Guide to Outside Counsel Billing Guidelines

Outside counsel billing guidelines provide clear standards for billing between a company and any outside legal counsel. But to get the most out of them, your company needs effective mechanisms for compliance to go along with broader outside counsel management protocols. The legal e-billing software solutions from AdvoLogix are excellent resources for ensuring outside counsel billing guideline compliance, automating the outside counsel billing process, and avoiding unnecessary expenses.

A man ticking a checklist
A man with a pen ticking a checklist

Corporate legal departments frequently handle increasingly complex cases and legal issues. In-house legal departments now outsource much of their legal work to outside counsel. In many cases, working with outside counsel can provide greater efficiency and effectiveness for your company’s case management.

Of course, when working with outside counsel, your corporate legal department needs to consider the issue of billing. Many companies are beginning to implement outside counsel guidelines when outsourcing to third-party legal counsel. These guidelines establish expectations between both sides, ensure reliable billing, and prevent conflicts from arising. But though outside counsel guidelines can be helpful, they can also be complex. Legal e-billing systems from AdvoLogix can be a helpful way to ensure compliance with outside counsel billing guidelines for all parties involved.

What Are Outside Counsel Guidelines?

Outside counsel billing guidelines can cover a wide range of areas that may be relevant when a company outsources legal work to outside counsel. In most cases, outside counsel billing guidelines provide a regulatory framework for who can bill the company for legal work, what legal work they can bill the company for, how the billing rates will work for the duration of the contract, and what the billing process will look like.

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Establishing Outside Counsel Expectations

For example, a company may agree to billing guidelines with an outside law firm that specifies who in the firm will be doing the agreed-upon work. These guidelines typically limit billable legal work to senior partners or diversity-of-fee earners rather than paralegals, interns, or other junior-ranked staff.

Outside counsel billing guidelines also commonly set clear parameters for what specifically the contracted legal group can bill the company for. In some cases, an outside counsel may extract additional fees from a company through something such as “block-billing.” This occurs when the outside counsel bills for several individual tasks without indicating how time- or resource-exhaustive each task was.

Establishing Billing Guidelines

Companies may also want to prevent an outside counsel group from billing for each employee who listens in or engages on a particular issue. In some cases, an outside counsel may have multiple low-level employees unnecessarily listening in on a conference call and bill the company for each of them. Companies may also fear that outside counsel will bill them for general administrative tasks, travel time, or other vague work outside the parameters of what the company contracted the outside counsel to work on.

Establishing ‘Billing Hygiene’

Outside counsel billing guidelines can also set standards for specific billable rates and the processes by which the outside counsel may increase their rates. These guidelines may also set up a clear billing schedule, establish an agreed-upon billing process, and set standards for things such as accruals.

Understanding Compliance

Effective outside counsel management requires a comprehensive means of ensuring compliance with all outside counsel billing guidelines.

For example, the billing guidelines may specify that the outside counsel will not bill for time spent on legal research. However, this does not provide any tangible benefits to the company if its legal department does not have the means of identifying instances of billing for research on the invoices they receive from outside counsel.

Billing compliance requires an analytical framework for measuring all outside counsel billing against the specific requirements from relevant billing guidelines. Compliance also requires the ability to automatically reject any billing that falls outside these guidelines.

Many outside counsel billing guidelines contain compliance mechanisms within the guidelines themselves. In these cases, the company and the outside counsel will agree upon the compliance measures beforehand. This way, the outside counsel will know how billing invoices will be analyzed and whether specific charges will be rejected.

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Best Practices for Outside Counsel Billing Guidelines

Effective outside counsel management also requires a few key best practices for companies to follow when drawing these guidelines up. You’ll want to be sure the guidelines are:

Confusing or misleading guidelines can easily cause conflict and disagreement between the company and the outside counsel. Even with a good compliance mechanism in place, you still want to ensure there is no room for misinterpretation. Otherwise, you may suffer billing disputes.

Providing your outside counsel with readable summaries of your billing guidelines can go a long way in preventing confusion and misunderstandings before any billing occurs.

When you send your outside counsel billing guidelines to legal groups, follow up to ensure that the appropriate people have read them. If an outside law firm has specific attorneys or legal professionals working on your case, confirm they know all relevant guidelines before doing billable work. You should also ensure the outside counsel’s billing department understands the guidelines. 

Other best practices include: 

  • Enforcement
  • Limited internal communication
  • Automatic invoice rejections
  • Regular review
  • Agreed-upon terms for revision

Implementing Technology with Outside Counsel Guidelines

Given the complexities of outside counsel billing guidelines and guideline enforcement, e-billing software is an excellent resource for outside counsel management. Advanced e-billing programs can automate many processes involved in billing outside counsel. This means you can navigate compliance without spending too much time and resources.

AdvoLogix legal management products are excellent tools for monitoring compliance with all outside counsel billing guidelines. The AdvoLogix Caster uses advanced artificial intelligence tools to automate invoice processing. You can not only create invoices for all outside counsel, but you can also identify and flag potential billing errors based on specific billing guidelines.

The AdvoLogix Spend Management program allows you to automate your company’s budgetary processes to get a better hold of outside counsel billing. Plus, the Legal Matter Management product from AdvoLogix provides effective document management resources that will help you ensure compliance with outside counsel guidelines in all legal documents.

All AdvoLogix legal software products are built on the Salesforce platform, meaning that you will experience the industry’s highest standard of quality and cybersecurity when managing your outside counsel billing compliance.

Get Started with AdvoLogix Today

With more and more companies turning to outside counsel for complicated cases, outside counsel billing guidelines will increase in relevance across the legal world. Without effective guidelines and management, your company may lose money to outside counsel charges that are unnecessary or outside what you agreed to.

Fortunately, expense management software makes outside counsel guideline compliance much easier. With software solutions from AdvoLogix, you can facilitate thorough communication with all outside counsel, enforce compliance with your outside counsel billing guidelines, and automate essential processes. Reach out today to talk with one of our specialists to see firsthand how we can enhance your capabilities. 

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