LEDES Billing

Welcome to Accountants Law Pod, where accounting professionals and law firms converge, hosted by Linda Artesani, Sarah Prevost, and Steven Libhart.

Welcome back to the podcast, everyone. And we're, we're still trudging through first quarter. Actually, it's almost over, which is kind of crazy. And there's a lot going on. Don't you feel like there's a lot going on, Sarah?

Mm-hmm.

I think we're a lot of things. Both of us are not sleeping well, which is not optimal. Um, I think because there's so many things in our head. I've kind of been using that as I teach yoga. I'm like, everybody, like, get into a forward fold and just imagine all the things like a snow globe falling out of your head to kind of get all your thoughts. Because sometimes when they come off of playing tennis or pickleball and they come in, they're full of all this vibrant energy. And then I'm like, okay, I know what I got to do here because I can't even get their attention to start the class. So I quiet them down, and I just feel like that feels like kind of where we're at with working in accounting right now, especially with like all the AI stuff. And, you know, we actually dedicate a week of that every month to sharing what we know with AI, with legal, legal accounting, which is, I think, really important. I don't want to be that person that says, I'm not using that AI. No good. Not going to do it. You certainly don't want to be that person. So definitely want to be the more proactive one.

Sorry, love.

But no, really, I mean, I don't think— and it's kind of a funny story. This weekend, my husband was filling out a form to get insurance for our properties. And he's— his mother told him that he didn't need to know how to type, that his wife or secretary would type for him. So I said to him, you just go fill that out yourself.

Yeah.

And you got nothing else to do. You can use this typing method, right? The pointing the fingers down one at a time. So I go into the room and he's sitting at the desk and he said, I think I did it. I think I'm done. He had to fill out a spreadsheet. So yes, sorry.

Oh, a spreadsheet.

He had to fill out a spreadsheet. So I sat down at the desk and I said— he goes, can you check my work? And I looked at it. So every property, we had to list every property that we owned, and then we had to say what company owned it, the entity type, and who owns it, email, all that. Very simple. He was in there for hours. I come in, he's got the first one down.

He wrote the ad.

He filled that whole first line out perfectly. The second line, he wrote the second address, and then he put ditto marks in every single. Oh, I couldn't figure out what the heck it was. I said, "What is that? A code of some sort?" And he's like, "What do you mean? They're ditto marks. I mean the same as above." I said, "You can't use a ditto mark in a in a spreadsheet. It's a isn't it a formula of some sort?" And I'm like, "You can't." Well, I don't know these things.

And da da da da da.

I'm thinking, okay.

Yeah.

This is my lot in life for marrying someone older. This is my elder tech moment. And, um, he already had filled it out one time before, and he didn't print it because he prints everything. And I looked at it, I said, well, bring it up and let's see if we can find it in your computer. And it was in a portal. So he didn't fill it out. He never must have hit send. So when he opened the portal, it was empty, and he couldn't find it on his computer. He thought if he printed it, it was going to make a difference. I'm like, it didn't matter if you printed it or not. You still have to fill it all back out again. So yeah.

That's a brilliant segue, Linda, to—

Yeah, to leads billing, right? Well, if you've ever opened up a leads bill for the first time, because that's our topic, leads billing. Leads is an interesting style of billing, and you could go your whole career doing legal income, legal bookkeeping, and never, ever, ever run into leads billing because it's not always— I think more of the bigger firms or firms that work with bigger companies Have more of this insurance industry. You're going to run into LEEDS billing if you have to, because insurance companies, like, if you get a big insurance company, they want standardized billing. So that's the purpose of LEEDS.

Yeah, that's the key word right there, Linda. It's the legal electronic way, and they use certain legal task codes that allow for that. And that's the funny part with what you're saying. They can't use ditto marks. They can't Understandably, if you're a big corporation and you're accepting massive— I'll just use like a sports company like Adidas or something or Puma or something like that. You're accepting all of these bills from all these vendors. You're not gonna pay a lot of people to type it all in. So you have what's called late billing to handle.

And if you've ever opened one, it comes in a text format, and it is a format that looks like Sometimes you hit the wrong keys on your computer and you get this weird gobbledygook, like you open up a backend screen. It looks like that. And it's very finicky if you don't know what you're doing, because you have to actually create these bills using usually like a Clio, a LeanLaw. LeanLaw does a great job with it. Create these bills, and then you have to upload them to another system like LegalTracker or another one. I'm sure there's 8,000 names I could come up with that you have to upload it. And then they have a whole standardized—

Mm-hmm.

