engagement Letter
• Scope of Representation
• Tasks to Be Performed
• Proposed Staffing
• Professional Level/Billing Rates
• Discount Structure
• Description of any AFAs
• Alternative to Staffing/Utilization of Outside
Vendors

18. Law Firm E-Billing
What Do Client Legal Departments Want?
Staffing and Work Product
• Matter Staffing Approvals
• Timekeeper Billing of Clerical Functions
• Retention of Experts and Outside Counsel
• Educating Timekeepers/Basic Principles of Law
• Legal Research

19. Law Firm E-Billing
What Do Client Legal Departments Want?
Document Retention/Data Privacy
Code of Professional Conduct
Diversity

20. Law Firm E-Billing
What Do Client Legal Departments Want?
Conduct of Litigation
• General Policies
• Budgeting*
• Motion Practice
• Prior Review of Pleadings and Memoranda
• Affidavits and Declarations
• Discovery Practice
• Appeals
• Settlement Authority/Affirmative Litigation
See Exhibit A

21. Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Fees
• Negotiated Fee Arrangements
(fixed fee, blended, hourly, full or partial contingency fee)
• Timekeeper Rates MUST be Approved!
• What Legal Departments Will/Won’t Pay!

22. Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Legal Departments will NOT pay for Timekeeper
billings in reference to:
• Organizing a file
• Copying and/or filing documents
• Duplicative time spent on research
• Reviewing/Analyzing Conflicts of Interest
• Preparing/Processing
• Third Party Invoices
• Billing and/or reports
See Exhibit D

23. Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Disbursements and Other Charges
• Legal Departments will NOT pay the following:
• Secretarial/Word Processing
• Facsimile Charges
• Photocopy Expense of more than $.___/page
• Unreasonable use of Messengers/Couriers
• Timekeeper Travel (Unless Prior Approved)
See Exhibit D

24. Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Invoice Submission
• Billing Thresholds/Frequency
• Matter Billing Only
• Disbursement Itemization with Detail
(where appropriate)
• Research Charges (may require detailed explanation)
• Timely Billing
• Third Party Service Providers
• Approved Vendors and Providers

25. Law Firm E-Billing
What Do Client Legal Departments Want?
Billing Policies and Procedures
• Auditing of Invoices
• Legal Department Matter ID Numbers
• Electronic Billing
• Uniform Task Based Management System (UTBMS)
Codes
• Invoice Presentment
• Payment

26. Law Firm E-Billing
What Do Client Legal Departments Want?
Electronic Billing Submission Protocols
• Uniform Task Based Management Codes (UTBMS)
• Series of codes used to classify the legal services
performed by a law firm in an electronic invoice
submission. (Exhibit C)
• Electronic Invoicing Implementation Requirements
• LEDES 1998B & 2000 Format Fields (Handout #1)
• Timekeeper Data Formats (Handout #2)

27. Law Firm E-Billing
What Do Client Legal Departments Want?
LEDES 1998B Specification
Design Criteria:
• Keep It Simple Stupid (KISS)
• Make it unambiguous
• Diverge from existing formats as little as
possible
• Law Firms provide only information that is
needed
• Meet the needs of law firm software vendors to
meet the above criteria

28. Law Firm E-Billing
What Do Client Legal Departments Want?
LEDES 2000 Specification
• Poorly designed
• Many inconsistencies and shortcomings
• Virtually impossible to deploy consistently from
corporate law department to corporate law
department, law firm to law firm, client to client.
What Did We Learn From This?...............

29. Law Firm E-Billing
What Do Client Legal Departments Want?
“The More They Complicate the Plumbing,
the Easier it is to Stop Up the Drain!”
-Commander Montgomery Scott, USS Enterprise

30. Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
UTBMS coding for time entries is broken into Three Time Entry
components:
Phase Codes describe the phase of the work performed.
Phase Codes begin with a letter to distinguish the code set used
and are always numbers in multiples of 100.
•L100 indicates the Assessment, Development and Administration
phase of handling a litigation matter; L200 indicates the Pre-Trial
Pleadings and Motions phase, etc. (See Exhibit C)

31. Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
Task Codes describe the task performed.
Phase of work performed is inferred from the first 2 characters
of the Task Code and are followed by numbers that are (at least
as originally set forth) multiples of 10.
•L110 indicates Fact Investigation/Development tasks; L120
indicates Analysis/Strategy tasks, etc. (See Exhibit C)
Both of the codes in this example associate to Assessment, Development
and Administration phase of the Litigation Code Set because both begin
with L1.

32. Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
Activity Codes describe the actual work performed by the
timekeeper.
Activity codes always begin with A1 and there are eleven codes
in total. The Activity Codes are exactly the same across all of the
original ABA UTBMS sets.
•A101 is used to indicate that the timekeeper performed work
associated with Plan and Prepare for; A102 indicates that Research
was performed; A103 indicates Draft/Revise; etc. (See Exhibit C)
In e-billing, Law departments decide whether Activity coding is required at
all on time entries.

33. Law Firm E-Billing
What Do Client Legal Departments Want?
Uniform Task Based Management Codes (UTBMS)
Expense Codes were created to classify the expenses submitted
by law firms on their invoices.
Expense codes begin with an E and are numbered consecutively
from 101 to 124. The Expense Codes are exactly the same
across all of the original ABA UTBMS sets.
•E101 is used for Copying; E102 for Outside Printing; E103 for
Word Processing; E104 for Facsimile; etc.
It is not unusual for law departments to mandate maximum charges per expense
item (like $.07 per page for internal copies) or to exclude usage of certain
expense codes (like disallowing use of E124 Other)

34. Law Firm E-Billing
What Do Client Legal Departments Want?
• Electronic Billing Submission Protocols
• LEDES 2000 Format Fields (Handout)
• LEDES 1998 Format Fields (Handout)
• Timekeeper Data Formats (Handout)

35. Law Firm E-Billing
What Do Client Legal Departments Want?
Sample Legal Department Exhibits
Exhibit A: Budget Format
Exhibit B: Billing Requirements
Exhibit C: Uniform Task Based Management System
Exhibit D: Non-Compensable Items/Disbursement
Limitations & Restrictions

36. Law Firm E-Billing
Electronic Billing Software
Most Popular
Law Firm Time and Billing Systems
• Most E-Billing Programs Built-In

37. Law Firm E-Billing
Electronic Billing Software
Sampling of Vendors Supporting LEDES
(Southeast)
• Acuity Management Solutions
• Aderant
• Bridgeway Software, Inc.
• Datacert, Inc.
• Mitratech Holdings, Inc.

38. Questions

39. Your opinion matters!
Please take a moment now to evaluate this
session.
Go to: http://alanet.org/2eval
Thank You!

40. Contact Information
Frederick J. Esposito, Jr., CLM
Director of Administration/CFO
Meyer, Suozzi, English & Klein, P.C.
990 Stewart Avenue, Suite 300
Garden City, NY 11530
Email Address: FJE@msek.com
Phone Number: 516-741-6565
www.msek.com
LinkedIn: www.linkedin.com/in/fjesposito
Twitter: Lawmgtguru