You hear it everywhere; companies want to lower legal costs. They need AFA’s, lower rates, project management, a new set of task codes … the list goes on. All these might help lower costs.

I’ll give you another idea, adopt standards. Sounds too simple so let me explain. Let’s assume that a portion of law firms billing rates are based on the costs of doing business. The obvious costs are salary, rent and other overhead expenses. One expense that is coming to light is the hidden, or not so hidden cost of e-billing and following corporate guidelines. The cost isn’t in the actual transmission of the e-bill, today that’s pretty easy. The cost is the total lack of standards in the entire process of e-billing and finding ways to adhere to complex billing guidelines.

 I learned first-hand as I was researching a new technology called Bill Scrubber that was developed by my company. Firms told me that they were delaying their billings, proof-reading every entry on every bill, submitting bills that got rejected or short-paid, and finally writing off a great deal of money. Corporations need to understand that somehow all this is reflected back into law firm rates.

So one might draw the conclusion, that law firms are just inefficient, but that’s just too easy. The root cause of this issue is the lack of standardization and little progress has unfortunately been made in the last few years. The efforts by the industry volunteer organization LEDES, comprised mostly of software vendors and private law firms has been almost heroic. The board and members of LEDES have put forth sincere proposals to produce standards and a few are commonly accepted (sort of) like phase and task codes. I know many of these people and they have tried hard to get standards developed and accepted. However, the attempt to get a single standard new electronic submission design, for example LEDES XML accepted has not come to past. This project is 4-5 years old yet very few corporations use it. Isn’t LEDES 98B the standard … maybe all 400-500 variations of it might be considered standard(s). But LEDES 98B has some critical short-comings. There is just no standard.

Can you imagine if every corporation demanded a different size sheet of billing paper that their bills needed to be submitted on, or a completely different type of magnetic ink to be used in printing the bills so that their systems could read the bill electronically? Having no electronic submission standard is no different.

There appears to be no desired to adopt a simple way of submitting an electronic bill. How difficult can this be? There are hundreds, maybe thousands of iterations of e-bill requirements. Standards will reduce costs. Law firms need a way to get the all the billing guidelines sent to them electronically in a standard format and a single yet flexible standard submission template.

In my next blog post I’ll suggest some specific ways this can be done.