The Challenges and Solutions of Electronic Billing

The legal industry is slowly and steadily adopting the latest technology. The article below, by Thomson Reuters ELITE, talks about the challenges and solutions regarding electronic billing. It emphasizes the challenges associated with multiple vendors and a lack of standardization and how it restricts the efficiency of electronic billing systems. Thomson Reuters Elite recommends automating processes and standardizing systems for law firms to be able to use electronic billing effectively and efficiently. Firms may want to implement EDI interchange software from companies like https://www.jitterbit.com/solutions/edi-integration/ for safety and organizational purposes.

It has become clear that, for law firms, not only is electronic billing here to stay, but adoption by corporate clients will continue to accelerate.

In principle, the benefits to a firm are obvious and sound. The corporate legal department will receive its bills electronically through a single interface that also allows it to route, review, and approve them. As a result, a law firm should be able to more easily ensure compliance with the client’s guidelines, expedite dispute resolution when there is an issue, create valuable data that can be mined for internal use, “go green” by cutting down on paper and mailings, and ultimately accelerate payment cycles. On the face of it, the only expenses are the small fees required by e-billing vendors.

Not so simple

However, there is a fundamental flaw in that principal argument. It assumes a single e-billing vendor and a single set of client billing guidelines, using a single file format that can deliver these benefits. The reality is that there are multiple e-billing vendors and multiple file formats. To illustrate this point, a recent ILTA E-Billing Survey identified 29 commercially available e-billing vendors (this doesn’t include the roughly 50 corporations that have developed their own system or require invoices to be sent via email).

Couple that with the roughly 1,300 corporations with their own unique submission guidelines, using one of the aforementioned systems, and the challenges that a law firm faces should become clear. Because it’s a major departure from paper billing (print-stuff-send), electronic billing often requires law firms to allocate or add more staff, have staff become more specialized in their duties, increase the amount of time it takes to collect on invoices, spend more attorney time on billing, and work from incorrect or incomplete data in the collections process.

So how do law firms take advantage of the benefits e-billing can offer? Like many things, the first step is acceptance. Next, a firm needs to evaluate the options, then construct a plan and follow through. By looking for ways to automate the process and develop standardized internal procedures, law firms can overcome many of the hurdles and costs involved with e-billing and realize many of the benefits it offers.

Lack of standardization

The greatest logistical problem when it comes to e-billing is a lack of standardized protocols. This problem is not related to any particular vendor; it’s based on the plethora of vendors and the fact that so many corporate law departments have expectations about e-billing from their law firms.

As an analogy, Microsoft