Today, in most law firms, billing is a broken process. It’s hugely manual with a lot of paper or digital paper with 12 or more people involved in the creation of the bill. It’s time consuming and there’s huge room for error. It’s also completely opaque. Owners don’t know how many bills are in play during the month and not until after month end do they know the value of bills going out the door.
Billing consumes five to ten days a month of front office worker time and floods revenue earners with billing details when they should be billing time. People are making big financial decisions without guard rails, writing down time with no controls. Firms are taking a top line hit in lost revenue, but also an internal hit because there is no capture of the decision making about why time is being written off. The costs from such a broken process are literally huge. Larger firms routinely lose millions of dollars a month in direct and indirect costs from this broken process.
Also billing is used as a proxy for project management. Client communication should be separate from the billing – which should be frictionless. The culture needs to change, divorcing managing the cash flow process from delivering the legal services.
The strategic objective should be to produce the bills your customers want to pay. Making sure the value creation engine inside the law firm is aligned to your clients’ needs. The bill is simply capturing that value and turning it into cash.
The Covid pandemic blew the issues around billing wide open and exposed how painfully manual the process is. Firms in lockdown, working from home offices, were unable to generate bills without people to physically go into the office, create PDFs and Fedex to global locations, then coordinate the resulting marked up changes. A laborious and already broken process became even more dysfunctional.
Billstream’s customers who were advanced in their implementation process have been largely insulated from the problems faced by most firms. Customers in the early stages of implementation seized the opportunity. To quote one such customer: “We’ve danced around this for years, but Covid was a circuit breaker. We just had to do it. From a cultural change perspective billing automation is even harder than time recording. But the benefits from just 80 percent of the firm playing ball have been boggling”.
So what what does a modern process look like? How and why does Billstream solve the problems around billing. And more important, how do firms benefit?
First there’s automating the bill production cycle to minimize the administration load, minimizing the work required by non-fee earners and minimizing the time spent by fee earners. Either side of that is reducing time and cost of collections once the bill has gone out. And there’s ensuring that all bills comply with the terms of engagement agreed with the client.
The objective is clear: to streamline the process of turning knowledge work into cash. Our experience is that a large firm can get immediate benefit from targeting the ‘at least’ 20 percent of revenue lost to ‘leakage’ from time being written down during the billing cycle.
Further significant cash flow benefits are quickly achieved by reducing payment delays from bills not being compliant because of disconnects between billing and client terms. Compliant billing reduces bill queries and speeds settlement. Compliance is a huge factor in client satisfaction and retention.
Billstream is proving the to be a ‘magic wand’ in applying modern automation software to the billing issues which all firms need to solve. But the magic is not in the wand. The magic is in the business knowledge and relationships that Wilson Allen has established with its clients. Billstream – the wand or tool – has been developed based on a deep understanding of firm dynamics. Wilson Allen not only has developed the product, but implements the product and provides all the supporting services. No one else can do that.