Sometimes the firm, the law firm, has its own unique code that needs to be on the bill, and you have to make sure that you have all that information in besides those common codes, which, um, the codes, the codes are there to help the system understand what you're billing for. So, um, I know, like, I do it for a firm. I actually do it myself. It's one of the clients I still keep so I can keep knowing how to do this work. And I'm tasked with— the bills are entered into Hubdoc for me, and I have to put them in. And if they're with a company that's big, like a Microsoft— I'm where they're billing Microsoft company— they have to be leads, and they have to have the correct codes. The wrong code can shoot it back, insurance won't pay, and you had to start over and edit and audit all that.

You know, if you put a comma, a comma in the wrong place, In the middle of a line, a semicolon, it'll reject the entire bill.

Yep.

Well, the thing, the codes amount to the expenses, the timekeepers. And the other part of this that we didn't talk about is the pre-part, which is what has been approved. Not every timekeeper, so not every style of associate or a junior or whatever you want, however it's logged in your system, isn't accepted. How much you have to negotiate the budgets. Sometimes the budgets have to be in before Yep. The builds, the leads bill goes through.

Oh, Sarah, I remember that.

There's like multi-pieces to this.

Yes.

So it's— I love it. Linda started out with this good story. Right.

And don't use ditto marks in a Google Sheet.

Ditto marks. But if you tangibly think about it, and if you're in this space of billing, these are the pieces. Now, I think what happens is, though, and Steve, maybe you can help us with this, it's just kind of consumed or thought that the paralegal or someone, the legal assistant, is going to know how to do these things.

That's right. That's right.

And it is a full training thing. And it starts with how the attorney negotiated the entire thing, let's say the project or the work. And then it kind of follows all the way through.

You mentioned the budget. The budget was huge. In the last law firm I worked in, we did a lot of insurance work. We were recovering money from the 2008 financial crash through a financial institution, and their insurance company required the leads billing. And to your point, um, the attorneys in the firm didn't quite understand how much the budget was. It was just like a— yeah, for lack of better words— an almost get what you can from them situation. And, you know, documenting that and then seeing, you know, paralegals struggling with that and the person who did the billing struggling with that, it would take weeks just to get the bill out every month.

And a lot of times the bills are— they're Actually, you don't get paid the full amount. It gets—

That's right.

Less.

And now you have to handle— if you're a legal accountant and you're doing this kind of work where you get a client with this and you're trying to figure out what this is, you're going to have to factor in that you are going to have an extra layer of writing off or writing down or adjusting. And God help you if you're doing the billing because, like, you're following up.

Or following up, Linda.

Following up, figuring out. I mean, we had, we had a whole rigmarole with a client that Had changed their billing rate, but was it the— was it the— Lee's Place, the software didn't accept the new rate?

Somewhere the ball dropped? It was a crossover because we had bills from the prior period that had to go in at the old rate, and either the old rate or the new rate was in. So the rate— the bills were getting kicked back. And then what happened was any sort of appeals that happened, what was permitted If travel wasn't allowed. I mean, it was just like enumerating things. So it compounded itself. And we have a team that does this work, but they had to— there was a lot of time spent to Linda's recollection.

Yeah, we have a team that specializes in leads building that. It's because it's such a unique thing. And it is its own little animal. I mean, and if you work on this kind of— if you could make this your sub-niche or your micro-niche, If you wanted to specialize in that, but make sure that you actually offer billing services because you can get paid quite well for it if you know what you're doing.

But you also have to be pretty efficient. You can't just build it. I mean, it is not something like it's a time-consuming task, but it's not something like you're just like a big ticket item. No, there's a lot of work. It's a lot of—

It's very scientific, almost.

Very detail-oriented. Yeah. And what does LEED stand for again? I know that the—

It is Legal Electronic Data Exchange Standard.

And it was 1998, right? Is the 1998B version is the one that most all the firms use?

Yeah.

So there were multiple versions, but it looks 1998 when you open it up to me. Yeah.

And you can have— so, so the other side to this, to, to kind of further this down, um, because I have a client that I work with that we end up working a lot with this. Maybe the attorney renegotiated how they're going to bill. And the way that they used to bill, let's say they billed, they were permitted to do each project in individual billing, and let's say they decided to put all of them in one billing, and then that goes into the lead system, whatever that system is, and it gets accepted. Well, the other side of it is, is it's sure it will get accepted, but then you've got somebody else receiving the data. And what if that employee changes on whoever, whatever that corporation is?

Right.

Or a claims adjuster change. If we're talking about insurance, there's multiple things that could happen. So in that exchange, it can delay your receivables.

Yeah.

