The legal profession is inundated with redundant tasks that detract from efficiently using resources and ultimately generating revenue. Time entries, invoice review and approval, management of subordinate lawyers, and even legal research can all be improved with automation.
Approximately 23 percent of an attorney's activities and 69 percent of a paralegals activities could be automated using current technologies, according to McKinsey Global Institute. These tasks can be automated, allowing for attorneys and paralegals to focus on more value-adding activities such as client satisfaction and marketing.
The COVID pandemic has shown all of us the power of technology in solving challenges including the legal field from how to work from home to helping clients through secure platforms and applications. Its time for the legal profession to further embrace and implement automation to better capture time and money.
The Current State of Billing Practices
Law firms have seen a steady decline of collection and realization rates. There are several overarching reasons for this decline: more cost-conscious clients, increases in hourly rates, and administrative inefficiencies.
Since the 2008 financial crisis, clients have been exceedingly mindful of expenses, looking closely at their legal expenses. The COVID pandemic and related economic downturn has reversed any relaxation of that financial vigilance with many financial leaders expecting double-digit revenue declines. And according to Clios 2019 Legal Trend Report, 14 percent of all hours invoiced are never even paid.
Some firms may look to combat this reduction in revenues by raising hourly rates. However, according to a Georgetown Law Report, rate increases actually lead clients to pay less of the hours billed at the higher rate. While firms that adopt this practice expect an increase in revenues, they actual see realization rates decline which precludes rate increases as a viable solution. Furthermore, attempting to convince clients to pay more for what they previously paid less for is a difficult ask and can leave the firm in an unfavorable light.
Even before considering client financial prudence and reluctance to pay higher rates, law firms have an ethical obligation requiring lawyers to ensure their bills are reasonable. Attorneys must exercise billing judgment, and make a good-faith effort" to exclude charges and expenses that are excessive, redundant, or otherwise unnecessary."
Improving Internal Inefficiencies
What law firms really need to do is look internally at inefficiencies and how they affect revenues to solve the root problem.
Non-billable tasks, late invoicing, and poor time-tracking are all issues that negatively affect a law practice. In fact, the advisory podcastThe Un-Billable Hourpoints to these as major causes of lost revenue. According to the recent State of Legal Markets from Georgetown Law, collection and realization rates contribute to the overall trend of decreased revenues at large firms.
For smaller firms, the ClioLegal Trends Reportestimates that out of a standard eight-hour workday, firms are only averaging about 1.5 hours of billable work. Thats six hours or more of unbillable work every day, or 30 hours every week. With over six hours of unbillable time, the most obvious place to start is by looking inward at how legal professionals spend their time and how to do things more efficiently.
Much of this wasted time is spent on billing and billing review - the time it takes for lawyers to review their bills for errors before submitting invoices for payment. Just tracking time can take lawyers extra efforts that could be spent on more complex and billable activities.
Additionally, tracking time is not a favorable task with many lawyers considering it a necessary evil. This task is often put off until the weekend, where lawyers spend valuable time meant to relax or be with family instead consumed with recalling and tracking their tasks from the week prior.
Furthermore, lawyers who wait to enter their time can lose up to 50 percent of their billable hours through this practice. If done throughout the week time tracking can consume easily 30 minutes each day. These percentages and minutes add up, leaving considerable amounts of money on the table.
Time-consuming billing review is done not only to ensure that clients receive accurate bills and not dispute unreasonable fees, but to comply with the ABA Model Rules requiring lawyers to ensure their bills are reasonable. Attorneys must exercise billing judgment, and make a good-faith effort" to exclude charges and expenses that are excessive, redundant, or otherwise unnecessary."
Yet, a majority of law firms say that it takes them up to two weeks to clean up their invoices before they are even ready to be sent to clients, according to a 2019 Aderant survey. This necessary step of the invoicing process calls for efficiency and automation.
In fact, the law firm consulting firm, Major, Lindsey and Africa suggest in their recent Industry Outlook report bolstering productivity and efficiency via the expanded use of technological solutions. This would allow for more time to be spent on billable tasks, thereby increasing profits.
