Why are Legal Billing Services Important for an Attorney ?

Why are Legal Billing Services Important for an Attorney

Legal Billing is a tricky process but one of the most important tasks in a law firm. Attorneys may find difficulty in recording time spent for each client separately and to bill them accurately giving the client a wrong impression that they are over-billed or may result in under-billing too.

There are many billing guidelines and formats which make this process complicated. Firms have to prepare bills in the standard LEDES format or in other custom formats.

Legal Billing includes preparing invoices, inspecting time sheets, and other billing related procedures. Invoice referred in Legal Billing relates to the cost of specialized services that have been given to the client and settlement of costs got on the client’s behalf.

Several rules have been implemented in Legal Billing Services to ensure that the invoice standards would match the competent representation even when complex legal services are involved.

These rules include:

1. Engagement Rules
A law firm is taken on the foundation of a normal letter that sets out basic terms of reference for the engagement.

2. Litigation Management Guidelines
The client provides the law firm with a detailed set of broad guidelines that stipulate what items the law firm can and cannot bill on conducting its defense. Details about the time permitted for specified items, as well as rates to be charged to it for services rendered.

The strategies also put forth the provisions for e-bills and invoice transmission; usually through a portal developed and driven by an external “e-bill systems vendor”. There is an element of competitive advantage in the design and application of the rules and insurers consider them to be proprietary.

3. Litigation Management Strategy/ Budget
The law firm returns to the retention letter and guidelines with a litigation management strategy that is encompassed in a budget. The budget put forth the tactic for the defense along with an estimate for costs in conformance with the guidelines. The budget can be considered to be confidential in whole or part to the extent that the policy includes procedures and marks beyond what is a matter of public record. Outlining a strategy to negotiate payment with estimates for thresholds and ceiling with a budget for timelines would be considered to be confidential.

4. Invoice Preparation
The law firm uses its own strategies to document the amenities provided and prepare an invoice for services rendered. Arranging includes the coding of tasks to comply with the guidelines and e-transmission specifications along with the amending of language to guarantee that it adapts to the dictionary and language the client dictates to be used in relating to the activities. Besides these situations, the law firm is permitted only to bill the client for services that have really been provided.

5. Invoice Transmission
Electronic (e-bill) transmission is turning into the standard for transmission of the invoice by the law firm. All clients require their law firm panels to submit bills electronically through exclusive “e-bill transmission systems” that are maintained by a sophisticated network of competitive e-bill systems providers. There is always a business relationship in place between an e-bill systems provider and the client that does not extend to the client/service provider relationship between the insurer and law firm. All of the e-bill management systems are designed to conform to an industry standard Legal Electronic Data Exchange Standard (LEDES). This is an open standard directed by a delegate board of trustees of partners in e-charge transmission.

6. Legal Bill Review
Once the invoice is electronically transmitted to the insurer it is reviewed by the insurer’s litigation management bill review unit to ascertain whether it conforms to the budget and to validate the amount for which an action or activity has been charged is within litigation management guidelines. The invoice may be returned for the amendment with instructions to amend it to conform to the budget and guidelines along with directions for reformatting codes and language. A dialogue and appeal may ensue between the bill review unit and the law firm. Once the invoice is acknowledged as legitimately organized and approved, the invoice is paid.

Thus proper time tracking and Legal Billing system will help attorneys to overcome all obstacles in legal service and ensure a safe client billing management.

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