Christopher Fitzpatrick, Novartis Consumer Health

E-billing means more than not having to wait for the post. It also allows law firms to establish a secure link to your computer systems to enable automatic, electronic settlement.
More significantly for legal directors who are keen to promote transparency in their firm’s fees, e-billing can also introduce a facility tied to a firm’s extranet to provide a fully searchable archive of billing information.
Many law firms now offer extranet services, such as virtual dealrooms, which are designed to offer increased transparency as well as promote collaborative working with in-house legal departments.
But of the 100 general counsel interviewed in last month’s Legal Director Benchmarker survey, only 15 said their firms had offered an e-billing facility, although almost half said they wanted it.
Either most City law firms are frantically developing the technology to provide e-billing or they are demonstrating a blatant disregard for their clients’ wishes. It is also possible that in-house counsel have not been vocal enough with their demands.
E-billing can be a valuable source of information for in-house counsel when planning budgets and assessing a firm’s performance – particularly if it is possible to dictate the frequency of bills.
Many in-house departments prefer to receive bills on a monthly basis, but if you need them weekly a firm that offers e-billing should be able to accommodate this.
In some cases, online billing information is so detailed that an in-house lawyer can see which fee earners or partners are working on a specific part of a matter, how long they spent on it and a brief explanation of the nature of the work.
Several large firms – notably Linklaters – have gone a step further to offer ‘real-time financial information’. As soon as a lawyer submits a record of time spent on a job to the internal billing system, it is published on the extranet for clients to examine.
Such transparency can give in-house counsel an insight into the efficiency of a fee earner’s work. It can also show how much time the partner or rainmaker who won the work is spending on it and how much they are delegating.
Few firms offer real-time financial information and many are sceptical of its benefits to clients. But some offer a digest of pre-billing information – internally edited time-recording data – which may provide a more accurate indicator of a final bill because the customary adjustments have been made. The level of detail in these digests, normally published on extranets weekly, varies from firm to firm.
Legal Director asked 30 of the UK’s large firms whether they offered their clients e-billing facilities and the responses suggest law firms are less interested in offering e-billing than their smaller competitors.
Only one firm – Rowe & Maw – answered yes. But one of the world’s three biggest law firms said it was close to offering e-billing. Of the others, three admitted they were still getting their back-office systems into shape and would consider e-billing as soon as they had the capability.
Firms with solid back-office systems usually offer a degree of billing information online. Janet Day, IT director at Berwin Leighton, said that although her firm did not, it did provide detailed financial information via extranets and virtual dealrooms.
Richard Hodkinson, IT director at Irwin Mitchell, said there had been little interest in e-billing from clients. His opinion was reinforced by two magic circle IT directors.
Christopher Fitzpatrick, vice-president and general counsel at Novartis Consumer Health, said e-billing was not available from any of his firms. “They may be willing and capable, but we have not demanded it,” he said. “We require back-up for bills, with detail of the time and tasks underlying each amount. Since it is more than a numerical exercise, the paper approach remains in place.”
He said that, although Novartis would need to set up internal systems to accept
e-billing, this would not be a problem. The first step would be linking up with other internal systems managed by IT/finance to address trade customers. “Then we could ask firms to conform to an electronic approach, which would need to be shaped so lawyers reviewed the back-up before accountants paid bills. We may go in this direction, but it is only an idea right now.”
David Halliwell, head of professional support at Wragge & Co, pointed out that people interpreted e-billing in different ways. “The answer depends on your definition,” he says. “Do we give clients access to real-time financial information online? Yes. Do we send out bills to clients electronically with simultaneous electronic settlement? Not yet, but we are looking at it.”
If e-billing is to take off in UK law firms, part of the drive must come from the client.