E-Billing Operating Procedures (Pre-Flight Checks for Law Firms)

In aviation, a pre-flight checklist lists tasks that pilots and aircrew should perform before takeoff. It aims to improve flight safety by ensuring there are no forgotten essential tasks. Failure to correctly conduct a pre-flight check using a checklist significantly contributes to aircraft accidents.

Although nowhere near as critical as air safety, several law firms have established the principle of running “pre-flight checks” on their e-Bills before submitting them to a legal spend management or e-Billing system such as BusyLamp eBilling.Space. This is to correct any obvious errors on the e-Bill and reduce the % of invoices rejected in the first stage of the validation process. This leads to invoices being accepted and paid by the client faster. Over time, you can identify common errors and make processes at the firm can be more accurate and efficient. It also improves customer satisfaction, as it’s frustrating for in-house clients to receive non-compliant invoices.

One useful tool to support such “pre-flight checks” is an e-Billing Operating Procedures (e-Billing OP) document. Usually, one exists for each e-Billed client entity, covering the key validation rules for each e-Bill and the broader policies and protocols for working with that specific client and legal e-billing software.

Such documents are becoming more common at law firms. Billing Standard Operating Procedure documents come widely mandated in financial and government organizations. Several law firms have adopted and tweaked the idea to have something specific to legal e-Billing. With the increase in corporate counsel buying legal e-Billing software comes an increase in the number of clients that need billing in this way. It also adds to the volume and variety of billing guidelines that firms must remember. Operating Procedures documents allow these to be easily recalled and accessed and help prevent simple mistakes.

In this blog post, we’ll cover how to create and maintain your e-Billing OP document, sample “pre-flight checks,” and how to deal with billing errors.

DOCUMENTING THE E-BILLING OPERATING PROCEDURES

Many law firms have either written or are developing e-Billing OPs for every e-Billing client and/or generic e-billing tool. In order to gain the maximum benefit from this exercise, you need a consistent template against which to write all the e-Billing OPs. Your e-Billing OPs should include the following:

• The overall client e-Billing process flow and project scope.
• Timescales for valid billing, e.g., within xx days of the work.
• How to submit WIP and invoice data?
• How to use/invoice alternative fee arrangements?
• What data validation rules apply?
• How are disputed invoices/time entries handled?
• What is the escalation process for correcting rejections within the law firm?
• When will the valid invoices be paid?
• What expenses/activities may get disallowed?
• What UTBMS codes are required?
• How to amend/resubmit invalid data?
• Are any statutory/regulatory statements required?
• Are there any budgets set/how are they handled?
• Who to contact for queries?

The Operating Procedure may include the non-e-Billing agreed Protocols and Policies governing the client/law firm commercial relationship. Edit these if access to sensitive data is to be restricted.

PRE-FLIGHT CHECKLIST: VALIDATION OF E-BILLS

In addition to the policies mentioned above, your Operating Procedure document must include the checklist of validation criteria to avoid unnecessary invoice rejections. These cover quite basic e-Billing criteria for common and avoidable oversights. Taking the time to do these checks will save time in the long run. Some validation checks typically covered in the pre-flight checklist include the following:

• Are the hourly rates correct and as agreed?
• Are the timekeepers valid, and if required, are they pre-approved?
• Is the time being billed within the agreed time limits?
• Is there evidence of block billing?
• Are the narratives clear? Is there a minimum number of words required?
• If required, are there UTBMS codes for tasks/activities/expenses?
• Are there any disallowed expenses (e.g., Online Research, Local Travel), activities (e.g., Reviewing Files), or timekeeper classifications (e.g., Intern or Trainee) on the e-Bill?
• Are there any budgets or caps on this matter? Are we still within these limits with this bill included?

Subject to a few exceptions, most of the errors detected at this stage can be easily corrected. Some errors can be resolved by the e-Billing team, for example, missing timekeepers or incorrect rates. Other more significant errors, i.e., missing activity codes, vague narratives, block billing issues, tax errors, or other billing guideline breaches, must be referred to the revenue controllers or the firm’s legal team. This may inevitably delay the submission of the e-Bill. It’s important to note that the client would reject the invoice anyway, so it’s still faster to catch the error before submission.

