Prebill management for lawyers: Reduce billing errors and strengthen compliance with outside counsel guidelines using automated proforma processes

At law firms that still rely on internally developed, under-integrated, or partially automated prebill management processes, lawyers often struggle to manage high volumes of proforma bills and adhere to complex outside counsel guidelines (OCGs) that mandate matter-specific terms for time tracking and billing. Without automated proforma processes and tools, these lawyers lack the visibility and safeguards required to effectively manage the financial and compliance aspects of their matters.

Noncompliant billing entries can have a number of causes: A lawyer might submit a time entry categorized as research, but the client’s OCGs prohibit billing for this activity. A lawyer who isn’t authorized to work on a matter might accidentally log a time entry using the wrong matter code. Or perhaps a lawyer charges for photocopies when the client’s terms specify that they won’t pay for this service.

When a client rejects a noncompliant invoice, firm partners commonly offer billing concessions to try to secure at least partial payment and protect the relationship. These costly missteps and write-downs lead to revenue leakage, extended work-to-cash cycles, frustrated lawyers, and dissatisfied clients.

Meeting client expectations for billing efficacy

Billing errors associated with noncompliant time entries create serious headaches for lawyers and clients alike.

As OCGs become increasingly complex, firms lacking automated proforma processes risk making preventable mistakes and compromising client satisfaction. Even if a firm’s lawyers provide excellent service and deliver favorable outcomes, a pattern of billing problems can still cause a client to lose trust and tire of the hassle with a legal service provider that can’t deliver an accurate bill in a timely fashion.

Persistent billing issues also create operational drag within the client organization. Contesting inaccurate bills, dealing with off-cycle submissions, and negotiating discounts take up staff time and focus. If a firm’s billing problems overtax the client’s administrative staff, the account will likely fade out over time and eventually churn.

Intapp Billstream simplifies prebill management for lawyers by providing dynamic workflows that provide end-to-end coverage from timekeeping to proforma invoice creation. The solution automates adherence to compliance requirements, preventing billing errors to ensure that clients receive the bills they expect.

Automating compliance adherence for lawyers

At the inception of a new matter, the partner in charge negotiates and agrees to the terms the client puts forth, which become the rules legal team members are contractually bound to follow. In theory, firms have mechanisms in place to automatically communicate policies to stakeholders and enforce compliance.

In reality, the burden falls on the partner who is tasked with disseminating OCG terms to large matter teams. This role requires digesting complex contracts and making sure that lawyers and other professionals involved understand the rules and the importance of following them. Without automation, that’s easier said than done.

Lawyers aren’t expected to cross-check their timekeeping entries against the OCGs, which means that noncompliant line items will eventually land on the prebill. If the firm lacks automated proforma processes to flag these instances, it’s the partner’s responsibility to catch and correct the errors.

Tools that prevent compliance errors close these process gaps while providing a better experience for partners and matter team members. Intapp Billstream issues alerts when a noncompliant time entry hits the automated proforma invoice; the solution can be set to flag problematic entries for review and remediation, as well as block noncompliant entries from ever landing on the proforma bill in the first place.

This closed-loop cycle is efficient and reliable, which makes clients happier and more confident because they trust that their vendor has automated safeguards in place to ensure compliance.

Maintaining control of discounting guidelines

Without automated proforma invoices, lawyers will struggle to accurately report matter team members’ activities and associated billable hours, and to follow internal guidelines for discounting. Both of these challenges stem from manual prebill management processes.

When bills are prepared and reviewed manually, there are no checks and balances for discounting, which can take various forms. For example, a partner reviewing a bill might determine that a lawyer on the matter team spent too much time on a specific task and manually adjust the time entry. Or, if a matter is over budget generally, the partner might decide to trim various time entries to stay on track with client expectations.

When these untracked changes occur, there’s no way of knowing what changed, by how much, or why, which means the firm is experiencing hidden revenue leakage, and lawyers are losing credit for billable hours. Intapp Billstream provides full visibility into discounts, write-downs, and write-offs, creating an audit trail by documenting edits made to proforma bills and capturing the reasons why changes were made.

The solution also builds in thresholds for discounting. For example, if a partner makes billing concessions in excess of $10,000, the action is automatically escalated to the department head; if they exceed $50,000, the bill will require approval from the CFO.

The ability to document and track changes and to establish discounting limits within the solution provides the necessary transparency to ensure that the firm minimizes revenue leakage while protecting matter profitability.

Completing the review cycle for proforma bills

Lawyers pay attention to the work-to-cash cycle because they know that billing and collecting receivables quickly is vital to the firm’s financial health and cash flow. Subsequently, they’re expected to review and edit proforma bills as soon as they’re ready.

However, reviewing proforma bills on a one-off basis is a distraction from billable work, so the reality is often that they wait until mid-month to batch-process all of their bills at the same time.

This practice creates quality-of-life challenges for lawyers and billing staff in the back office because they’re always overloaded at the end of the month. Compounding this problem, billing teams lack visibility into how many bills are outstanding and how far along they are in the billing cycle, so it’s impossible to plan capacity.

Intapp Billstream addresses chronic billing challenges by providing visibility into which bills are in the pipeline and by simplifying review processes. When proforma bills flow through in a steady stream, the billing team’s workload becomes much easier to manage.

Transforming the business model for billing

The business challenge with manual proforma billing stems from process gaps: Billing specialists are dependent on lawyers to review and approve proforma bills as they come in, but lawyers are too busy with billable work to perform multiple off-cycle reviews.

Converting prebill management to an automated process breaks this dependency. The billing team no longer needs to follow up with lawyers offline or secure sign-off at the end of the month. Instead, this time-consuming back-and-forth is replaced by efficiencies in Intapp Billstream. Lawyers reviewing bills benefit from always-on visibility, as automated proforma processes identify and flag billing inconsistencies that could easily be missed during manual bill review. They can complete and approve bills quickly, speeding up work-to-cash cycles, with confidence in their bills’ accuracy.

For firms looking to expand their footprint, successfully scaling operations requires reliable, cost-effective methods to build the infrastructure required to support increased billing volume without adding more headcount. This is the path to profitable growth that Intapp Billstream facilitates.

Leveraging the advantages of cloud-based proforma billing solutions

Intapp Billstream is only available in the cloud, so firms can achieve time to value more quickly because they don’t need to supply or maintain their own infrastructure. Intapp offers a scalable, flexible framework that supports firms of all sizes and growth trajectories, providing the opportunity to deploy as quickly as possible. New features and iterations update automatically, which means that the software is continuously up to date and always on and available for the end user.

Lawyers benefit from automated compliance features that prevent the errors that result in rejected bills, and from tools that simplify and accelerate proforma bill review and work-to-cash cycles. Intapp Billstream removes the time-consuming stumbling blocks that distract from what lawyers do best: deliver legal counsel and client service.

Clients shouldn’t have to deal with billing errors that put the onus on their internal teams to solve; they deserve the predictability of accurate bills delivered in a timely fashion. Because Intapp Billstream automates compliance and keeps the billing cycle on track, clients can be confident that they’ll receive the bills they expect — when they expect them.

To learn more about Intapp Billstream, schedule a demo.

Written by:

Shishir Shetty

Vice President, Intapp Billstream

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