Modernising Legal Invoice Review

October 30, 2020 Celia Degge and Alex Hawkins

Lawyers spend too much valuable time each month manually reviewing and approving invoices from outside counsel. Now, it’s time for a change. 

How do you turn an impediment into an opening, an obstacle into an advantage? How do you take cumbersome, resource-intensive professional processes and make them simpler and easier to perform while extracting more value at the same time?  

This is a constant goal and challenge for organisations working to streamline day-to-day operations. And it’s the essence of Conduent’s Legal Invoice Analytics (LIA) – a globally accessible platform that is now available in Europe.  

A quick look back at defining legal standards

It was a quarter of a century ago when U.S. corporate law departments and insurance companies sought (for the first time in an organised way) to bring a new level of order, discipline and consistency to external legal task management. They were looking to impose structure and guidelines around the work law firms were carrying out on their behalf. The result of these efforts was an initiative called Legal Electronic Data Exchange Standard (LEDES), and the output was a series of task and activity codes. Codes covered activity, expenses, and timekeeper classification. Uptake was swift and soon there was a software industry to support LEDES adoption and implementation.

Nearly 20 years later, the Right Honourable Lord Justice Jackson’s work inspired the development of a set of codes (J-Codes) specific to litigation in England and Wales. These were ratified by the LEDES Oversight Committee. Despite widespread adoption in the United States, the rest of the world still lags. In fact, one Gartner report suggests 60% of legal e-billing solutions are deployed in the U.S. compared to only 22% in Western Europe and 15% in APAC.

Beyond industry standards, there are organisation standards too

While LEDES and J-Codes were important steps for the legal industry, the rules defining chargeable hours go well beyond these important standards. Every organisation has its own legal billing guidelines as well. For example, a rule that outside counsel cannot bill the organisation for photocopying, overnight deliveries, or local travel. Or that in-person attendance at a hearing is limited to just a single layer. A situation like that could result in a legal firm unwittingly sending more than one person to a hearing and being frustrated that they’re unable to bill for it — and their client being frustrated that the law firm is out of touch with its practices. There are many other examples like these that make the billing process a challenge for law firms and clients alike.

Manual review is inconsistent, inefficient and ineffective

Today, law departments are handling PDF invoices that can contain hundreds of line items or using invoice review systems that do not automatically review each line item against the organisation’s specific billing guidelines. When legal teams review these manually, leakage and inefficiency are inevitable. And the result is often inadvertent mistakes or lack of compliance with billing guidelines. This can cost the client a significant amount in excess fees and can also cause significant delays in law firms getting paid. The reality is that lawyers spend too much valuable time each month reviewing and approving invoices from outside counsel(s). Manual review is inconsistent, inefficient and often e ineffective. 

Reduce manual review hours by up to 90%

Conduent’s Legal Invoice Analytics (LIA) automates the invoice evaluation process. This cloud-based invoice review and validation platform automatically denies line items that violate billing guidelines, highlights potential discretionary rule infringements, and significantly reduces the number of line items requiring manual counsel review.

The impact can be transformative for organisations with significant legal spend — up to 90% reduction in manual review hours coupled with a 10% reduction in legal spend. Clients realise immediate and significant (consistently >200%) positive ROI. Easily configurable business rules enable automatic validation against the client’s specific billing guidelines and the ability to identify overpayments and revenue leakage. At the same time, a simplified and automated workflow reduces manual review time and associated costs. This also benefits external law firms: by automating, simplifying and speeding the invoice review process, the law firms receive payment up to ten times faster.

Legal Invoice Analytics provides full audit review, faster processing, and greater consistency. It also encourages enhanced data hygiene through consultancy and built-in data validation, improving the quality of legal matter data and enabling enhanced analytics and benchmarking.

Turn reliable data into actionable insights

Using reliable data, legal departments can turn that data into actionable analytics. They can, for example, analyse comparative costs by geography, by timekeeper or matter type, or by category of work — or a combination of all. For an organisation that uses perhaps 50 law firms across the globe, the benefits of these insights are as evident as they are material.

Furthermore, by deploying Conduent’s team of data scientists and developers, a client can integrate invoice data with external data. For example, incorporating data about resolution of matters — dismissed, settled, verdict, and the associated amount — permits the client to assess the overall cost effectiveness of its outside counsel.  

With Conduent’s Legal Invoice Analytics, it’s now possible to turn a previously inconsistent, inefficient and ineffective process into game-changing knowledge — replacing obstacles with advantage.

About the Authors
Celia Degge is responsible for business development in Conduent Legal Compliance and Analytics division in Europe. Alex Hawkins is a senior business product management consultant.

For more information, contact Celia at Celia.Degge@conduent.com or +44 7921 647905.

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