Electronic Billing Can Be Both Boon and a Bane
As billing is necessary for a firms viability and requires arduous attention and precision, having an automated system to accurately and efficiently handle this task in less time with fewer errors would be worth its weight in gold. These effects are amplified by clients who require the use of electronic invoice submissions, most often using UTBMS codes in LEDES formatted invoices.
While UTBMS and LEDES codes add another level of complexity to billing, their use makes the organization and categorization of tasks and expenses standard across all legal billing. This in turn creates greater transparency for the client when reviewing their bills.
However, this can be a huge burden for those creating the invoices. Manually coding every time or expense entry with UTBMS and LEDES codes can take precious time and is open to human errors and idiosyncrasies in coding and billing rule compliance. If the result is errors in client invoices, clients frequently will not pay non-compliance bills and charges.
Automation Enhances and Advances Law Firms
LexisNexis CounselLinks Director of Strategic Consulting Kris Satkunas aptly states: Legal departments should leverage the right technologies to refine and adjust workflow processes. And when it comes to billing and billing review, automation is the answer for law firms looking to improve efficiencies and profits.
According to Thomson Reuters Legal Management Trends, it is possible to speed up billing without sacrificing accuracy using automation. In fact, automation increases speed and decreases errors, which reduces billing disputes and improves realization rates.
Furthermore, applications currently exist that can helprelieve the burden of manual UTBMS code selection and LEDES formatting. Some of them can even interface with a firms existing billing software systems making for seamless integration and adoption.
Not only can billing be streamlined to become more efficient, but other administrative tasks. Law Technology Today provides a list of features and administrative tasks to consider when sourcing an application to improve efficiencies including:
Time and expense entries
Client intake processing
Invoice format conversions
Increasing efficiencies and accuracy is not only good for law firms, but the clients. Quick and reliable work and transparent invoicing makes for satisfied clients, which in turn, is more likely to bring future work and referrals.
The impulsive reaction to declining revenues and optimization rates of raising rates is not the answer. The answer is automation. Many law firms are already taking advantage of this modern approach; dont get left behind.
Read more here:
- Oil & Gas Pipeline and Transportation Automation Market in Industrial Machinery Industry to grow by $ 742.43 million| Emerging Trends, Company... - July 12th, 2021
- Labor shortage will lead to more automation, & responsible teens - New Jersey 101.5 FM - July 12th, 2021
- System Integration Services Market for Industrial Automation in India to reach USD 420.53 million| Discover Company Insights in Technavio - KPVI News... - July 12th, 2021
- Exclusive: TikTok introducing more automation to video removals - Axios - July 12th, 2021
- The Rise of Automation in Analytical Science - Technology Networks - July 12th, 2021
- Innovation Institute incubator to co-develop automation tools with Olive - Modern Healthcare - July 12th, 2021
- Worldwide Industrial Automation Industry to 2027 - Growing Number of SMEs Presents Opportunities - PRNewswire - July 12th, 2021
- Robotic Process Automation Sweeps Across the Healthcare Industry - Electronic Design - July 12th, 2021
- Everyone's Talking Automation: What does HR Software Really Do? - State-Journal.com - July 12th, 2021
- The pandemic has brought more automation, which could have long-term impacts for workers. - The New York Times - July 12th, 2021
- Shanghai Targets 47 Million TEU Annually Through Growth and Automation - The Maritime Executive - July 12th, 2021
- Restaurants are starting to hire robots instead of people who are demanding higher pay - Business Insider - July 12th, 2021
