Legal e-billing software: What is it and how can law firms benefit?

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Legal e-billing software is a digital tool that allows legal teams to automate many different financial tasks, including tracking billable hours and expenses using UTBMS codes, receiving payments, processing invoices, and maintaining IOLTA trust account compliance—all within one system.

Until recently, legal professionals had limited options when it came to modern billing and accounting software since many business accounting tools aren’t built for the complexities of legal billing processes.

Though many software packages are available for invoicing, legal e-billing software is different because it is custom-built for the needs of a legal practice. This means that it not only contains basic information like the total amount owed, but it also captures granular information about specific tasks and when they were performed. This added context can help you substantially improve your firm’s efficiency.

Key benefits of legal e-billing software

Adopting e-billing software and modern digital payments isn’t just good for a legal team’s reputation. It also provides several tangible benefits for law firms in the form of boosted efficiency, reduced errors and compliance risk, and better overall client experiences.

Reduce billing errors

While human beings are great at many things, one place we fall short is in processing large amounts of dense, intricate information. Manual data entry is extremely time-consuming and more error-prone—and when mistakes happen, it can take weeks or months to spot them, slowing down the billing process even further.

Save time with automation

E-billing for law firms simplifies the process of collecting payment for legal services. It uses smart automations for communications, processing recurring payments, and tracking billing status.

Improve cash flow and payment speed

E-billing for law firms can also improve your firm’s cash flow. It makes it possible for work to be submitted in real time. This means your clients can make payments more quickly, taking advantage of discounts by settling a bill with less delay. Of course, the converse is also true, and you can receive payments more quickly by invoicing with legal e-billing software.

Moreover, sending bills electronically mitigates potential delays in delivering invoices and bill reminders, making the entire billing cycle more timely and efficient.

Increase transparency and data insights

Without a clear, bird’s-eye view of your outstanding invoices, realized hours, and other financial metrics, it can be difficult to understand your firm’s financial performance and health. After all, you could have an excess of clients but a negative cash flow due to a high number of unpaid invoices.

Using legal e-billing consolidates all your billing processes and data, giving you an unbiased overview that will help you set attainable financial goals, improve processes, and boost efficiency.

Boost client experience

Offering modern, convenient payment methods dramatically improves the experience of paying for legal bills. By sending bills out at a consistent time, making it easy to pay them, and creating unobtrusive reminders for bills that need to be settled, legal e-billing software substantially reduces the burden your clients experience as they settle their accounts with your firm.

Legal e-billing workflow: How it works

For those who haven’t used e-billing software before, here is a quick breakdown of how the process works:

1. Log billable time accurately: Legal software makes it easier to enter time using appropriate UBTMS task and phase codes, enabling faster invoice approval, accurate reimbursement, and reduced guideline violations.
2. Generate your invoice: You can generate an invoice automatically using your time logs and notes.
3. Submit the invoice: Submit an invoice to the client through a secure payment portal. The invoice will also be logged on your billing system so you can track its status.
4. Collect payment quickly: Send an invoice to clients directly through a secure payment portal. Legal payment software also allows attorneys to save their clients’ preferred payment method or (if your business model supports it) set up payment plans directly on the payment portal, facilitating quick payments.

Ensure LEDES and UTBMS compliance

You’ll need to set it up to use UTBMS codes and LEDES formatting to ensure your invoices and time tracking entries are standardized and fully compliant with compliance standards.

LEDES: LEDES formatting was developed in the mid-90s to create a standard framework for legal e-billing information and is widely used.

UTBMS: The Uniform Task-Based Management System (UTBMS) is a set of codes developed by the ABA to classify the various legal services performed by a law firm. These codes help create standardized entries for tracking billable hours and expenses.

Simplify legal e-billing with 8am LawPay

Schedule a demo today to learn more about how the right legal e-billing software can help you eliminate admin and get paid faster.