Today, one of the most popular methods of cost savings in the area of legal spend management is e-billing. Some of the key drivers for selecting an e-billing system are invoice savings, efficiency, and the availability of metrics and reporting. In addition, the low cost of many e-billing systems (around 1% of legal spend reviewed) has made it a viable cost management tool for both small and large legal departments.
However, when reviewing invoices, it is not enough to depend solely on an e-billing system. Regardless of what might be touted by e-billing vendors, there are items that a software review alone cannot catch. Whether you have an internal staff dedicated to bill examination or you use an outsourced bill review vendor, it is important to have an attorney review in conjunction with the computer-based analysis. This 2-part article provides a general overview of issues with e-billing software, why an experienced bill review professional is needed, and then dives into the specific areas that cannot be identified by software analysis alone.
General issues with e-billing
Two common issues with e-billing reviews are the inaccurate flagging of items and the failure to identify items that are non-compliant with billing guidelines. Inaccurate flagging results when an otherwise payable fee or expense entry contains a “trigger” word and is flagged by the e-billing software. Alternatively, failure to identify items occurs when non-payable items do not contain trigger words and therefore are not identified by the software search.
Necessity for an experienced bill review professional
The above stated issues with e-billing lead to a greater necessity to have a separate internal department (versus depending on the in-house attorneys in the legal department) or an outside vendor for invoice review. Inaccurate flags lead to more time spent by the in-house attorney on the initial review or alternatively, more time spent on appeals by law firms. Inaccurate flagging can lead to a potential loss of money as busy in-house attorneys may not catch all of the billing issues that an experienced bill review professional is trained to identify. In-house attorneys may have more pressing duties and obligations concerning their cases and do not have the time to stop and shift gears to review invoices. Additionally, an outside auditor or in-house bill review department will take the time to interact with outside counsel to explain, discuss, and resolve billing issues- a benefit not offered with pure e-billing. And with more exact classifications and categorizations, organizations will receive more accurate and detailed billing data which allows for more meaningful analysis and reporting.
We have just reviewed some of the broad issues with e-billing (inaccurate flagging of items and the failure to identify non-compliant items) and why it is necessary for an experienced bill review professional to review the invoices once they are run through an e-billing system. In Part II of this article, available next month, we will take a look at some specific billing issues where software will not accurately catch items, or where timekeepers can outsmart computer searches by avoiding certain “trigger” words.