E- Billing Vendor Statements on Legal Cost Savings

Are They Factually Correct or Just Exaggerated Vendor Hype?

If you are in insurance claims management or corporate legal management, you likely have received (or have been bombarded with) marketing materials from various e-billing vendors.  I got a marketing piece recently from a vendor.

The marketing material I got stated that by using the company’s e-billing program, the user could save 10% to 15% off their legal bills. There was no asterisk or any sort of qualifier. Just the flat statement that any company that uses their program could save up to 10% to 15% in legal costs.

If it were just this one e-billing vendor making this claim, I would not be writing this piece.  But the fact of the matter is that many e-billing vendors make similar claims of saving up to 15% off outside legal costs simply by using their product.  Just go to their websites.  One vendor’s website even promises customers a 1,000% ROI on the cost of their e-billing product.   Since e-billing programs generally cost about 1.5% of the gross amount of legal bills run through the e-billing system, I must admit that I am still trying to figure out how one can get a 1,000% ROI.

Before going further, let me say that I am a big believer in the use of e-billing systems.  I set out the reasons for using a good e-billing program as a part of a company’s legal costs control strategy in my article Fleecing the Golden Goose.  I have also written an article on Evaluating E-billing Systems in which I also comment favorably on the use of e-billing systems.  But – and this is a big but – use of an e-billing program alone will definitely not result in saving 10% to 15% in legal costs savings.

An e-billing program is just a tool to use to help you review legal bills.  Believe me it is possible to get 10% to 15% savings in legal costs whether or not you use an e-billing program. I know this for a fact because I can get the same level of savings whether or not I use an e-billing program.

The important take away here is that while an e-billing program is a good tool to use to review legal bills, you can only get to the point where you can save 10% to 15% by a doing a thorough subjective review of the legal bills.  This subjective review can only be done in two ways.   Either you train your staff to properly review legal bills (and be committed to building a legal bill review component into their annual performance appraisal) or you can outsource legal bill reviews to a qualified legal bill review vendor.

I have written many past blog pieces on the pros and cons of in-house and outsourced legal bill reviews.  If you have not already read them, I invite you to find these pieces under “prior posts” on the right column.

In closing, I invite you to contact me if you would like more information on my outsourced legal bill review services or my services to train your staff on how to properly legal bills.  I have successfully trained both claims staffs and legal bill review staffs of all sizes.

[Note to readers: I meant to do a follow-up this week to my prior blog piece on how consolidating legal work can sometimes wind up costing money rather than saving money.  That is a very important issue and I will be writing on it in the near future. ]

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