The challenge for many lawyers and firms has been to leverage performance and profit whilst remaining compliant of the Outside Counsel Guidelines. The answer may be found through software and automation – and more specifically time recording software.
Law firms are now all too familiar with Outside Counsel Guidelines. Those 15-plus pages you get from every commercial client when they first take you on, setting out the rules of engagement such as:
- how often you can invoice them;
- what costs can be included in said invoices;
- how you itemise your bill;
- who can and can’t handle what aspects of work;
- the minimum increment of billable time;
- the total time billable per day, and so forth.
One of the challenges is that this varies from client to client, but in truth it boils down to three golden rules:
- be transparent in what you are charging for;
- be accurate in the amount of time you are charging for;
- don’t take advantage of the client.
All clients want billing that is timely and which accurately and precisely reflects the work done on their behalf. They all want a level of predictability – so that legal spend can be planned and budgeted for and there are no unpleasant surprises. Above all, perhaps, they all want transparency – that is full visibility of exactly what they’re paying for, often to a high degree of granularity. The underlying driver is that clients need to see and feel the value that they are getting for their legal spend.
The challenge is in how you as a law firm implement these guidelines in such a way that you achieve compliance, and without them becoming a costly burden on the firm or the individual.
The cost of non-compliance
Implementing Outside Counsel Guidelines can be onerous and costly but not addressing them effectively can be costly in several ways such as financial penalties for non-compliance and the time cost of chasing a fee-earner to clarify an invoice.
There’s also often a temptation to remove a non-compliant line from your invoice rather than delay submitting the whole invoice for the sake of one non-compliant item. This is a slippery slope.
It may not seem cost-effective to chase down an attorney over a stray 15 minutes within a $50k invoice. But once you start doing this habitually, those dropped line-items will start to add up to ultimately a significant amount of money.
There’s also the cost to your reputation and relationship with the client. If your firm is forever submitting invoices that need to be queried; forever trying to push through expenses that violate Guideline requirements; forever surprising the client with costs they didn’t anticipate – you will make your firm unpopular.
Enforcing the rules
So how can firms enforce the Outside Counsel Guidelines efficiently and cost-effectively? The simple answer is with technology that can step up to help everyone in the firm apply the rules of the game consistently.
There are two main areas where software and automation can help you seamlessly apply Outside Counsel Guidelines.
First, the firm has to convert the Guidelines, which are usually in a Word document, into an electronic form where the rules can be consumed and enforced by all your intake systems. Several systems exist that can convert and host Outside Counsel Guidelines in electronic and structured form.
Second, the rules need to be referenceable and consumable by all the systems performing an enforcement role. For example, your time recording software ought to be able to reference and apply the above 8-hour rule that has been made available by the hosting system. Likewise, a good time recording system can accommodate rules such as the validation of narratives as well as who is authorized to act on different matters.
It means that once the rules are electronically available for consumption, whenever one of your attorneys or assistants tries to enter data that infringes a rule, the system will refuse to accept or validate the input. Once you have these rules in place, their enforcement is automatic.
This means that you are able to produce transparent, compliant invoices that are a true reflection of the work your team has done in real time – and with the aim of the software being to capture and record as much billable time as possible, you can be sure that it is a tool to help maximise your profit within the Guidelines, not to restrict it. Time, after all, is revenue.
Click here to learn more about Advanced’s time recording and capture software, Carpe Diem.