Automating Law Practice: How Automated Legal Billing Can Improve Law Firm Profits | TimeSolv

Automating Law Practice: How Automated Legal Billing Can Improve Law Firm Profits

Written by Erika Winston

11 min read

Note: This post has been updated on 29th of December, if you are a returning reader use this link to jump on the extension of the post.

Technology has brought the benefits of automation to the legal profession. Digital billing and practice management systems have become commonly used in law firms around the world, helping to make billing more efficient and accurate.   

With improvements to machine learning and legal artificial intelligence, legal billing systems can be personalized to meet the individual needs of each law firm. By utilizing these legal tech innovations, law firms can dramatically increase their profitability, and here’s why. 

Automated Solutions

Manual time tracking is time-consuming and prone to human error. It is often a slow process that frustrates firm members and wastes valuable time. When these errors appear in invoicesclients may hesitate to pay them, initiate a billing dispute, or reject them altogether.  

Artificial intelligence capabilities and innovative machine learning applications can provide a viable solution to these problems. These tech advances automate billing processes for greater accuracy and efficiency. 

An artificial intelligence application provides an objective outlook on the likelihood of client bill payment. Using the firm’s own data, the application can be programmed to automatically alert timekeepers when they spend too much time on a task and whether or not the client is likely to pay for that billable timeWith real-time notifications, timekeepers can make immediate adjustments, which can lead to greater profitability.  

Billing Process Bottlenecks

Automated billing systems also help law firms efficiently identify shortcomings within their billing process. Errors and inaccuracies can prove detrimental to legal practice, particularly when it comes to billing mistakes. Clients expect accuracy and consistency from law firm invoicing. Law firms must meet this expectation if they want to maximize their potential profits.  

Fast and accurate billing leads to fast and complete compensation. Automated billing makes it easier for law firms to accomplish this goal by identifying possible points of contention before they cause a client billing dispute.  

Time spent on the billing process is time not spent on billable tasks for clients. The invoicing process can be long and tedious. Streamlining it frees up valuable time for attorneys and staff members to work on more profitable tasks.  

Convoluted billing procedures reduce efficiency and lead to late invoicing. Late invoicing leads to late client payments and more hours spent chasing overdue payments instead of working on billable tasks. It’s an unprofitable cycle, but it can be broken with billing automation that addresses process bottlenecks.  

Bill Review

While billing systems may offer features for automated billing entrymost fail to address the process of invoice review. Bill review involves going over invoices, identifying errors, and cleaning them up before they are sent to clients.   

Artificial Intelligenceassisted billing programs learn from a law firm’s billing data. It then uses this information to confirm that invoice entries are in line with set budgets and time entriesThese applications can also point out billing irregularities that fall outside of the budgets and billing parameters set for a particular matter.   

Most importantly, these technologies alert timekeepers and firm managers to these potential issues before final invoices are generated. So, they have an opportunity for correction before inaccurate billing affects firm profits.  

Automated Payment Options

Chasing overdue invoices is unpleasant and time-consuming. With automated legal billing options, law firms can set up prescheduled payment reminders to notify clients with overdue accounts. These reminders only need to be programmed once, saving valuable time and money.  

Online payment options also help to automate the billing process and promote greater profitability.  Clients are more willing to pay firm invoices quickly when provided with easy and convenient payment methods. A client portal automates the payment process by providing a quick way to review work completed on a case and make payments to an account.  

Automated UTBMS/LEDES Coding

The Legal Electronic Data Exchange Standard Oversight Committee (LOC) created a standardized legal billing system that would effectively categorize legal tasks and translates them into invoices. UTMBS or “LEDES” codes are standard among certain types of legal clients and the right automated billing software can simplify the implementation of these codes. 

From their inception, one drawback to the application of UTMBS/LEDES codes has been the need for lawyers and firm staff to search for and choose the correct code for each entry. This manual process is inefficient and prone to human error.  

Incorrect coding can cause clients to reject invoices, which reduces collection rates and hurts profitability. Further complicating matters, firms have to spend even more nonbillable time correcting mistakes and resubmitting invoices.   

The right legal billing application alleviates this problem by automatically assigning the correct codes to the tasks or expenses. These applications intuitively assign the right code using the law firm’s own data and machine learning to adjust to any necessary changes.  

With these technical advances, lawyers no longer have to waste time looking up billing codes and correcting rejected invoices. They can rely on billing automation to save them time while increasing profits.  

Law Firm Billing Automation Promotes Profitability

Technology has spread quickly throughout the legal industryAdvanced automation and Artificial Intelligence resources will undoubtedly become standard industry tools in the coming years. The benefits aren’t hard to see. These innovations give law firms more time to work on billable tasks and lessen the occurrences of rejected invoices. This all works together to improve collections and drive up profits.

Updated on November 25

The Benefits of Automated Legal Billing as it Pertains to Law Firm Profits

In recent years, the world of technology has become increasingly integrated into the world of practicing law. Law firms around the world have adopted practice management systems and digital platforms designed to streamline the numerous tasks of running a successful legal practice. Invoicing is one of those necessary tasks. The introduction of automation has helped law firms craft more efficient and accurate billing processes.