- Provider-owned Innovation Lab partners with Olive to build automation tools - MedCity News - July 12th, 2021
- The lab automation market is expected to grow at a CAGR of 8.53% during 2021-2026 - GlobeNewswire - July 12th, 2021
- Real estate is a people business, but automation can help - HousingWire - July 12th, 2021
- Home Automation For Fans Of Quick-and-Dirty Solutions - Hackaday - July 12th, 2021
- Remote Access in the Continuous Processing Industry Take Five with Automation World - Automation World - July 12th, 2021
- Banking CFOs need to step up efforts in ESG, automation and crypto support - Accenture study - IT Brief Australia - July 12th, 2021
- Automation Market in Textile Industry: Forecast of Healthy YoY Growth Rate at 1.20% - PRNewswire - July 12th, 2021
- Insights on the Industrial Automation Global Market to 2027 - Featuring ABB, Siemens and Schneider Electric Among Others - Yahoo Finance - July 12th, 2021
- OMD Sees Campaign Results Skyrocket by Using IAS Automated Tag with Google - Yahoo Finance - July 12th, 2021
- Adding Automation to PRNT's 3D Printing Thesis - ETF Trends - July 12th, 2021
- WISeKey combats cybercrime with HIRO Cybersecurity Knowledge Automation, the first ever integrated cybersecurity automation solution which uses... - July 12th, 2021
- Restaurant owner: Automated drive-thrus trump $15 wages for business - Business Insider - July 12th, 2021
- Introducing FlexRule X, the Next Generation of End-to-End Decision Automation Platform: Ready for Early Access - PRNewswire - July 12th, 2021
- Network Automation Market to Hit USD 22.58 Billion by 2027 Backed by Increasing Adoption of Connected Devices Worldwide, reports Fortune Business... - July 12th, 2021
- Building Competitive Advantage With Automation - Broadband Communities - April 5th, 2021
- What Do We Mean by Automation? - Forbes - April 5th, 2021
- NG automation to catapult productivity and profitability with edge computing - FutureIoT - April 5th, 2021
- How automating and streamlining can provide a treasure trove of data - Smart Business Network - April 5th, 2021
- Addressing great need for automation of composites - Advanced Manufacturing - April 5th, 2021
- NASAs small business picks take on automation in space - TechCrunch - April 5th, 2021
- Cockpit automation leading to airline industry complacency - Airline Ratings - April 5th, 2021
- HAL in Permian Automation Breakthrough and More - Rigzone News - April 5th, 2021
- Worldwide Robotic Process Automation Industry (2021 to 2026) - Featuring Automation Anywhere, NICE and Blue Prism Among Others -... - April 5th, 2021
- Deloitte and UiPath Team on Intelligent Automation Solutions Built for the Oracle ERP Platform - PRNewswire - April 5th, 2021
- The benefits of hyper-automation for banking - Finextra - Finextra - April 5th, 2021
- Test automation tools: 8 trends and techniques to watch - TechBeacon - April 5th, 2021
- CrowdStrike Releases 2021 Cybersecurity Global Threat Report - Automation World - April 5th, 2021
- Is the Future of Manufacturing Automated or Autonomous? - Entrepreneur - April 5th, 2021
- Diving Into the Boost for Automation in the Claims and Appraisal Process - glassBYTEs - April 5th, 2021
- How does your company help customers with their automated testing initiatives? - SDTimes.com - April 5th, 2021
- 78% of IT Leaders Plan to Increase Spending on Automation Initiatives Post-Pandemic - Business Wire - April 5th, 2021
- As Automation Expands in the Nordic Region, Look to 'GXF' - ETF Trends - April 5th, 2021
- Rockwell Automation Stock Appears To Be Significantly Overvalued - Yahoo Finance - April 5th, 2021
- Klaviyo Unveils New Marketing Automation Innovations with Personalized Benchmarks Tool and Conversational SMS - Business Wire - April 5th, 2021
- Save Time & Money With Automated Password Resets - Security Boulevard - April 5th, 2021
- Global Building Automation and Controls Market (2020 to 2027) - Opportunity Analysis and Industry Forecasts - ResearchAndMarkets.com - Business Wire - April 5th, 2021
