Automating Law Practice: How Automated Legal Billing Can Improve Law Firm Profits
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 invoices, clients 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 time. With 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 entry, most 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 Intelligence–assisted 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 entries. These 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 industry. Advanced 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.
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.