Today, legal billing systems can be customized to fit the needs of individual law firms thanks to improvements in machine learning and legal artificial intelligence. With these expanding technologies, law firms can address procedural challenges, improve efficiency, and potentially increase revenue. Here’s how:

Providing Viable Solutions

Billing is often one of the biggest challenges facing law firms. There are numerous reasons why, including inadequate time tracking, convoluted invoicing procedures, and the unwillingness of clients to pay their bills. Artificial intelligence capabilities and innovative machine learning applications can provide viable solutions to these problems with tech advances that automate billing processes for greater efficiency and quicker client payments.

The most innovative legal billing software options include artificial intelligence applications that provide objective outlooks on the likelihood of client bill payment. Using existing firm data, the application can be programmed to automatically alert timekeepers when they spend too much time on a task, along with whether or not the client is likely to pay for that billable time. Real-time notifications allow timekeepers to make immediate adjustments, effectively avoiding client conflicts while potentially leading to greater profitability. With artificial intelligence capabilities and innovative machine learning, lawyers can benefit from assistance that is tailored to the specific needs of their firms.

Billing process Bottlenecks

Constant errors, inaccuracies, and billing mistakes can prove detrimental to the success of a law firm. Clients expect the bills they receive to be correct and consistent. Promoting client satisfaction and maximizing earning potential requires law firms to meet these expectations. When billing discrepancies happen on a regular basis, it may indicate a problem within the law firm’s time tracking and billing processes.

With the assistance of an automated billing system, law firms can identify shortcomings within their invoicing processes. After all, time spent dealing with client billing disputes is time not spent on billable client tasks. Automation helps law firms spend more time making money rather than trying to collect it.

Quick and complete compensation results from quick and clear-cut billing. Poor billing practices turn into late invoices and decreased productivity. This in turn creates a cycle of late payments and excess hours spent collecting overdue accounts. It’s an unprofitable cycle that can be broken with billing automation that addresses process bottlenecks.

Bill Review

Many billing systems, although equipped with features for automated billing entry, neglect to address the valuable process of invoice review. This is where bills are automatically analyzed for the identification and correction of discrepancies before they reach clients. How is this possible?

Artificial Intelligence-assisted billing programs learn from a law firm’s billing data. They can then confirm that invoice entries are in line with established budgets and billing parameters set for particular matters. Billing irregularities that fall outside of these established limits are flagged. Prior to the release of finalized invoices, appropriate firm members receive automated alerts about the potential billing discrepancies, which creates a valuable opportunity for correction.

Automated Payment Options

Automating the payment options available to clients can be extremely efficient and profitable for law firms. Chasing overdue invoices is typically a time consuming and frustrating task, but automation can be of great assistance. Once programmed, the right billing program will automatically send payment reminders to clients with overdue accounts, saving the firm both time and money.

Additionally, online payment options promote more timely and complete client payments. By providing quick and easy payment options, firms encourage clients to make on-time payments. This goal can be further met with client portals. By logging into their personal account, clients can independently review casework, see invoices, and make e-payments right through the portal.

Automated payment options should also include the ability to store payment methods that can be automatically run for law firm invoice payments on predetermined dates of the month. These features lessen the collection tasks that law firms must take on while also helping firms reach higher collection rates.

Automated UTBMS/LEDES Coding

Incorrect coding can lead to clients rejecting invoices altogether which directly affects profitability and collection rates negatively. Firms then have to spend unbillable time correcting invoices and resending them, further complicating and prolonging the process.

The Legal Electronic Data Exchange Standard Oversight Committee (LOC) created a standardized legal billing system that would effectively categorize legal tasks and translates them into invoices. UTMBS or “LEDES” codes are standard among certain types of legal clients and the right automated billing software can simplify the implementation of these codes.

A drawback to the use of UTMBS/LEDES codes has been the need for lawyers and firm staff to search for and choose the correct code for each entry. This manual process is inefficient and prone to human error, but this problem can be avoided entirety with the right legal billing system. Using law firm data and machine-learning, the correct codes are automatically assigned to their proper tasks and expenses. These technical advances give the lawyer back the time that was being used to look up billing codes and correct reflected invoices.

Law Firm Billing Automation Promotes Profitability

The legal industry has been permeated with the influence of technology. Advanced automation and artificial intelligence are increasingly becoming standard tools for efficient and accurate legal invoicing. The benefits aren’t hard to see. These innovations give law firms more time to work on billable tasks and lessen the occurrences of rejected invoices. This all works together to improve collections and drive up profits.

TimeSolv legal billing software offers various automation features to help law firms increase profitability and work more efficiently. To learn about all that TimeSolv has to offer, click here for a free 30-day trial.  

About Erika Winston:

Erika Winston is a freelance writer with a passion for law. Through her business, Personal Touch Edits, she helps legal professionals deliver effective written messages. Erika is a regular contributor to TimeSolv and a variety of other publications.

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