Ron Friedmann consistently writes some of the best analysis of legal tech and law practice issues that you will find. His latest gem is called “E-Billing Ignores the Elephant in the Room.”
The money quote:
“E-billing may save on administrative costs but misses the main point. Now watch out – here comes a mixed and mangled metaphor – e-billing is really just the elephant�s dung heap. Push around the dung, position it more neatly, maybe even pick a bit off the pile, and presto, the problem is gone. But it�s not; the elephant remains with an unending new supply.
To really lower costs, focus on how the dung gets there. Put that elephant on a diet by making lawyers work more efficiently and effectively.”
Ron refers to a white paper for LawNet on e-billing. He says, “The white paper shows that e-billing adds costs and creates hassles for law firms. I have yet to see empirical evidence that client savings from e-billing exceed the extra costs incurred by firms. (The economist in me suspects that e-billing may add to rather than save total system cost.)”
I have to disagree with Ron a bit on this one. It depends on your definition of e-billing. Many solos and small firms have moved to electronic billing approaches, which have the dual benefit of getting information to clients in a manner that can process quickly (if they choose) and gets the lawyers paid more quickly and easily.
In a more traditional large firm setting, I can see where there would be an argument that e-billing creates hassles for law firms. If I were a client, my reaction would be: “So what? I’m supposed to pay more or process bills more inefficiently because of your crappy billing and accounting systems? I don’t think that makes any sense.”
However, I don’t want to quibble with Ron. I strongly agree with his conclusion:
“So if clients are not going to analyze e-billing data, then why not just start with how lawyers work? Why not examine the actual means of practice rather than the small – or not so small heaps – that billing leaves behind?
Where are the bold GCs willing to talk about the elephant and take it head-on?” [emphasis added]
For an excellent view of current attitudes of corporate counsel toward outside law firms, check out the recent ABA Journal article “The Outside Looking In.” One of my favorite co-presenters I’ve ever shared a podium with is Jeff Carr, who is quoted in this article. Believe me, he is one of the bold GCs and one of the true innovators in new ways to pay for legal services. He definitely talks about the elephants.