Comprehensive legal billing guidelines can help organizations achieve better budget predictability and support collaboration with outside counsel.
In this article, Elizabeth Gonzalez, Director, Operations, at Northwell Health, discusses how her organization created a more efficient legal billing process.
Q: What was the issue at hand? Was this something that has been a persistent issue, or something new that came up?
Our legal bills were a chaotic jumble of questionable charges. Beyond vague descriptions like "Legal Services Rendered" and "Case Review," we constantly battled inflated overhead and administrative fees.
We were paying for "office supplies," "postage," and other nebulous expenses without a clear breakdown or justification. Deciphering the actual cost of legal services felt like cracking an ancient, cryptic code.
This wasn't a new issue; it was a deeply ingrained habit of fiscal obscurity, a legacy of unchecked spending we were determined to overturn. We were tired of being nickel-and-dimed for overhead, and we knew this Wild West of legal billing had to be tamed.
Q: How did you approach a solution?
The first step when you are a lean Legal Ops team of one is to create a subcommittee. Enlisting paralegal and attorney support was the best way to kick off the project. We knew we needed to communicate our expectations to the firm clearly and consistently to rein in those invoices.
Our strategy was a blend of research, collaboration, clear communication, and a touch of technological intervention:
- CLO Buy-in: Before starting the process, I sat down with the CLO and reviewed the goals for the guidelines. After approval from the top, we knew training and enforcement would be a battle we could fight and win.
- Benchmarking Best Practices: We researched other companies' billing guidelines and reached out to our insurer to review their litigation guidelines for inspiration (they are always a super strict place to start).
- Crafting Comprehensive Guidelines: We developed clear, concise guidelines that addressed everything from acceptable hourly rates and staffing to specific billing practices. We banned block billing, limited administrative charges, created specific guidelines for staffing and travel, and required detailed descriptions of work performed. We included non-billing-related guidelines to cut down time on managing invoice compliance.
- Timekeeper Submission: We specified the format for submitting timekeeper information, including required details like experience level, practice area, and a unique identifier for each timekeeper. This streamlined tracking and analysis of staffing efficiency.
- Diversity Metrics: Reflecting our commitment to diversity and inclusion, we incorporated requirements for reporting on the diversity of the legal teams staffed on our matters. This provided valuable data for tracking progress and holding our outside counsel accountable.
- Invoice Submission Requirements: We established clear guidelines for invoice submission, including format, required supporting documentation, and deadlines. This eliminated ambiguity and ensured timely processing.
- Communication and Training: We rolled out the new guidelines with comprehensive documentation to the firms and created a training plan for internal staff. We wanted to ensure everyone understood the new expectations and how to comply. We equipped staff with a one-page ‘cheat sheet’ document for invoice review.
- Embracing Technology: We implemented automatic rejections where we could and flagged expenses over $250 for attorney review. We used reporting features to show savings on expenses we would no longer pay for.
Q: Who was your biggest supporter within the organization? Did you make any converts to using Legal Ops more effectively?
Our CFO was our champion. He recognized the need for greater financial control over legal spend and advocated for the project. The initiative definitely highlighted the value of Legal Ops. While some attorneys initially resisted the changes, they came around once they saw the positive impact on budgeting and predictability.
Q: What surprised you the most?
The relatively smooth cooperation from our outside counsel firms was a pleasant surprise. We anticipated some resistance, but most were receptive to the guidelines and willing to work with us. They appreciated the clarity and the opportunity for a more structured billing process.
Q: How has this changed the way your company works?
Implementing billing guidelines has transformed how we manage outside counsel. We now have greater budget predictability, more control over legal spend, and a more collaborative relationship with our outside counsel firms.
Q: In hindsight, would you do anything differently?
The most significant thing would be to implement the guidelines sooner. While we dedicated significant time to refining the document, getting it into action quickly would have been more impactful.
Every month of delay represented continued exposure to unnecessary costs, from inflated overhead to inefficient staffing. By implementing these guidelines sooner and equipping our team with the right training, we could have tamed the Wild West of inefficiency much earlier.
While the frontier is now more manageable, this experience serves as a reminder that decisive action is often the key to reclaiming control and maximizing impact.