Professional Services Accounting ARTICLE -
E-Billing Benefits Law Firms, Too
Target Audience: Legal Professionals, Professional Service Firms, Law Firm Partners
If your law firm is like most, you implemented an e-billing system because you had to — your clients demanded it. In-house legal departments typically prefer electronic bills to paper statements because they save companies considerable time and money. But despite some technology and training costs, e-billing can benefit law firms as well.
Keeping Clients Happy
Client satisfaction is determined not only by relationships with your attorneys and support staff, but also with your accounting department or outside accounting service. If you’re sending paper bills, you may be putting your firm at a disadvantage to competitors that use e-billing. This is particularly true because many companies are closely scrutinizing costs and looking for ways to slash their budgets.
E-billing allows legal departments to import billing data into their own case-management systems, and quickly and easily route that information to the appropriate people for review, approval and processing. Besides saving time, electronic bills enable legal departments to track a firm’s budget use and adherence to outside counsel guidelines. This ultimately allows them to compare different firms or attorneys working on similar matters to determine which ones are the most efficient.
Progressive Practices
Electronic billing has been around for about 15 years, but many law firms are still dragging their feet making the transition, or if they have an e-billing system they’re reluctant to use it.
There are, of course, some drawbacks to e-billing, including software set-up costs and fees charged by outside billing services either by the month or per invoice. In addition, firms must train their attorneys and staff to use the software and Uniform Task-Based Management System (UTBMS) billing codes. And although many law departments adhere to the standardized Legal Electronic Data Exchange Standard (LEDES) format, those that don’t, or those that use a modified version of LEDES, may need customized bills.
On the other hand, e-billing can provide law firms with several benefits:
Faster payment. Because e-billing streamlines and standardizes the billing process, you could receive payment in as little as a few days instead of waiting 30+ days for remittance. You may, for example, want to offer clients a small discount on services for a 72-hour or one-week turnaround.
Reduced errors. Mistakes can happen at every stage of the billing process, but an electronic system limits the opportunity for human error in your or your client’s office. This can reduce the percentage of invoices rejected and returned for adjustment and resubmission.
Efficient marketing. Firms marketing themselves as cost-efficient can easily prove it by showing how closely they adhere to client guidelines for billing and staffing and stay within matter budgets. Some e-billing vendors even allow law departments to search their database for firms whose profile and representative clients match their needs.
Positive environmental impact. If your office hasn’t already adopted environmentally friendly practices, paperless billing is a great place to get started. Not only do you save money on paper, envelopes and postage, but you also contribute to a healthier environment.
Matter of Time
Although you can probably put off switching to e-billing to another day, it’s not advisable. Eventually, almost all firms will be expected to bill clients electronically. Why wait?
Find out how our expertise in professional services accounting can add value to your business. Email us or call us at 1 (888) 875-9770.
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