![]() Although budget and accrual submissions are not tied to a firm's financial year, they require additional time to submit and update at the different vendor sites. This translates to about 24 hours of fee earner updates annually. Our Law has about 4.5 invoices per matter (which is the legal average), or 65 matters that require updating. Some larger firms may invest several weeks in updating fee earners and rates in the beginning of a new financial year, depending on the complexity. Such tasks include the time and effort needed to update fee earners and rates, and to submit budgets and accruals. Many firms overlook the fact that, on top of the e-billing activity itself, a number of matter management tasks need to be done to support the e-billing effort. All of this time translates to $35,550 per month, or $426,600 a year. However, those two hours still cost Our Law $600 per month of billable time per lawyer, plus some additional e-biller time to resolve these billing issues. ![]() The hypothetical Our Law is a bit more proficient, with its lawyers only spending two hours a month to straighten out the 90 rejected e-bills. One larger Midwestern law firm, for instance, determined that their lawyers were spending an average of three hours a month dealing with such invoices. Both of these activities take time, which translates to money. To address a rejected e-bill, a firm must first identify the problem and then resubmit an invoice. A number of factors contribute to these sky-high rates, including: Industry-wide, rejection rates for e-billing are around 30%, which, for Our Law, means 90 out of the 300 monthly e-bills are rejected and must be addressed. The area of rejections and appeals is the biggest hidden cost of all-something that many firms are just now beginning to recognize. Having a single dedicated e-biller also has its risks: vacation or other leave can directly impact the firm's ability to bill and can lead to delays and write-offs, which can lead to increased costs. Additionally, while legal secretaries may be more familiar with client billing guidelines than a dedicated e-biller, they would be less familiar with the various vendor sites and their requirements, leading to submission and tracking inefficiencies A cautionary note At an average of just under $27.00 per hour per secretary, those hours translate to a total cost of $55,260 per year, which is 10% more than the cost of a dedicated e-biller. At a 5:1 ratio of lawyers to legal secretaries, which is about the norm for legal firms, 10 legal secretaries need to commit a minimum of 4 hours per week to e-billing. ![]() For example, consider the hidden costs of using legal secretaries to perform e-billing. While many mixed-mode billers are capable of handling both paper billing and e-billing, splitting workloads and context switching can lead to as much as a 40% reduction in productivity. After factoring in the cost of benefits-paid vacation, health plan, and so on-the cost to the firm of this staffer is about $50,000. A dedicated e-biller in a mid-sized firm would pull down an average salary of $38,000. In this scenario, Our Law has hired an e-biller who is 15% more productive than average and able to handle the 300 invoices Our Law generates per month. On average, an e-biller can generate, submit, and track 260 invoices per month. ![]() Let's look at the figures, starting with the cost of a dedicated e-biller. Distributing the billing workload by, for instance, having billers do both paper bills and e-bills or having legal secretaries submit invoices, tends to reduce billing productivity and compliance. However, consolidating the activity is far more cost efficient. Some firms distribute the job of e-billing to a team or parcel it out to a diverse staff. ![]()
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