eBilling – The Definitive Guide:
The key to eBilling success:
- Having the right billing expertise within the firm
- No reliance on individuals who are critical to the firm’s accounting team
- Creating and delivering eBilling metrics and data
EBILLING KNOWLEDGE AND EXPERTISE
The rapid growth of knowledge outsourcing in law firms is a function of recognizing what falls within a firm’s core competencies and what does not. When it comes to eBilling, law firms are challenged by their lack of access to three main areas:
For most law firms, the eBilling skills come from general billing experience spread across the firm. The billing department has some expertise, administrators have some expertise, but it also can come from a timekeeper. These different groups generally don’t work together as seamlessly as they should and are not likely what’s really needed to have a highly functional and effective invoicing process.
Law firm time and billing technologies don’t have the reporting structures or rules intelligence that are capable for the compliance necessary to meet eBilling standards. What firms require are solutions paired with the right technology that are sophisticated as the platforms their clients are using to review the invoices themselves. Relevant technology paired with the right people keep law firms current and completely in sync with their clients’ billing guidelines.
Even though law firms have been struggling with it for years, eBilling is a relatively new challenge. It’s very different from ordinary billing and it’s a system that is set up to award the payer, not the biller. As corporations have invested billions in eBilling software and third-party auditors, but there has not been similar investment from law firms. To compete with law firms clients, and their 3rd party administrators (eBilling Platforms), the legal industry would need to develop expert skills internally and technology. It’s fundamentally not going to happen internally in a law firm so their needs to be other solutions created. This is where Accounting and Technology firms and solution providers can step in to help with these critical skills, technology and focus.
RELIANCE ON INTERNAL BILLING PERSONNEL
Law firms tend to rely too heavily on too few billing specialists, whose role is to run the pre-bills, get the invoice out and address billing conflicts with their law firm’s clients. These key resources often are overwhelmed with work or have other opportunities this can create issues running these critical duties which can be a huge financial risk to the firm.
The general concept of risk being generated when business critical processes are placed on a limited number of internal resources is certainly not a new one. This well known issue is taught about and written about extensively. The risk is created by the possibility of those resources leaving the company, having other opportunities, getting sick to do the job at hand. Furthermore these resources are often short on the knowledge that they are perceived to be experts on.
Although loyalty is a great characteristic it can often be a huge problem in law firms. When you are loyal to people that create risk, it becomes your problem. Over reliance on a few internal resources employees for a business-critical process is a risk that many law firm managers have been acutely aware of all along. In these situations it takes a strong manager to make a sensible decision.
The ability to partner with accounting and billing companies helps to reduce this risk, since work can be spread across more experts with greater and more variable availability. Getting high-quality invoices out the door in a timely fashion ceases to be a challenge.
CRITICAL BILLING DATA
Most law firms remain data poor. This is particularly true in the area of law firm invoicing. The situation can be very frustrating for the leaders of law firms, since their clients tend to be data rich in the big data world that we live in. It can go as far as some clients believing that they know more about how the firms practice than the firms do internally.
Many firms think about data as it appears in their time and billing system. Which timekeepers have billed the most? Which clients are producing the most billable activity? What clients owe us money? These questions are less about effecting change and more about measuring the status of the situation.
Firms interested in bringing about real performance change, the most relevant data may reside in the details of the adjustments clients make to the invoices submitted. It is in these adjustments that each client is laying down what is really expected of the firm, and these cannot be taken lightly. Put another way, firm leaders should view client adjustments to their invoices as the difference between the way the firm practices and how the client would like them to practice. This difference should help to explain the changes the firm needs to institute to run better in the eyes of their clients. This isn’t only the difference in a happier client but it can be a difference in having a client (or not).
Access to new areas of billing expertise, reducing financial and operational risk to the firm and securing advanced reporting that is both actionable and relevant are the common objectives. As a more efficient invoicing process and maximized revenue become key objectives accepted by the law firm these objectives will also be adopted by partners and timekeepers across the firm as well.
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