For some corporate legal and insurance claims departments, enforcement of billing guidelines seems like a potential source of conflict in outside counsel relationships. However, when implemented correctly, a well-designed program of billing guidelines and invoice review can actually improve that critical partnership while delivering significant spend management benefits, as well.
Episode 12 of the Legal Leaders Exchange podcast is a discussion about the importance of billing guidelines with three of ELM Solutions’ legal billing experts: Jeff Solomon, Senior Director of Product Management; Sharon Horozaniecki, Director of Operations for LegalVIEW® BillAnalyzer; and Michele Pratt, Associate Director for LegalVIEW BillAnalyzer. During the conversation, Jeff, Sharon, and Michele give practical advice about several aspects of billing guidelines and invoice review.
Why are quality billing guidelines important?
Billing guidelines serve as a guidepost for law firms. They identify client expectations and serve as a roadmap for the firm in effectively managing billing for that client.
Organizations introduce billing guidelines as a way to better manage their legal spend. In order to meet these goals, guidelines should be clear and concise, leaving no room for ambiguity or misinterpretation. They should cover the core objectives of the client company and let firms know how their billing should contribute to meeting those goals. For example, if diversity and inclusion is a key focus, then it is appropriate to include guidelines that ensure diverse staffing. If the organization has a goal to work more efficiently, then guidelines should indicate which activities are not billable at all or by which roles.
Some companies have defined billing guidelines but have not updated them as their company’s goals evolved or have simply written guidelines that are too aspirational or ambiguous. Quality guidelines lay the foundation of what legal and claims departments expect from their partner law firms, which helps increase their mutual engagement. By having these guidelines in place, legal ops teams are able to clearly see the direction that the organization is taking and know which activities are acceptable and unacceptable billing behaviors.
Building the outside counsel relationship
When implementing or updating billing guidelines, there are steps that legal and claims teams can take to ensure that the law firms – as well as internal staff – remain engaged and up to date on the effort. Our experts suggest the following change management best practices:
- Communicate openly, clearly, and often about the guidelines themselves and the progress you are making in the project of implementing them.
- Conduct educational sessions to help law firms and staff understand the billing guidelines, as well as the corporate goals and objectives they are designed to support.
- Solicit feedback from firms that may have experience with the guidelines of other clients so that the team can address any concerns they may have before the guidelines are implemented.
These relatively simple steps can make the process much easier and more transparent for law firms, which helps to maintain the partnership. Just as importantly, a high-quality change management effort will make it easier for law firms to achieve good compliance quickly.
A technology provider can help
One way to ease the burden of developing and enforcing billing guidelines is to work with a provider who can deliver technology and service that support the legal or claims team’s efforts. Artificial intelligence can help by comparing existing billing guidelines to industry peers and identifying any areas where the organization may be missing opportunities to improve their billing experience. When those results are combined with human legal billing expertise and experience, it makes the process of drafting or improving the company’s billing guidelines far simpler.
That same AI/human combination is also extremely powerful in the context of invoice review, where billing guidelines are enforced. AI can guide the invoice reviewer, highlighting those line items with a greater probability of requiring adjustment so that the reviewer can focus their attention there and conduct a more efficient and effective review. With the right provider, companies can even have an external team conduct the review and manage the appeals process with the law firm, minimizing the time spent by internal staff on enforcing guidelines while maximizing compliance and efficiency.
To hear the full conversation, listen to Legal Leaders Exchange: Understanding legal billing guidelines. If you are a podcast app user, be sure to follow our Legal Leaders Exchange show on your favorite app (Apple Podcast, Spotify, Google Podcast, Amazon / Audible.com, iHeart Radio) to make sure that you don’t miss any of our informative episodes.