What technology and processes do clients expect firms to be using?
Welcome to this month’s issue of inVOICE. These “5-minute reads,” brought to you by InvoicePrep, are short, informational executive briefs designed for law firm executives and managing partners. They provide practical tips and provoke new ideas to make your management of your Firm more effective. (For our prior newsletters please visit us here).
Last month, we discussed six key law firm trends, as summarized in the 2017 CounselLink Enterprise Legal Management Trends Report (February 2017). Each of these trends highlighted a different aspect of law firm competition — that is, the pressure is on for law firm executives to find ways to compete that are non-traditional and effective.
This isn’t news to those law firm leaders whose firms are knocking it out of the park. But for the rest of the industry, I’ve argued that it makes sense to understand what law firm clients and payers are being sold (or at least told) by consultants and technology vendors about how they can better control their legal spend. Understanding what the most powerful messages are on that side of the industry can help law firm executives respond accordingly.
And, as I outlined last month, the messaging is harsh for firms, with e-billing and auditing firms promising dramatic cuts in legal invoices. One company promises that that for every dollar invested in its e-billing platform, the service will produce 14 times that in “savings.” Others promise to “save” their customers a minimum of 10 percent in legal fees in the first year.
Does that scare you?
What Should A Law Firm Do?
I read a very interesting article that I think is right on point in answering that question. It is an excerpt from Ari Kaplan’s Reinventing Professionals podcast posted on Law.com and it resonated with me partly because it so accurately reflected the expectations of clients and payers about what law firms should be doing. The interviewees were David Perla and Sanjay Kamlani, co-founders of Pangea3, acquired by Thomson Reuters in 2010.
One specific comment that caught my attention was this: “So, whether it is artificial intelligence or other items that drive efficiency, there is an expectation from clients of law firms that those technologies are implemented to achieve better results.” I think that is a particularly astute observation and it mirrors what I hear at conferences and from client-side executives who tell me about the billing challenges they face with their law firms.
Put in simple language that relates specifically to law firm invoicing, clients might phrase the questions to law firms this way:
- We use e-billing technology to ensure accurate invoices, so why aren’t you? Or…
- We’ve been using software for 10 years now to get bills right — why don’t you? Or…
- Why aren’t you using technologies that help you be more compliant with what we want?
These may not be unreasonable questions. They are certainly not unreasonable under the broader mantra of “the client is always right.” But even on an equal playing field it seems reasonable for clients to ask these basic questions. A more direct and cynical client might even say (and perhaps they are), “For all these years you’ve not been able to get it right and we (clients) have been forced to pick up the ball and to pay for the technology to get it right.”
If you doubt that payers and clients would prefer that firms get it “right” before they have to, consider this. I recently shared the focus of what we do (helping firms create more accurate invoices) with the head of litigation for a large ($100MM plus in legal fee spend) organization. He was totally on board with how our customers (some of his law firms) are using our software and expertise to get it right. Knowing which firms have that focus elevated their reputation in his eyes. It immediately told him that those firms care about what is important to him – billing guideline compliance and invoicing accuracy.
Are those three questions above difficult questions for law firms to answer? For some, absolutely. To be clear, some of the reluctance to use such tools might be philosophical. I know many attorneys who resent the idea, the concept itself, of software performing their pre-bill analysis. (Though I know of many more attorneys who absolutely hate the pre-bill review process and the time it takes).
For others though, it may simply be a lack of awareness about what tools exist to help. After all, no one knows better than law firm leaders how inundated they are with offers to “make things better.” There is certainly no lack of offers on the table to “fix” the myriad of challenges law firms face. It can be hard to sort the wheat from the chaff and identify what really makes sense and where to invest.
To that end though, Perla and Kamlani have strong words of advice: “… law firms are inundated with tools and with requests to try things, but what they really need are tools that are obvious in their application and help lawyers do what they do better. The value proposition should be either cheaper, better or faster.” [Emphasis added]
When we surveyed more than 50 managing general partners about their challenges with invoicing and invoicing preparation, they shared their frustrations in great detail. Not only are they frustrated at client reactions to their invoices, but they recognize how the pre-bill process takes attorneys away from doing what attorneys should be doing – practicing law. In short, there is widespread recognition that the bill preparation process is slow, inefficient and often inaccurate (at least in the eyes of clients receiving the bills).
Those frustrations at firms are as valid today as when we conducted the Study. And what could be more obvious than software to help validate billing guidelines, make the process more efficient, and get invoices out the door faster? (Taylor: does this sentence read right after the change?)
I’ll conclude with a quick reminder that the smart technology that we offer to law firms isn’t always technology that replaces humans. It is technology (a form of intelligence, really) that makes humans smarter and perform better.
Remember though, with these new kinds of tools comes the requirement to evaluate the skills of those who will use them. We all know that putting sophisticated “power tools” tools in the wrong hands can lead to accidents (figuratively and literally); however, in the right hands, expert hands, in the hands of people who know precisely how to use such tools, the benefits of such an investment can be maximized, achieving exactly the objectives that Perla and Kamlani are speaking about.
What do you think?
InvoicePrep enhances law firm profitability by improving e-billing quality and accuracy. When invoices are prepared properly, payment is more prompt and the number of denied charges decreases. InvoicePrep’s system is streamlined, efficient and uses a combination of cutting-edge technology and professionals with extensive legal invoice compliance and e-billing software knowledge. To learn more about InvoicePrep, please visit www.invoiceprep.com.