The next time that you find yourself among legal administrators, try this:
You say, “Billing guidelines.”
Wait for it - you are about to hear a collective groan, that is almost guaranteed, if you are in the company of this fine group of legal professionals.
The reason for this reaction is completely understandable.
After all, billing guidelines, often a subset of the notorious Outside Counsel Guidelines (OCG), have become a pain point for law firms in recent years, due to the increased scrutiny taking place on the client side and the sheer volume of unique guidelines that firms are expected to manage. To make matters worse (pun intended), firms can face steep consequences for non-compliance, such as unnecessary write-offs and delays in payment. One new trend that we’ve seen at some firms is clients removing the ability to resubmit rejected bills, meaning that bills that were non-compliant upon the initial submission will be rejected with no ability to appeal or collect payment for billable time.
Despite the serious impact that billing guidelines can have on the firm, they can be difficult, if not impossible to manage. Complexities and inefficiencies in the timekeeping and billing processes, mean that many law firms continue to struggle with achieving compliance. Although many firms have come to accept this as a “cost of doing business,” the costs are rising, as today’s bills face increasingly more scrutiny.
Today's corporate clients are more savvy than ever before in identifying non-compliant invoices in order to save money on legal expenses. One of the most popular methods of cutting costs is through machine learning software offered by vendors who promise to save between 4% and 8% on legal expenses by tracking a firm’s actual invoices against established billing guidelines to identify discrepancies. When corporate clients identify non-compliant invoices, it can cost your firm in many ways beyond write-offs and rejections, including client trust, client retention and more.
That said, adhering to corporate billing guidelines is one of the most important factors in a firm's ability to remain competitive. It is now more important than ever before to focus on compliance, but it is also more possible than ever before to achieve compliance, thanks to technology that enables accurate timekeeping and billing.
Here are four tips to help you better adhere to client billing guidelines
#1: Review your guidelines, then commit.
The core reason that billing guidelines are so overwhelming is the volume of unique guidelines that exist across the client base. Of course, each set of guidelines is housed within an extensive set of OCG guidelines, which does not lend to a format that is easy to consume. The best way to address this is to review the guidelines and then summarize them into easy-to-digest bullet points, so that your attorneys and staff can quickly access the rules and understand what needs to be done.
#2: Provide centralized, easy access.
In addition to providing guidelines in an easily referenceable format, it is important for them to be housed in an area where timekeepers and staff can easily access them when they need them. There should be a central repository for billing guidelines that is convenient to access at any time and from anywhere.
#3: Address the underlying contributors to compliance.
Your ability to comply with billing guidelines is not dependent on following the rules, but also practicing good habits that serve as the foundation for compliance. This is where a commitment to contemporaneous time entry is paramount, as you cannot adhere to any billing standards without accuracy. Furthermore, items like the firm’s time entry policy ensure that these habits are being followed on a timely and consistent basis in order to have the inputs needed for compliance to be possible. For example, it would be impossible to understand resource allocation and budgets without an accurate and real-time understanding of time spent.
#4: Get buy-in organization-wide.
Like most organizational objectives, the culture of the firm has to support compliance with billing guidelines. It is important to understand all roles within the organization that own an aspect of billing guidelines and get these parties on board with their role and how they are expected to work toward compliance as a firm.
What are your tips for managing your outside counsel guidelines? Share your best practices in the comments section below.