Regardless of the type of error, they should get documented and their resolution communicated to the legal team. This helps your firm identify common errors and improve the billing accuracy (and, therefore, the processes’ efficiency) in the future.

Many law firms have implemented additional processes upon matter opening and will set an e-Bill indicator or flag in their Time and Billing system to show that this matter must be e-Billed. This will notify the matter partner/lawyers and e-Billing coordinator that crucial data items are required to stop the matter from being billed if missing. The firm’s e-Billing team can then run audit reports on a client-by-client basis to check that the expected data is present before the matter gets billed. (As noted above, you should have processes to refer many of these issues back to the business to resolve.)

COLLECTING CLIENT REQUIREMENTS FOR E-BILLING OPERATING PROCEDURES DOCUMENTATION

Now that you have the template for building your operating procedures document, you may still be wondering how to identify the clients’ e-Billing requirements in the first place! Ideally, the in-house client will have supplied you with a billing guidelines document signed off by both parties. You then use this to populate a “client matrix,” which includes the client’s data and billing requirements, your law firm’s data requirements, and any administration and special installation guidelines. In the interest of centralization, we recommend that the client billing guidelines and other specific e-billing requirements are in the e-Billing OP documentation. They must be visible to the relevant parties and adhered to by the legal team and the firm’s e-Billing/finance function.

THE CLIENT MATRIX IS PRIMARILY A SERIES OF TASKS WITH DATES FOR COMPLETION. THE MAIN SECTIONS ARE:

• New Client setup – includes client ID, e-Billing software vendor details, bill format, contact details, timekeeper types, and entities in scope.
• New Client Implementation Checklist – includes UTBMS codes, invoice template details, login, and password details, validation lists, expense codes, testing requirements, and go-live dates.
• Portal set- up – includes client and law firm data setup, user setup, rates and timekeepers, and reporting metrics.

THE INFORMATION FROM THIS CHECKLIST IS CROSS-REFERENCED AND INCLUDED IN THE E-BILLING OPS. COMPLETING THE CHECKLIST WILL HIGHLIGHT OTHER TASKS TO FOR COMPLETION FOR A GIVEN CLIENT, SUCH AS:

• Is any timekeeper mapping required? – Typically, from the law firm’s system to the client timekeeper classification.
• Are any data extracts needed? – e.g., existing open matters, timekeeper uploads, agreed rates, etc.
• Communications to the legal team – mandatory task/activity codes/Narratives etc.
• Client work types, is a PO number needed?

As with the Operating Procedures, the data-gathering checklist comes from the law firm’s e-Billing coordinator/team. Although these main sections refer to “new clients,” the client matrix should be updated if billing guidelines, or any other procedures from the client, change.

OPERATING PROCEDURES MAKE E-BILLING EASIER

There is no “one way” to do e-Billing, which is different in many law firms. One core difference is whether e-Billing is centralized or decentralized and the associated consequences of that approach. What seems consistent (and works) is when firms create a dedicated e-Billing specialist team. These carry various names but are essentially a team responsible for successfully uploading e-Bill files to the e-Billing vendor/client portal. This team can be in-house, near-shored, or offshore but will need clear Operating Procedures for each client with all possible outcomes and options documented and a clear escalation path for all unresolved queries. They will also require a general support model covering other non-client-specific scenarios. This level of documented support may be more important if the team is working offshore or remotely.

The scope of e-Billing is changing and is far from the original concept of loading e-Bills into a portal, handling the rejections, resolving issues, and getting the bills accepted. Evolving from this original requirement came the addition of matter budgets to the portal and the law firm’s responsibility to maintain them and ensure they are adhered to. More recently, we have seen clients make “added value” requests, such as adding client-only data to the e-Bill (such as their work types) and unbilled time and WIP uploaded to the e-Billing portal. This extension to the scope will only increase as the adoption of “beyond e-Billing” legal spend management technology, such as AI and machine learning, is spread wider. These requests are all helping in-house clients better understand their matter budgets and legal spend, and your law firm is a vital partner in assisting them to achieve these goals. But with this additional service comes complexity, making the need for clear e-Billing documentation at your firm even more critical.

Written by Bryan King