December 9, 2005
Law Firms Gain Little from Electronic Billing to Insurance Clients
Getting ready for the holidays for me has always meant cleaning up things. That includes my pending file and C drawer. I’ll tell you more about my C drawer in a subsequent post.
In doing so, I came across an e-mail from an associate pointing out the following quote that appeared in the September 29, 2005 issue of Legal Technology Online.
“Technological prowess is such a key factor in corporate clients' hiring and retention of outside law firms, 35 percent of legal departments say they require electronic billing. Some have even fired law firms for lacking technical ability. On a positive note, clients like e-billing's streamlined invoice review and firms enjoy the faster payment turnaround. When it comes to billing, being "old school" is not a way to save money - it's a way to lose business.”
The quote first appeared in a National Law Journal article by James Evangelista, Teresa Strange and Kelley Johnston.
The more I discuss corporate mandated electronic billing with law firms, the clearer becomes a picture of two different spheres. In one sphere you have the firm's corporate clients. While these clients are motivated by a desire to lower legal cost, they don’t necessarily want to do it on the backs of law firms. They want law firms to become more efficient. They prefer predictability over lower cost and fewer hours over lower rates. They do give something back for the extra cost and effort law firms incur to comply with their electronic requirements. They do pay faster as promised.
The second sphere involves insurance companies. This group appears to chase the lowest hourly rate and gives little or nothing back. Firms report that electronic billing has not speeded up payments and, in fact, insurance companies slowed the entire process down by shifting to quarterly billing in many cases.
There seems to be give and take in the corporate sphere and all take in the insurance sphere.
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Filed under Blog by Tom Collins