Integrating Multiple Systems: Making e-Billing Work

Electronic billing systems have become very popular in corporate law departments because they can save both time and money. Invoices can be routed electronically, reducing cycle time, and can be automatically compared with a company's outside counsel guidelines, guaranteeing compliance. The concept behind electronic billing is that it is almost no additional work, that the invoice approval process is faster, and that the firm will get paid more quickly.

Unfortunately, the reality of electronic billing is a little more complicated. Law firm clients often use different electronic billing systems, requiring the creation of customized invoice formats or manipulation of electronic files manually. As more clients continue to require electronic bills from their outside law firms, the challenge is in finding ways to more efficiently create and manage electronic invoices.

Facing the Challenge

While each electronic billing product/service is relatively easy to set up, there are more than a dozen different providers (e-bill processors), each with their own process for uploading invoices. While many in-house legal departments have adopted the standard LEDES (Legal Electronic Data Exchange Standard) format, designed to allow time-and-billing systems to work seamlessly with most electronic billing systems, and UTBMS (Uniform Task-Based Management System) codes, a system of common codes for tracking law firm tasks and activities, most clients require at least some additional codes or other deviation from the standards. The result for outside law firm accounting departments is:

• Increased Invoice Set-Up Time. Many clients modify the LEDES standard, which can require extensive time for the law firm billing departments to customize templates for each new e-bill client. In some cases, setting up a new e-bill client can take up to 10 days.
• More Time Preparing and Uploading Invoices. While most time-and-billing systems export invoices in LEDES format, it takes time to accomplish this and to correctly upload the LEDES file to a client's electronic billing system. As electronic invoicing continues to grow dramatically, law firms can find themselves spending more and more hours on this part of the process alone, sometimes dedicating one or more full-time employees.
• Lack of Tracking and Transparency. Once invoices are uploaded and resident in the different systems employed by various clients, it can be difficult to know exactly where each invoice is in the process. An incredible amount of due diligence is required to monitor for rejected invoices that need to be corrected and resubmitted.
• Collections. All of this can have an adverse effect on collection speed. The extra time involved in preparing invoices, tracking invoice status across multiple applications and delays in resubmission of rejected invoices ' along with a billing staff with less time to devote to collection efforts ' can have a meaningfully adverse effect on a firm's “diary-to-cash,” a metric for collection speed which measures time from the date the attorney incurs the time on the client's behalf through the date the resultant invoice is paid.

While the purpose of all electronic billing systems is to improve client relationships with a billing process that is quick, accurate and accessible, the reality is that many of these systems are no more efficient than the old paper-based systems. Ironically, the process can be so time consuming that it can easily strain the resources of a firm's accounting department, and ultimately lead to a decrease in client satisfaction.

Choate's Story

Choate Hall & Stewart LLP is a law firm with over 200 lawyers and 250 staff members operating out of one Boston office. Choate ranked 159 in the 2008 AmLaw 200 Survey, with gross revenues of $150 million. The firm's core practice areas are private equity, public companies, mergers and acquisitions, technology and intellectual property, patent litigation, insurance and reinsurance, major commercial litigation and wealth management.

In order to avoid the many electronic billing problems that plague so many law firms, Choate wanted a single system that automated the creation of electronic bills, automatically uploaded them to all of our clients' electronic billing applications and allowed the firm to track the status of all invoices in one place. The system also had to be efficient and easy to use, both on a day-to-day basis and for setting up new clients. Choate's IT department also wanted a system that was simple to install.

Choate created an in-house team to evaluate all of the options available and chose eBillingHub from IGD Systems. eBillingHub offers a single portal to process e-billing. It integrates with most e-billing offerings, basically providing a link from a firm's time-and-billing system to all of the firms' clients' electronic billing applications, enabling submission of invoices to multiple electronic billing applications in a single step. The system also provides a single Web screen to help users control multiple e-billing submissions and track electronic billing invoices across platforms, replacing the manual tracking the firm had been doing with an Excel spreadsheet.

eBillingHub is delivered as “software as a service” (SaaS) so there is no hardware to purchase or install. The SaaS model did cause Choate one major concern: subscription-based pricing. As is typical for the SaaS model, eBillingHub bases its fees on usage. Instead of charging for maintenance, installation or training, it charges in “bill bands” starting at 100 invoices per month for $1000, increasing in bands of 100. There is no cap, so Choate was concerned that as the number of electronic invoices continued to grow, the monthly bills would become prohibitive. After scrupulously comparing the cost of in-house electronic billing to that of the subscription service ' taking into account matters of time, money, and, above all, client satisfaction ' Choate determined that this service was the right choice for the firm.

