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The BT Legal team has spent the last three years changing the way it deals with outside lawyers and manages its own lawyers. More recently, it introduced a new e-invoicing platform, MyLegal, which has revamped the way it manages legal expenses.

David Griffin, head of legal systems and governance and change at BT, said the company wanted to move away from the smoke and mirrors approach to billing some law firms, introducing more accountability and transparency in business management. Hopefully this will mean the team can spot issues early and avoid receiving unexpected bills from their outside attorney.

“It’s about codifying the work done by lawyers and not letting things go out the door. We want to put these checks on [law firms] consistently,” he says. “How do we meet these challenges before they become material? Avoid surprise bills? Can we review the work that is being done? You must be proactive.

BT Legal’s approach could be followed by many other in-house legal teams in the years to come. Despite the constant focus on fee arrangement reform over the past decade, new data from Legalease Research Services, which contacts more than 150,000 clients in the UK each year to provide reviews of firms’ services of lawyers, show that clients are still unhappy with the amount of information. they get from their law firms about billing. Many customers are fed up with the lack of transparency, which leaves them surprised by bills and unsure of what they are being charged.

big data

The annual survey of UK clients revealed widespread dissatisfaction with private practice billing tactics, with year-on-year approval rates declining across the board.

The survey sees thousands of firms and corporate solicitors offer their candid assessment of hundreds of law firms across the UK on 12 different client satisfaction measures. These range from quality of lawyers, value for money, availability and commitment of partners, communication and case management, and industry knowledge and profile.

While most law firms in the UK score well in almost every category of client satisfaction, one area they consistently score poorly in is the transparency of their billing arrangements.

“They gave me a quote and then charged almost triple that. Despite our protests, they refused to make a single amendment. I couldn’t recommend them in any way,” says a client of a regional law firm.

Another client of a business in the city says: “The billing was opaque at best and extremely high for doing very little. They refuse to provide hours and a breakdown. They are old school, refusing to account for their time and hours – as is normal. Absolutely shocking.

Tony Williams, director of Jomati Consultants and former managing partner of Andersen Legal and Clifford Chance, says in-house legal teams are increasingly unwilling to accept unclear invoices – and are demanding more transparency than ever from firms of lawyers. “Big companies with decent legal spend put [billing] front and center,” says Williams. “Years ago, unless the final bill was totally outrageous, people didn’t wonder how deals were made. Rightly, customers are now demanding transparency: “What am I paying here? How effective are you going to be? »

Digging deeper into the data, we see that companies in the Magic Circle score particularly badly. Customers still say they are very satisfied with the quality of the advice, but are less and less accepting of the opacity of invoicing. Not all companies are criticized for their lack of transparency. Large international mid-sized multi-jurisdictional firms, such as Clyde & Co and Taylor Wessing, closely followed by boutique firms and the Big Four London legal providers all score well on billing transparency. In many cases, these firms are praised for their “quick and clear billing”, their “pragmatic approach” and their “competitive and imaginative proposals”, as reported by various clients to The Legal 500.

Williams believes there is now a split between the more progressive companies that are ready to adopt new billing technologies or alternative fee arrangements compared to traditional large companies. ‘The Old Guard [law firms] can no longer rely on the lion’s share of the work based on their market reputation alone,” he says, adding that traditional law firms must “get reasonable” and innovate on billing or risk being left behind.

Techie

Dissatisfaction is partly driven by new technologies and clients expect better data from their law firms. Ten years ago, clients might have been happy to receive a monthly or quarterly email with an invoice or spreadsheet detailing how much they owed their law firm. But these days, many customers want near real-time electronic billing data, so they can track their expenses accurately and efficiently.

Chris Bull, director of Edge International and former chief executive of Osborne Clarke, says companies have apparently spent a lot of time and money on new apps and platforms in recent years to address this issue.

But he thinks that hasn’t been enough to satisfy clients as there has been a “dramatic shift” in power between clients and their firms, with the rise of increasingly in-house legal operations teams. more demanding and influential, putting pressure on law firms to provide more information.

“Customers are increasingly reluctant to accept the unacceptable status quo,” he says, adding that the rise of e-invoicing systems has not improved the situation. The insight into costs provided by these technologies allows clients to ask pointed questions about how lawyers spend their time and what exactly they charge. This often puts outside counsel on the defensive.

“In fact, the client/attorney relationship has generally become more, not less, adversarial as e-invoicing systems have been deployed,” says Bull.

Electronic invoicing platforms, such as those offered by Thomson Reuters and LexisNexis among others, are now widely used by customers. More than 80% of businesses now use e-invoicing to submit at least some of their invoices, according to a survey by data provider Statista earlier this year.

Hillary McNally, managing director of corporate legal at Thomson Reuters, explains that many internal teams have introduced e-invoicing to reduce their external legal expenses. The objective of these platforms is to “systematize transparency”, to encourage good timing and to punish bulk billing until good practices become widespread. She says about four-fifths of corporate legal departments now have a dedicated legal operations professional, someone responsible for reducing legal expenses and streamlining processes.

“Clients don’t want to cut corners on results, but they don’t want those results to come at the expense of visibility,” McNally says. “Transparency is here to stay, and it’s better to be collaborative and seize the opportunities it presents than see it as a threat.”

Back at BT Legal, Leeanne Whaley, Director of Transformation, says the introduction of new platforms to monitor the work of external lawyers has enabled the team not only to cut costs, but also to introduce new methods of work, such as alternative fee arrangements.

“We spend a lot of money with outside law firms,” she says. “Historically, it was appropriate for law firms not to be transparent, but aside from mergers and acquisitions and costly litigation, the work of a commercial lawyer is more repeatable than ever.”

To learn more, visit www.legaleasedata.com