LEGAL SPEND COMPLIANCE PART 1
Being able to understand your data is key to moving forward in a changing legal industry. Corporate law departments want to know how analytics can be used to help with decision-making and finding value. Law firms and bill examiners want a solution to ensure billing compliance and get paid faster. Finding a place to start and make sense of it all can be a challenge by itself.
Not to worry. For those who aren’t familiar with Legal Decoder's Legal Spend Analysis technology we have put together a 2-part primer to help take the first step in understanding your data. Legal Decoder’s Compliance Engine analyzes line items on billing hygiene, workflow efficiency, and staffing. This post will discuss Billing Hygiene. The next post will cover Workflow Efficiency and Staffing.
Good Billing Hygiene isn’t just inputting time and a short (or very long) description of the work done. It means line item narratives are descriptive yet succinct to maintain good Billing Hygiene. One of the most common issues we see is Block Billing. Here’s an example of Block Billing:
“Review and final comments to plan; disclosure statement and final revisions to approval motion and instructions regarding filing and service; numerous conversations with co-counsel regarding solicitation issues.”
Here is another example of Block Billing:
“Review, analyze case law re confirmation issues (2.3); review, revise summary of same (.4); draft analysis of same (.4); correspond with R. Miller, C. Person, R. Smits, re same (.4); review, analyze precedent re same (.4); review, analyze confirmation timeline issues (.1); review, revise pleading re same (.2); correspond with F. Gore, A. Luck, C. Pagano, re issues re same (.3); correspond and conference with R. Mathis re same (.2); correspond and conference with P. George, J. Teague, M. Turner, N. McMillan, Company re ERISA meetings (.3); review and analyze issues re same (.4); conferences with T. Hilton re plan issues (.3).”
It’s easy to see what makes up Block Billing. Too many narratives combined into one narrative. Each mini-narrative doesn’t fully describe the work or the context of the work. As with the second example, there are 10 narratives crammed into one narrative which makes it difficult to understand the work done.
Here is an example of a well-written narrative:
“Review and analysis of discovery requests directed at debtors regarding events leading to the Ch. 11 and post-petition operation of the debtors.”
The description of the work is succinct and, on its own, the context of the work can be traced to the matter. Well-written narratives provide a complete picture of the work that has been done for the client and allows firms to track/manage matters appropriately.
Another common Billing Hygiene issue we see are Vague Entries and they are exactly what they sound like: Entries with vague descriptions of work.
Here are some examples of Vague Entries:
“Further email updates”
“Emails re same”
Vague Entries don’t provide description or traceability to the work. A few Vague Entries might be acceptable but when it is habitual it becomes a problem for the timekeeper, law firm, and client. The client doesn’t know what work has been completed and what it is paying for. The law firm doesn’t have the ability to map the work performed to the matter. And it looks bad for the firm and the client because neither party can justify the work that was done.
Lastly, we see a lot of issues regarding Communication Inspecificity which just means the timekeeper didn’t properly identify the party he/she was in communication with. Here’s an example of Communication Inspecificity:
“Participate in committee conference call.”
Not only does the timekeeper not specify who she/he was in communication with but the entry is also vague. A better narrative could’ve been “Participated in committee conference call regarding SmithCo appeal with General Counsel.”
The ability to analyze, quantify, and collect valuable information from your legal spend data can unlock untapped value. New insights can lead to better decisions and strategies. Both the client and firm can better manage work-related matters, budgets, and costs using information drawn from data. The legal industry is moving towards a data-driven model where surfacing information from data is the difference between adapting to the changing times or staying the same and watching the competition move forward.
For part 2 of this primer click here