How Long Does It Take Big Law Firms to Publish Client Invoices?aderantuser
by Craig Dekshenieks, Director, Content & Marketing Operations, Aderant
The time it takes law firms to process and publish client invoices can be grouped into two categories. Those that get it done in a week or less, which is about 40% of firms and those that take a week or longer, which is about 60% of firms.
These findings stem from the 2018 Aderant Business of Law and Legal Technology Survey. Keep in mind this survey uniquely polls business of law professionals such as those that typically support law firm finance and billing processes.
We sliced up the data in several ways, looking for anomalies and outliers – by size and geography for example – but the results were similar. In addition, the findings were consistent with the same survey conducted the previous year.
The chart nearby breaks out the time in greater detail. You can see we get the 40/60 percentage split by adding the percentages of those firms that take a week or less, and those firms that take a week or more, respectively.
Do Law Firms Take Too Much Time on Invoicing?
Law firms do take too much time on invoicing, according to the survey respondents. About half, or 48% said their firms burn up time editing and reviewing pre-bills. Further, an overwhelming majority (94%) say this happens at least some of the time.
The chart nearby breaks out the data in detail. Again, these findings are consistent with the same survey last year, and what we hear anecdotally from law firms frequently.
So, invoicing becomes as a heavy lift – a protracted, if not painful, exercise the entire firm has come to dread. Even more importantly, every touch on a pre-bill costs a law firm money in the following ways:
- It is time spent on non-revenue generating activities;
- Slow billing leads to write-downs;
- Repeated reviews lead to write-downs on write-downs; and
- It drags out the entire WIP-to-Cash cycle which constrains cash flow.
These are real stories law firms have shared with us privately, but the survey also provided a sense of the sentiment around billing. A representative sample of the open-ended commentary offered around this question in the survey included the following:
- “The billing process isn’t user-friendly enough, therefore it has to pass several stations before the bill is finally sent to the client in the format the client wants.”
- “Pre-bills require too much review time due to inaccuracies in time gathered on matters.”
- “There are a few timekeepers that are behind the curve and miss the prebill deadlines concerning their time entry. Recapturing additional time entries and reissuing prebills becomes problematic in the process.”
- “Inefficiencies – many manual processes are necessary in the electronic billing process. Timekeepers not paying attention to guidelines on the front end, making more work for the back office on the back end.”
- “The pre-bill currently goes back and forward between the fee earner and accounts for edits.”
- “Complex billing requirements (e.g. 3rd party bills and split bills). Time recording always needs reviewing as we never tend to just bill whatever has been recorded and tailor each bill to levels the client will accept based on agreed estimates.”
The rise of outside counsel guidelines (OCGs), billing guidelines and e-billing have had a profound influence on invoicing. However, this adds to the managing partner’s case for modernizing the law firm billing process.
Four Steps to Improve Billing Efficiency
We have helped law firms dramatically improve their billing process and reduce the amount of time and churn spent here. Indeed, some have gone from months to weeks – and even from weeks to days. Below are four steps for getting started.
1) Define a process.
The first step to improving any process is to write it down. Document and map out your billing process in written and visual forms. Any inefficiencies will become apparent for all to see and this helps build consensus for change.
2) Go paperless.
It might seem like a quaint idea this far into the information age, but there are plenty of law firms that still print pre-bills and physically run them the office for review. It’s slow, inaccurate and costs money. In addition, implementing paperless billing will also open new opportunities for automation.
3) Automate the routine parts.
A simple example of automation in paperless billing is the introduction of the workflow. This means when one review is complete; the billing system automatically notifies the next reviewer. This provides a transparent way for partners to see where a pre-bill is stuck and if necessary, move things along. Since the edits are made electronically, changes to the invoice can immediately be observed in the financial forecast. In other words, if a lawyer writes-down work, a firm can see the impact on profitability.
4) Add OCG compliance earlier and across practice management.
The details of OCGs can be extracted and transformed into automated rules. These are rules that can warn, guide and alert timekeepers to potential client billing violations earlier in the process and across practice management. For example, it can automatically identify violations at the point of time entry, during hard or soft expense disbursements, and of course, during the bill review process.
Billing as a Communications Opportunity
For many lawyers, the discussion of money is uncomfortable, but it doesn’t have to be that way. The invoice is the link between the practice of law and the business of law – it’s an opportunity and a channel of communications.
Instead, consider the invoice a chance to demonstrate the value of the legal work your firm delivers to the client. An excellent place to start initiating that communication is to develop a streamlined billing process that enables your firm to publish client invoices in a week or less.
We’ve just opened the 2019 Business of Law and Legal Technology Survey to see how the numbers have changed since last year. Please join your peers and complete the survey HERE.
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