So now you have to kind of go back and forth with not just managing the bill itself and all the appeals and all of the little nuances, but you also have to manage the receivable of it to see— sometimes you have to negotiate and say, okay, 80% of the bill is fine. I need you to pay 80% of the bill, and then we need to accept whatever 20% held back. You become beyond just a billing individual. You're now participating. And you also have to retain a lot of data because when it comes time to negotiate these deals on behalf of the partner, the partner needs to know what is the bottleneck, what are the things that you keep coming— you need to have this summarized. So you have that Steve sheet. Out of scope sheet. Now it's like a billing scope sheet.

But that's also a place that you have to have a good workflow.

You have to have a strong one.

Yeah, we have a very strong workflow for leads, and we're very lucky to have— I think Nicole knows it inside out and upside down when it comes to leads billing as far as on our team. And fortunately, she kind of is the lead on all of them and teaching people how to do it.

It's her organizational mind that thrives in that due diligence. Yeah, which is great. I mean, it's very nice to see a strong To see something that you, like you said, a micro niche within the niche. She can lead a very good team.

And so if you accidentally put in A103, that means draft and revise. So they may reject the bill because you were not authorized.

It wasn't in the budget.

It wasn't in the budget, but the A102 was. And it gets very, very scientific in that, in that type of billing, and you just have to be super patient and super organized, to your point, with your workflow on it. Um, so, and, and What a great compliment for Nicole because it does become very scientific.

Yeah.

And I, I bet you she's at this point where she can dive into a rejected lead spill and go, there it is, there's why it was rejected.

Quick. Yeah, yeah, we found the semicolon issue we were having in one particular file that we were like, what is— we couldn't figure out why they kept getting— because that's the problem too, is these old programs that you're uploading these things into, they're not real clear. And don't be afraid to contact support. Like, she'll contact support and she'll keep contacting until she finds the right person that can help her, because sometimes it's rejected and rejected. You gotta really be well invested into trying to help your client collect money. I think that's a big piece that people forget.

Yeah.

I, I do it with a company, but I don't get involved. My, my task with them has been I'll print them out to leads and I give them to the client, and she's the one that handles the uploading and all that. But I see what happens in our firm with the leads billing that we handle, like the whole thing, like we're uploading, we're following through, we're We're making sure everything is there. And to your point, Steve, about the wrong code, I put codes in for her and I read them and I try to— sometimes I look at it like, oh, I wonder which code this is.

Which code is it?

It's kind of one or the other. And I'm really not sure by reading the bill because I only have the information on the bill of what happened. Is this actually like, did they do a mediation? Was this just a recording of the document? I mean, you have to really pay attention to the words. And also, as you're putting the words into the bill, As you're coding the bill into QuickBooks, especially like with LeanLaw, you got to make sure that the— I actually have a cheat sheet of what she wants to be inside of the bills because she knows the exact words for the exact type of leads program. So that way it gets uploaded the exact verbiage I have to have because I have to go in and edit the date of when the deposition or whatever was happening.

Right.

I have to go in and put down the invoice number, make sure that's in the body of the of the bill that I'm uploading, because then that translates over to the— to LeanLaw when she does her billing. Those words come over that way. And my daughter tried with that client. She tried to take it and upload it into QuickBooks because they have their new AI thing, because it works great with a contractor where she just uploads that into QuickBooks and it was reading the data and putting the words back in. Did not work with this client for some reason. She's still— we should have gone back to her.

I have a question for you, Linda, because I felt like you did this for us when we were setting somebody up. We had in lien law, we had you— I think you prioritized or had like a subset of lead codes, like the first ones. I feel like you could prioritize them in there or what's allowed because we were having an issue.

The right type.

Because there's certain types.

Yes. Insurance company that I work with, it's a certain set of ones that they use. You have to make sure you're using the ones that they use, and there's different types. So there's litigation codes, there's different ones you have to make sure. And in LeanLaw, you can actually select the ones that you want, and it helps you through it. Like, it's, it's great software for that. You can— you're assisted through the process. I'm not sure how— because Clio has leads billing. I'm not sure.

Yeah, every— I mean, for the most part, a lot of them do. I mean, there are programs, third-party programs out there too that you and I have—

Just do the leads.

That just do like the version of it.

But then I think it goes back to your point where Tammy tried to, you know, make that happen.

She just— yeah, she just tried to use QuickBooks upload of, you know, how you can import just like Hubdoc, but you do it inside of QuickBooks. And I've had such little success with it that I don't really use it. But she tried it because of the new AI, and it read it on the contractor invoices, but it did not read it the right way. Like, it was completely wrong. It had wrong invoice numbers. It really wasn't worth the effort. So test it with one before you like push a whole bunch through.