How It's Working

Choate's initial installation took less than four hours. And the average set-up time for each of the firms' clients is approximately 15 minutes ' if eBillingHub has the client's template on file. If there is no existing template, a new template is built (for no charge) within 72 hours. Choate can now upload an entire billing cycle with a few clicks of a mouse.

The majority of Choate's electronic invoices are uploaded through eBillingHub, allowing the firm to upload an entire billing cycle worth of invoices in minutes, rather than days. And all invoices are tracked from a single system. Without eBillingHub, it would have been necessary for the firm to add headcount to its billing department. Instead, its existing staff can spend energy on improving the billing experience for its clients by improving accuracy and quality control.

As a result of the commitment Choate has made to fully automate its electronic billing process, the firm has seen a substantial improvement in average diary-to-cash, which has a positive impact on the its finances. But more importantly, Choate has made it clear to clients that it values every aspect of their relationship. It isn't enough to simply provide first-class legal advice; every point of interaction with clients must be professional, focused and easy.

Client Service Means Billing, Too

Law firms are expected to be responsive, and clients appreciate a quick response ' whether it is to a legal question or billing inquiry. By processing and tracking invoices with eBillingHub, Choate is able to respond quickly when its clients choose to start receiving invoices electronically. Clients can send their first electronic bills in days or even hours, rather than having to wait for the firm to get the client online. Once they are up and running, Choate's invoices arrive more quickly, helping clients ensure that expenses accrue to the proper month or quarter, especially if an invoice was automatically rejected and must be adjusted and resubmitted.

Similarly, clients sometimes request electronic billing data from the firm. They may need data to support requests related to their audits, or for other internal tracking or convergence projects. With eBillingHub, the firm is able to respond quickly to any of its clients' informational needs.

Finally, with eBillingHub, the clients' electronic billing systems automatically approve a higher percentage of invoices, without required adjustment and resubmission. And when there are problems they can be found earlier and more easily. Following up by telephone is expensive and frustrating, not only for the firm but for the client as well. Choate is saving its clients' time ' and interruption ' by less frequently having to communicate by phone or e-mail to check the status of an invoice.

Choate move to electronic billing has improved client service. The fact that it is also having a positive impact on the firm's bottom line and making Choate a better place for its accounting staff to work is an additional benefit that reinforces the firm's decision.

Electronic billing systems have become very popular in corporate law departments because they can save both time and money. Invoices can be routed electronically, reducing cycle time, and can be automatically compared with a company's outside counsel guidelines, guaranteeing compliance. The concept behind electronic billing is that it is almost no additional work, that the invoice approval process is faster, and that the firm will get paid more quickly.

Unfortunately, the reality of electronic billing is a little more complicated. Law firm clients often use different electronic billing systems, requiring the creation of customized invoice formats or manipulation of electronic files manually. As more clients continue to require electronic bills from their outside law firms, the challenge is in finding ways to more efficiently create and manage electronic invoices.

Facing the Challenge

While each electronic billing product/service is relatively easy to set up, there are more than a dozen different providers (e-bill processors), each with their own process for uploading invoices. While many in-house legal departments have adopted the standard LEDES (Legal Electronic Data Exchange Standard) format, designed to allow time-and-billing systems to work seamlessly with most electronic billing systems, and UTBMS (Uniform Task-Based Management System) codes, a system of common codes for tracking law firm tasks and activities, most clients require at least some additional codes or other deviation from the standards. The result for outside law firm accounting departments is:

• Increased Invoice Set-Up Time. Many clients modify the LEDES standard, which can require extensive time for the law firm billing departments to customize templates for each new e-bill client. In some cases, setting up a new e-bill client can take up to 10 days.
• More Time Preparing and Uploading Invoices. While most time-and-billing systems export invoices in LEDES format, it takes time to accomplish this and to correctly upload the LEDES file to a client's electronic billing system. As electronic invoicing continues to grow dramatically, law firms can find themselves spending more and more hours on this part of the process alone, sometimes dedicating one or more full-time employees.
• Lack of Tracking and Transparency. Once invoices are uploaded and resident in the different systems employed by various clients, it can be difficult to know exactly where each invoice is in the process. An incredible amount of due diligence is required to monitor for rejected invoices that need to be corrected and resubmitted.
• Collections. All of this can have an adverse effect on collection speed. The extra time involved in preparing invoices, tracking invoice status across multiple applications and delays in resubmission of rejected invoices ' along with a billing staff with less time to devote to collection efforts ' can have a meaningfully adverse effect on a firm's “diary-to-cash,” a metric for collection speed which measures time from the date the attorney incurs the time on the client's behalf through the date the resultant invoice is paid.

