E-billing “Rules Engines:” They Work All of the Time Some of the Time

I’m going to write about something that many attorneys whose clients require them to submit their legal bills through e-billing programs already know. E-billing rules engines supposedly programmed to automatically spot and take deductions in legal invoices for violations of a company’s billing guidelines often do not work as advertised.

And when I say e-billing rules engines do not often work “as advertised,” I am talking about how e-billing companies promote the use of their rules engines.  As one e-billing company puts it on their website, “[Name of rules engine] automatically reviews, validates, flags, and adjusts line-item invoice charges to comply with billing guidelines.”

Wow! No human involvement needed. Just push a few buttons and sit back and reap the savings. Sounds incredible doesn’t it?

Well, it is incredible alright. But unfortunately rules engines do not always work as advertised. I make this statement as someone who has worked with some large national companies (including insurance companies) who have experienced problems with their e-billing programs and as someone who spent two years consulting with one large e-billing company. Thus, I’ve seen close-up both sides of the e-billing coin.

And what I have seen and experienced boils down to this. The rules engines that I have had experience with are good at catching “objective” violations of a company’s billing guidelines such as whether hourly billing rates are correct or if there are any math errors. However, where e-billing rules engines often fail to perform as advertised is in catching violations of billing guidelines that involve “subjective” determination such as whether or not certain tasks are appropriate for an attorney to do.

To illustrate, consider this actual billing entry:

“Review/analyze Division of Administrative Hearing pleadings (.20); review           litigation docket (.20); review request for demand if any, last demand request, any reply (.20); t/call to opposing counsel to try to resolve before year end (.20); t/calls from/to opposing counsel regarding issues pending still (.20).”

To me, these are all activities one would expect an attorney to do. However, the entire entry was automatically reduced to “0” by the e-billing rules engine for the following reason:

“Time appears to reflect tasks associated with the maintenance of the firm’s calendar (i.e., receipts of dates, calculating dates, file review regarding dates, communicating advising/confirming dates, etc.) that are suitable for litigation support personnel and, therefore, are considered as non-billable overhead. – 1 Hour”

Of course, this “system generated” reason for the reduction doesn’t make any sense. And when attorneys see their bills marked down for things like this it drives them up a wall. And they have to spend time – that they cannot get paid for – to file their appeals. On the other end, the company has to take time to process the appeals.

I recently talked with an attorney whose law firm has offices in different parts of the U.S.  She told me that in the firm’s 17 person billing department, 3 persons do nothing but handle appeals for reductions in the legal bills mostly generated by e-billing programs. And she gave me several examples of ridiculous reductions taken that they had to spend time dealing with. The attorney was inquiring whether I would be available as a consultant to look over their legal bills before they were submitted to help eliminate issues that would be susceptible to reductions by their clients’ e-billing rules engines.

The attorney I spoke to is not the only attorney who is eagerly searching for something to do to counter the costly and seemingly irrational reductions generated by e-billing rules engines. Because of this need, a whole new cottage industry of “pre-bill consultants” has sprung up to help law firms.  What pre-bill consultants mainly do is scrub law firm bills of certain words or phrases in descriptions of tasks that will trigger flagging by an e-billing system.

But in doing their work to help avoid triggering inappropriate system generated reductions, pre-bill consultants will also help law firms avoid system detection of billing entries that should trigger reductions. I wrote about this in a piece entitled “Are ‘Pre-Bill Consultants’ Helping Attorneys to ‘Fly Under the Radar’ of Legal Bill Review Programs?”

There are other problematic issues involved with relying solely upon an e-billing program for automated review of legal bills. I’ll try to comment on some of these other issues in a future post. For now, I will simply close with the thought that when attorneys see irrational reductions being taken by e-billing programs, it tends to confirm their suspicion that computers and not real people are reviewing their legal bills.

Reviewing legal bills is already a very sensitive issue with attorneys and a company  should avoid creating needless riffs. This is why many companies – even those who use an e-billing program – will turn to me to review legal bills in sensitive matters. They know for one thing that I review legal bills the old fashioned way, i.e., I read every word in every entry and do not rely upon a computer to tell me when I should take reductions. Attorneys may still not like it that I take reductions.  But at least they know a human and not a computer is reviewing their legal bills.