Oh, good point.

On these particular invoices that we got from the client, they did not read them properly. They put the wrong cases in, the wrong names in. There was a lot of wrong in it. And I said, just leave it and just go back to Hubdoc because Hubdoc worked. So Hubdoc or Dex would be great.

Don't make sense to use. You try and you try and you try and it just doesn't work.

You're asking to use a piece of— you're asking to use a feature in a software that's not It's added on to help people want to, you know, add it on here. We'll throw that in because everybody loves it, but it doesn't really do the same. It's not as robust as Hubdoc or Dext. I mean, Dext is the most robust one, you know, and you get so much more from it. So sometimes adding that software, and if you're the bookkeeper and you're like, oh, I never thought to do that, and you don't want to go back to the client to pay for it, it will pay for itself with the automation of having it all preset. So if you still have to pay for it, you'll get it back tenfold. In less time than if I had to have Tammy upload every one of them and do all that manually. It's easier.

Yeah. So all in all, in conclusion of this whole topic, you have to be dedicated, you have to be diligent, you have to have a good workflow. What am I missing here? You have to understand what you're doing.

You need to know it. Yeah. And if you get a client and you're looking into it and they're like, give me a price on how to do it. I think the best thing to do is start to research what is involved and then find out who they upload to and take a look at that too. And you can reach out to these companies. They're very good with, with support to find out what's involved there, because you don't want to go into this blindly and just think, oh, how hard can it be? You're just going to upload it.

Some won't talk to you. I'll be honest, it is a negotiated thing that the firm has to pay for. There are fees involved. And if you're not associated—

They have to pay to bill a company.

Yeah, yeah. If you're not associated. So the thing is, is to endeavor it, it just— it's a learning curve. It's— you have to have a client, you have to have conversation with that client as well.

If you're consulting with a brand new client, a potential brand new client, throw that word out there. Do you use leads billing? And see how the attorney answers you, because you're going to save yourself a nightmare if you're not comfortable with Leads billing and all of a sudden you've taken on a new client and then they're like, okay, we're ready to bill and we have to send it via Leads. You're in trouble.

Yeah, if you start to dive down the road of adding, adding accounts receivable tasks to your thing, ask them if they have practice management software, because don't be surprised if they don't. And then secondly, find out if they do, what's the type, what's the style of Billing. Is it fixed fee? Is it this, that? And then ask about leads, because that's not exactly a type of billing. It's a type of how you get the bill out to the source, and they might not correlate that as like fixed fee and evergreen and all that's totally separate. And you might want to just find that out because, yeah, if they don't have practice management stuff— We've had a client— well, no, we had somebody in the Law Lab that was like, they didn't want to pay for software. And they were trying to figure out a way to do all that leads billing on the side with another outside program. Man, does that add a lot of work to your job. It's just, that would be a hard no for me and Sarah. Like, nope, pay for the software. Don't be cheap. It's worth its weight in gold sometimes. I mean, you know, literally with LeanLaw, you just print the leads. That's it. Click print the leads instead of print to PDF, print the leads, and then you got it.

Well, there you go, friends. That is the whole thing. No, I'm kidding.

No, it's amazing we have to cram something as big as leads in this short amount of time because—

We did well. We did well.

Yeah, yeah, yeah.

It's, it's a— yeah, it's definitely something. I think it's a lot of communication with the client too, so be prepared for that. You're going to need to talk to the client a lot, and I think if you're one of those people that just doesn't want to talk to the client, that's probably not a side hustle you want to add to your repertoire of services that you sell if you don't want to talk to them, because there is a lot of back and forth, especially if there's budgets involved. You know, there's a lot of going back and forth on that, and it's a hard job. I'm— it's an invaluable skill for bookkeepers, but it's definitely a hard job that you want to— you want to make sure you have that nailed down before you dip your toes in. That's the best way to say it, right? Oh, I don't know. I wish there was a way to— I don't even know if there is a way. There's probably something out there you could go find to kind of learn about it. And there's a lot of articles. I know I've written like 5 or 6 of them on liens billing, as boring as that topic can be. But join the Law Lab if you want to learn more about it. If you're interested, we could probably go into it a little bit deeper. But yeah, it's a great way to elevate your practice if you want to go down that road. Anytime you have to bill a client for billing, Get paid a lot for it. That's my final tip. Get paid a lot for it because it's, it's a beast. It's not like adding payables.

Right.

Not even close.

It's a lot more urgency around billing, I think.

I think we all 3 have a leads headache now.

I was done a long time ago.

Were you done?

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Thank you. That was good.

I knew you'd like this topic.