Legal bill review is a critical process for corporate legal and insurance claims departments because it helps ensure that outside counsel law firms conform to the guidelines that you and they have agreed upon for how they perform and bill their work for you. However, many in-house lawyers responsible for reviewing bills don’t consider it a high-priority task. These busy professionals understandably tend to focus their attention on the practice of law more than on spend-related tasks.
Fortunately, technology can help reduce the burden of bill review on in-house counsel. Artificial intelligence (AI) is ideally suited to aid with this task, empowering legal and claims teams to do more work in less time and concentrate on higher-value work.
Here are five of the ways AI can help your organization make bill review more effective and efficient:
Better understanding of billing guidelines: Even a well-trained human can’t have perfect recall of every word of their company’s billing guidelines, which means people sometimes miss violations. These oversights can lead to law firms being less careful about adhering to guidelines because they don’t get the feedback from their client that doing so is of the utmost importance. But an AI engine can absorb a colossal amount of data and apply that intelligence to invoice review, identifying violations, encouraging better compliance, and driving process improvement. This approach can result in up to 20 percent better billing compliance, with additional enhancements in law firm consistency over time.
Improved outside counsel guideline content: Establishing billing guidelines can feel like reinventing the wheel. While legal and claims departments may vary concerning their priorities for billing guidelines, there is a great deal of overlap among companies within industries. Therefore, a comparison of your billing guidelines to those of other companies in your sector can be beneficial. It can help identify gaps where your guidelines miss an opportunity for improvement or areas that may be more complex than needed. AI is the best tool for conducting this type of comparison because it can base its analysis on an enormous amount of very specific guideline data.
Improved efficiency and cost savings: When a bill reviewer receives a stack of invoices and hundreds of line items, it can feel like a burden and even be intimidating (especially if bill review isn’t their only job). In addition, it reduces the time they can spend on other responsibilities, which are often more interesting for them and more impactful to the organization’s goals. Instead of manually poring over every line item of every invoice, legal and claims specialists can use the AI’s findings to focus on those areas where they can add the most value. By leveraging AI, they become more effective at reviewing bills even while spending less of their time on the task. In many instances, adding AI to a legal bill review process can yield up to 10 percent estimated cost savings.
Strategic, data-driven decisions: With legal professionals now commonly playing a more prominent role in making strategic business decisions and offering legal advice, they must be sure to remain aligned with their company’s overall goals. By reducing the amount of time they must spend on the bill review function, they can spend more time understanding business needs and offering more strategic counsel. In addition, their decisions about invoice review are far more data-driven thanks to the input from AI.
Stronger relationships with law firms: Law firms want to make their clients happy and continue to earn business. Billing guidelines are a practical tool for firms in that effort because they are clear statements about what the client needs and expects of them where billing practices are concerned. However, if a client does not widely and uniformly enforce guidelines, law firms get less feedback about what they can do to satisfy the client. By fostering better compliance and finding areas for improvement, AI can help legal departments build better relationships with their law firm partners. In addition, when firms better understand the reasons for adjustments, the appeals process also runs more smoothly, and payment cycles speed up.
For a more detailed discussion of AI’s positive impact on legal bill review, including business case studies and estimated savings, download our free eBook: Achieving Optimal Efficiency with AI-Powered Legal Bill Review.