eBilling: What the Future Holds for Law Firms

legal software

eBilling: What the Future Holds for Law Firms

by Candy Sharpe, Director, BillBlast

Here’s an all-too-common tale, that many of you can probably relate to: the invoice was past due on the firm’s accounts receivable (A/R) report and the partner was working his list.

He placed a call to his client to have one of those uncomfortable conversations about money. After some pleasantries, he got around to the purpose of his call. To his surprise, the client said his team hadn’t even received the invoice.

After hanging up the phone, the partner got with his billing department to investigate. He learned the invoice had been rejected by his client’s eBilling system, but no one knew why. After some research, it turned out a budget for the matter on the invoice had never been uploaded to the client’s eBilling system and so it was automatically rejected.

This is a true story and one I’ve heard many times over the years. However, it’s usually not just a single invoice; it’s 30 or 50 or even 100, depending on the size of the law firm. It’s spread out across many clients, each with their own unique billing guidelines and eBilling systems.

The mix of volume and detail means the process of navigating eBilling gets messy fast. The days of just submitting an invoice are over. Instead, there’s an entire process law firms must manage after the submission to be sure an invoice has been received and accepted – or to quickly understand the issue and how to fix it if the invoice is rejected.

Even the lawyers need visibility into the process, with real-time reporting so they understand the business impact on collections, realization, and profitability. The billing team needs tools to manage this process in an organized fashion, and the capacity to report on the status without a whole lot of back and forth that eats up billable time.

I’ve worked inside a law firm and have felt this pain first hand. Solving the eBilling challenge has been a personal quest of sorts.

Picking Up Where Time and Billing Ends

About a decade ago, law firms began to experience the proliferation of eBilling and the complications it was adding to the billing process. In response, many firms, including my employer at the time, found themselves adding headcount to help the firm navigate these challenges. But with billing complexities continuing to escalate, combined with the eBilling variations, adding head count is not sustainable, nor is it a solution.

As the old English proverb goes: necessity is the mother of all invention. The need for reducing paper and postage costs created the invention of eBilling technology – and there are many valuable tools out there. The problem is that each tool is different; if a firm has 100 clients, it could conceivably be dealing with 100 different eBilling tools, each with its own quirks, functions, rules, etc.

For many law firms, billing workflows look similar to this:

  1. Timekeepers record time
  2. Billing team creates draft bills for review by timekeepers
  3. Timekeepers review and edit draft bills
  4. Billing team creates bills and processes them to the client
  5. Billing team encounters errors with eBilling systems(s) and must document them on paper or in spreadsheets
  6. Meanwhile mangers, directors and collection team have no visibility that a bill has not been successfully delivered to the client
  7. Billing team must get errors resolved through timekeeper intervention
  8. Billing is delayed; collection of AR is delayed
  9. Collection team tries to collect on a bill, not knowing that hasn’t even reached the client yet
  10. Collections delayed; realization rates diminish; firm unhappy; client unhappy

There must be a better way! Technology is supposed to make our lives and jobs easier. eBilling for companies was an invention brought on by one necessity, and the problems it has created for the law firm billing process necessitates a new invention.

The Future of eBilling for Law Firms

eBilling systems are becoming even more sophisticated. The key for law firms is to identify the processes and tools to help manage the invoicing progression after submission. Firms must be able to see all of their eBills for all clients in one place and triage the reason for any invoice rejection and remedy the issue in a timely fashion.

Ideally firms can capture this knowledge to avoid the problem for the next invoice. More importantly, the firm needs to ensure that the A/R matches reality, so the lawyers can stay focused on solving legal problems for clients – and not chasing invoices.

All these years later and the story about eBilling is still being written. We are determined to give law firms more influence into how it ends – preferably with an invoice that gets paid without a hassle.

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