E-billing technology: maintaining a cutting edge

In this article, Charlie Morgan, client relations executive of LSG, shares his views on how technology and supporting bill review services are enhancing the performance of corporate legal departments.

He shares his experience and vision of the future in this changing space and outlines the benefits of using a single platform based on the international billing standards of the Legal Electronic Data Exchange Standard (LEDES). 


We continue to learn from our clients and, indeed, they drive our development of new e-billing, matter management and reporting solutions to mirror their processes and meet their needs. Technology solutions do not stand still, they must evolve and keep up with the changing needs of business and we enjoy this challenge. There are always lessons to be learned.

Our clients require a solution that not only tracks and reports on legal spend (eg law firm fees, expenses and disbursements) but also ‘other related experts’ (eg a marine surveyor based in Singapore). General counsel want to manage and report on both their ‘traditional legal’ and ‘other experts’.

The demand for effective compliance of invoices against their service level agreement and billing guidelines remains the same.

We have also seen an increasing demand for more sophisticated reporting tools so that the general counsel or head of legal can obtain high level and detailed reports (and everything in between) on all matters.

Typical questions are: are we getting value from our legal suppliers? How can this be measured? How much is spent on trainees, paralegals, assistants, associates, junior or senior partners? Does budget tracking supported by technology generate savings? Can I receive reports automatically every month to fit in with my schedule? What is LSG’s philosophy on bill review and compliance?


At this point, I would like to ‘set the scene’ by outlining the foundations of e-billing without which uniform and consistent legal data could not be provided. The work started in the mid-1990s, when major US law departments and insurers wanted to better understand the services provided by outside counsel.

A joint group including the American Bar Association, the Association of Corporate Counsel and PricewaterhouseCoopers was formed to create a unified electronic billing standard.

As part of this effort, it was decided that electronic invoice time entries should be task-based and aggregated by type of work performed, resulting in the possibility that multiple time entries could result from the services performed in a single day on a matter. The project to create a coding system ran simultaneously with the effort to create a standard billing format and resulted in the Uniform Task Based Management System (UTBMS) code sets.

The e-billing project group morphed into what is now known as the LEDES Oversight Committee (LOC, of which LSG is a member) charged with maintaining the standards for the exchange of billing and other information related to the delivery of legal services. It is an international, voluntary, not-for-profit organisation comprised of legal, insurance industry and corporate representatives.

The LOC is dedicated to using open standards that cater to no one organisation or group of organisations, in order to uniformly satisfy the complex needs of the legal industry based on five basic principles: keep it simple; make it unambiguous; diverge from existing formats as little as absolutely necessary; only ask for information the law firm is typically able to provide from their financial system; and meet the needs of corporations, law firms and legal industry software vendors to the maximum extent possible consistent with the first four criteria.

So, with the foundations in place, what does this mean for the buyer of legal and related services?


The vast majority of buyers of legal services use paper-based invoice submission, review, approval and payment processing systems. However, the final step in accounts payable is typically electronic.

This leaves a large disconnect between service providers (SPs) that are aiming to generate fast payment and their clients’ ability to process invoices quickly via internal business processes and management authorisation.

The LEDES billing formats bridge this gap 
as they enable law firms to submit electronic invoices that can be validated 
by the technology, and approved by the 
in-house lawyer. Also, legal software vendors have aligned their products to enable firms to easily and cost-effectively produce the required LEDES formatted 
bills for electronic submission.

Depending on the particular LEDES format used invoices can be submitted in any currency from anywhere in the world 
and once approved, they are sent onto accounts payable or a third party for payment processing.


Another important tool many clients 
value is the ability to budget. Tracking actual spend against the budget provides clients with the ability to respond proactively as the budget erodes. The 
in-house lawyer will typically request a budget (eg life of case or phased level) 
and staff plan from the outside lead 
lawyer so that its erosion or exhaustion 
may be tracked as the bills are submitted and approved.

Different ‘hard-stop’ rules can be incorporated: for example, an invoice 
cannot be submitted unless there is sufficient headroom in the budget. These rules can be switched on at any time through the life of the program enabling behavioural change to occur in managed stages. Budgeting supported by technology generates control and savings.

A phased approach is generally preferred 
by our corporate clients rather than 
the ‘big-bang’ approach. Budgets can 
be re-submitted at any time to reflect 
the changing circumstances of the 
matter or case. In doing so, there is transparency and an audit trail to 
better manage costs.


Unique to LSG is our bill review or guideline compliance service – a business process outsourcing service. This is an optional service that gives a more granular review of the invoice against your service level agreement (SLA) or litigation billing guidelines.

The resolution desktop provides a 
method by which the bill submitter can clearly understand the reason for any 
non-compliance potential reduction 
and may then challenge it. LSG are 
non-confrontational with your outside counsel or non-legal vendors and treat them equally as customers within the process. Our objective is to ensure your SLA/billing guidelines are objectively complied with.

Once any billing potential reduction issue is resolved, the bill passes to the client approver (eg in-house lawyer), for a qualitative review and a press on the ‘approve’ button, before the invoice is batched and queued for payment processing.

Alternatively, this service can be used 
on one-off, complex matters as a form 
of audit or Legal Bill Review. We can take 
a recently closed claim or file and 
undertake a detailed study and analysis of the billing in order to determine how compliant or otherwise they would have been against your or market-based SLA’s 


General counsel typically require high level and detailed reports (and everything in between) on their department and external counsel. A ‘dashboard’ style tool is preferred, in our experience.

Configurable reports containing tables, charts and graphs can be produced at the click of a button and give detail on, for example, fees, expenses, budget erosion, in-house lawyer, guideline non-compliance and supplier performance trending. The reports can be ‘diced and sliced’ according to selected search criteria agreed with the client.

Typical reports requested by our clients include cost pattern for the last 12 months, total matters open, budget total, submitted invoices total, paid invoices total, total paid vs submitted invoices, total number of invoices, fees vs disbursements comparison, line of business – budget vs actual, timekeeper information, timekeeper cost split (chart), top 10/25/50/100 matters by spend.


The general answer is ‘there aren’t any’. 
It is now possible to set up a local, national and/or global e-billing solution for a client and all its divisions anywhere internet access is available. This is due to the ubiquity of web-based solutions and the cost of setting up and maintaining these systems has dramatically decreased over the years.


The cost is typically based on the users, or the billing volumes involved, plus the local or global nature of the implementation. Staff who are currently processing paper invoices should be happy (I would hope!) about removing paper from their in-trays.

In the e-billing world, professional service providers are responsible for loading their invoices into the e-billing system online. The in-house lawyer (or their manager if required) simply needs to approve and process these for payment, all of which can be dealt with electronically from within the same e-billing application. Removal of paper from the billing process is also helping organisations to meet their Corporate Social Responsibility policy commitments because invoices are sent and approved electronically.


Organisations should be thinking not 
only how their processes can be improved by using fast and efficient electronic solutions, but also how these solutions 
can be used to: i) ensure compliance against your SLAs; ii) drive decision making for panel management; and iii) enhance internal and external performance.

Consider the power of budgeting and a more ‘project management’ oriented approach towards case/matter management. Optimal settlements and resolutions are the real goal here.