- Strategy Analytics: Automation, IoT, Cloud and 5G Accelerate the Growth of Unified Endpoint Security Adoption - Business Wire - April 5th, 2021
- Latest innovative report on Robotic Process Automation in Finance Market by 2026 with top key players like WorkFusion, Automation Anywhere, Blue... - April 5th, 2021
- DIY Home Automation Market Research Report 2021 | Industry Analysis, Share, Growth, Trend and Top Key Players KSU | The Sentinel Newspaper - KSU |... - April 5th, 2021
- Making It Work: Automation firm stays sharp with robotics for use in pharma industry - Business Post - April 5th, 2021
- The Evolution of Automation Technologies - Security Boulevard - February 17th, 2021
- Automation in the Age of COVID-19 - Advanced Manufacturing - February 17th, 2021
- Analysts need advanced automation tools to reduce fear of missing incidents - Help Net Security - Help Net Security - February 17th, 2021
- Salesforce: Combining AI and automation can give us superpowers and make us more productive - ZDNet - February 17th, 2021
- Notable Health seeks to improve COVID-19 vaccine administration through intelligent automation - TechCrunch - February 17th, 2021
- 3 Ways Intelligent Process Automation (IPA) is Knocking at the Doors of the Recruitment World - BBN Times - February 17th, 2021
- Automation in Retail to scale new heights and pave way for dynamism - Latest Digital Transformation Trends | Cloud News - Wire19 - February 17th, 2021
- How to automate while maintaining security and compliance | SC Media - SC Magazine - February 17th, 2021
- 3D-Printing Is Speeding Up the Automation of Construction - Metropolis - Metropolis Magazine - February 17th, 2021
- The 58th Design Automation Conference Has Been Rescheduled for December 2021 - Business Wire - February 17th, 2021
- Explosion Proof Equipment in Automation and Control Systems Market In Depth Research Report 2021-2026 by Regional Analysis and Key Players Profiles |... - February 17th, 2021
- Verizon targets robot automation with Incubed IT deal - Mobile World Live - February 17th, 2021
- OPEX Corporation Unveils New Branding to Highlight Automation Technology Innovation - IT News Online - February 17th, 2021
- Lab Automation Workcells Market Overview By Trends, Industry Top Manufactures, Size, Industry Growth Analysis & Forecast Till 2026 KSU | The... - February 17th, 2021
- ActiveCampaign furthers commitment to customer success by bringing together 500+ automation recipes with 125+ new email design templates - PRNewswire - February 17th, 2021
- Leading Demand Generation Company Switches to TEB Business Automation from Salesforce - IT News Online - February 17th, 2021
- Building Automation System Market 2021 Industry Outlook, Comprehensive Insights, Growth and Forecast 2026 KSU | The Sentinel Newspaper - KSU | The... - February 17th, 2021
- Industry Insights: The future of camera control and automation - NewscastStudio - February 17th, 2021
- Best Research Report on Global Industrial Wireless Automation Market with New Business Opportunities by Forecast to 2027 | Siemens, Honeywell... - February 17th, 2021
- More automated traffic enforcement could come to Arlington in the name of social justice - FOX 5 DC - February 17th, 2021
- Harting hosts industrial automation webinar series - Foodprocessing - February 17th, 2021
- Salesforce offers intelligent document automation in conjunction with AWS tool - Healthcare IT News - February 17th, 2021
- Automation Wont Take All The Manufacturing Jobs And Covid Proves It. Heres How - Forbes - February 4th, 2021
- CAQH 2020 Index: Automating Healthcare Administrative Transactions Has Reduced Annual Costs by $122 Billion, $16.3 Billion More Can Be Saved Through... - February 4th, 2021
- Nigeria: Munich Re bets on automation to strengthen the insurance market - The Africa Report - February 4th, 2021
- Digitalization and Manufacturing Automation to Drive the High-performance Plastics Market to $2 Billion by 2027 - PR Newswire India - February 4th, 2021
- Research shows that automation can make recruitment more human - PRNewswire - February 4th, 2021
- Helsinki accelerates AI and automation in city services - Cities Today - February 4th, 2021