Although plenty of ink and attention is spent thinking about the potential of new and upcoming technologies in the legal technology sphere, members of the Corporate Legal Operations Consortium (CLOC) will tell you that it all pales in comparison to e-billing.

“E-billing is the first and most fundamental technology that goes into a legal organization,” Connie Brenton, senior director of legal operations at NetApp, told ALM affiliate Legaltech News. “If you are starting up a group, or if you’re coming into a group, you need to be able to understand where your funds are being spent. Fiscal responsibility is at the top of the list, and it’s always the first technology that goes in before any other technology.”

In an increasingly efficiency-driven legal world, however, those e-billing systems are under a great deal of pressure to meet the functionality needs of in-house teams. With both established vendors like Thomson Reuters and Wolters Kluwer increasingly introducing new modules and features to impress in-house clients, and new players like SimpleLegal looking to capitalize on newer technical infrastructure, legal operations teams are in a solid position to shape the e-billing systems of the future.

Jeff Franke, chief of staff to Yahoo’s general counsel and senior director of the company’s global legal operations, explained that part of the reason e-billing has such a core position in corporate legal departments is its longevity in the business relative to other technologies. “E-billing has been around in a more steady state a little bit longer,” Franke said. “You saw e-billing systems in place as early as 2000, maybe even before that.”

According to CLOC’s recently released 2017 State of the Industry survey, 83 percent of the 158 legal departments polled said they had an e-billing system in place. Eighty-four percent of those who did used one of five different e-billing vendors: Thomson Reuters Legal Tracker, Mitratech Collaborati/TeamConnect, T360 – Tymetrix, LexisNexis CounselLink and SimpleLegal.

Historically, however, e-billing systems haven’t always been as easy and efficient as they purport to be. Because of the huge volumes of invoices e-billing platforms are tasked with sorting, and the wide variety of ways those invoices are filed, the task of creating a simple but robust e-billing system is a fairly large one. “They aren’t exactly the easiest things to use, and they have their own interface problems,” Franke remarked.

Mary Shen O’Carroll, head of legal operations for the technology and strategy team at Google, said that the e-billing industry does seem interested in growing with the needs of their clients.  “I think there’s been so much improvement in technology, even in just the last handful of years, and that’s because the pressure that in-house teams, and in particular legal operations, are putting on our firms as well as on our software providers,” she said.

E-billing differs from other technologies in the legal technology space in that the legal industry is its exclusive customer base. While contract and document management platforms may design their tools for broader customer bases, e-billing companies tend to align themselves closely with legal operations leaders to improve upon out their tools.

“All of these players in the e-billing space, they’re paying very careful attention to what the customer wants. It’s not very easy for them to make wholesale changes, but they’re very regularly reaching out to people in the industry to get a sense of what companies are looking for,” Franke noted.

Because of this, Brenton sees a great deal of power for in-house leaders to shape the technology available in the e-billing market. “This is the first time in quite some time that the customer has been asked, ‘What do you want?’” she said.

“Legacy” vendors, typically large companies like Thomson Reuters and LexisNexis, sometimes get a bad rap for riding on their business relationships rather than their technology innovation, especially in comparison to startups eager to build a new customer base. Instead, O’Carroll has seen larger e-billing vendors hustle to stay relevant to corporate legal departments. “I think there are some large incumbents who’ve been around who are doing pretty interesting new things and are being pushed and challenged by their clients,” she noted.

Notably, CLOC’s data conflicts with similar studies. The 2016 General Counsel Report by the Consero Group, which surveyed 76 general counsel from Fortune 1000 companies, found that only 29 percent of general counsel use a third-party e-billing system, a far cry from CLOC’s 83 percent.

Either way, O’Carroll noted, at least 17 percent of organizations haven’t committed to an e-billing system. “There’s a portion of the market that is still untapped. It’s still somewhat fragmented such that there is definitely an opportunity for newcomers to come in and disrupt,” she said.

Those newcomers are beginning to emerge from the woodwork. SimpleLegal, an e-billing platform founded in 2013, is now one of the top five e-billing platforms among corporate legal departments, with nearly 6 percent of organizations polled using their system.

Venture capitalists have also seen the opportunity to push new technology into the e-billing space. Brenton said that venture capitalists, especially those who are just beginning to dabble in legal technology investment, have staked some ground into e-billing because of its central role in corporate legal departments’ operations strategies. “Because e-billing systems are the foundational platform, these are the technologies that are getting the most interest from the VCs that are starting to enter this space,” she said.

Certainly that’s been the case for SimpleLegal, who closed a $10 million Series A funding round this summer. The funding round was among the largest legal technology investments this year. VCs have had a tough go of turning investments into exits in the legal tech space, in large part because large law firms and legal departments are hesitant to part ways with legacy providers, but Franke thinks that the central role of e-billing and the pressure on corporate legal departments to keep spends down means that in-house teams are considering all their options, even new market entrants.

“If there’s a significant opportunity to drive efficiency by reduced cost from the technology itself or reduced head count, if a technology allows us to get better access to data for reporting, that’s something we have to look at,” Franke said.

Lisa Konie, senior director of legal operations at Adobe Systems Inc., said despite all the potential new bells and whistles on e-billing platforms, she’s most interested in data and reporting tools that help “leverage the vast amount of information already in these databases.”

“For me, it’s the big data component. The need to have really top-notch reporting capabilities coming out of these solutions in a way that you don’t have to be a quantitative analyst to understand and utilize is really critical for these solutions,” said Konie, who is also a CLOC member. “We need to be able to put our finger on the pulse of our legal organizations, and to be accountable to our CEOs and our CFOs.”

Brenton agreed that reporting and data are likely to be key components in the dominant e-billing platforms of the future. “If we’re capable of understanding how much a legal service should cost, that will fundamentally change how services are delivered. With the capture of data through e-billing systems, we’re getting very close to that,” she said.

“It’s a really interesting area for the legal operations folks because it’s been so stable for so long and now we have new entrants,” Brenton said. Achieving that reality, given the power that legal operations leaders hold in shaping their own technology, could be fun.