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Law firms lower the boom on electronic invoicing

A survey conducted by the Legal Electronic Data Exchange Standard (LEDES) Oversight Committee received responses from 121 law firms. The Committee’s report, released in March, 2007, contains mostly criticisms by law firms about the present state of affairs and damns electronic billing(See my posts of Nov. 28, 2007 on billing disputes, getting paid, and little difference in bill review.). A summary question (at 11) lays it on: “Only 8% of respondents feel that electronic billing streamlines the payment cycle and makes them more efficient, and 10% feel there is little to no difference between paper and electronic billing with regard to efficiency.”

A blunt manager in a law department that likes electronic billing might shoot back, “Too bad, deal with it!” Law departments perceive benefits from e-billing so how their law firms feel doesn’t matter. But it does matter. Over time, law firms will adjust, but basic economics tells us that if the cost of a service rises, ultimately the consumer picks up the tab. Right now, e-billing law departments benefit from a subsidy by those departments that don’t e-bill, but still pay some share of increased billing rates.