While the purpose of all electronic billing systems is to improve client relationships with a billing process that is quick, accurate and accessible, the reality is that many of these systems are no more efficient than the old paper-based systems. Ironically, the process can be so time consuming that it can easily strain the resources of a firm's accounting department, and ultimately lead to a decrease in client satisfaction.

Choate's Story

Choate Hall & Stewart LLP is a law firm with over 200 lawyers and 250 staff members operating out of one Boston office. Choate ranked 159 in the 2008 AmLaw 200 Survey, with gross revenues of $150 million. The firm's core practice areas are private equity, public companies, mergers and acquisitions, technology and intellectual property, patent litigation, insurance and reinsurance, major commercial litigation and wealth management.

In order to avoid the many electronic billing problems that plague so many law firms, Choate wanted a single system that automated the creation of electronic bills, automatically uploaded them to all of our clients' electronic billing applications and allowed the firm to track the status of all invoices in one place. The system also had to be efficient and easy to use, both on a day-to-day basis and for setting up new clients. Choate's IT department also wanted a system that was simple to install.

Choate created an in-house team to evaluate all of the options available and chose eBillingHub from IGD Systems. eBillingHub offers a single portal to process e-billing. It integrates with most e-billing offerings, basically providing a link from a firm's time-and-billing system to all of the firms' clients' electronic billing applications, enabling submission of invoices to multiple electronic billing applications in a single step. The system also provides a single Web screen to help users control multiple e-billing submissions and track electronic billing invoices across platforms, replacing the manual tracking the firm had been doing with an Excel spreadsheet.

eBillingHub is delivered as “software as a service” (SaaS) so there is no hardware to purchase or install. The SaaS model did cause Choate one major concern: subscription-based pricing. As is typical for the SaaS model, eBillingHub bases its fees on usage. Instead of charging for maintenance, installation or training, it charges in “bill bands” starting at 100 invoices per month for $1000, increasing in bands of 100. There is no cap, so Choate was concerned that as the number of electronic invoices continued to grow, the monthly bills would become prohibitive. After scrupulously comparing the cost of in-house electronic billing to that of the subscription service ' taking into account matters of time, money, and, above all, client satisfaction ' Choate determined that this service was the right choice for the firm.

How It's Working

Choate's initial installation took less than four hours. And the average set-up time for each of the firms' clients is approximately 15 minutes ' if eBillingHub has the client's template on file. If there is no existing template, a new template is built (for no charge) within 72 hours. Choate can now upload an entire billing cycle with a few clicks of a mouse.

The majority of Choate's electronic invoices are uploaded through eBillingHub, allowing the firm to upload an entire billing cycle worth of invoices in minutes, rather than days. And all invoices are tracked from a single system. Without eBillingHub, it would have been necessary for the firm to add headcount to its billing department. Instead, its existing staff can spend energy on improving the billing experience for its clients by improving accuracy and quality control.

As a result of the commitment Choate has made to fully automate its electronic billing process, the firm has seen a substantial improvement in average diary-to-cash, which has a positive impact on the its finances. But more importantly, Choate has made it clear to clients that it values every aspect of their relationship. It isn't enough to simply provide first-class legal advice; every point of interaction with clients must be professional, focused and easy.

Client Service Means Billing, Too

Law firms are expected to be responsive, and clients appreciate a quick response ' whether it is to a legal question or billing inquiry. By processing and tracking invoices with eBillingHub, Choate is able to respond quickly when its clients choose to start receiving invoices electronically. Clients can send their first electronic bills in days or even hours, rather than having to wait for the firm to get the client online. Once they are up and running, Choate's invoices arrive more quickly, helping clients ensure that expenses accrue to the proper month or quarter, especially if an invoice was automatically rejected and must be adjusted and resubmitted.

Similarly, clients sometimes request electronic billing data from the firm. They may need data to support requests related to their audits, or for other internal tracking or convergence projects. With eBillingHub, the firm is able to respond quickly to any of its clients' informational needs.

Finally, with eBillingHub, the clients' electronic billing systems automatically approve a higher percentage of invoices, without required adjustment and resubmission. And when there are problems they can be found earlier and more easily. Following up by telephone is expensive and frustrating, not only for the firm but for the client as well. Choate is saving its clients' time ' and interruption ' by less frequently having to communicate by phone or e-mail to check the status of an invoice.

Choate move to electronic billing has improved client service. The fact that it is also having a positive impact on the firm's bottom line and making Choate a better place for its accounting staff to work is an additional benefit that reinforces the firm's decision.