In this tutorial, Linda Ardesani of Ardesani Accounting introduces the Legal Electronic Data Exchange Standard (LEDES), a uniform invoicing format used by law firms, especially in practice areas like workers' compensation, bankruptcy, and corporate matters. She outlines LEDES’s origin in 1998, the most common 1998D version, and its pipe‑delimited 24‑field text structure. The video explains the various code types—activity/fee, expense, and timekeeper codes—and how they map to specific legal tasks. Ardesani then demonstrates how to configure LEDES billing in the LeanLaw practice‑management system, including enabling LEDES for a client, selecting appropriate code sets, and setting client‑specific defaults. She shows the process of generating a LEDES‑formatted invoice, exporting it via QuickBooks, and uploading it to platforms like LegalTracker. Practical advice is offered on requiring codes at entry to avoid rework, troubleshooting rejected files, and leveraging software converters (e.g., Clio). The tutorial concludes with resources such as the Accountants Law Lab Facebook group, a mastermind community, and an invitation to contact her for bookkeeping services. The overall tone is instructional and supportive, aimed at bookkeepers and accountants working with law‑firm clients.
Chapters
Hi there, Linda Ardesani, Ardesani Accounting. As promised, this week we're going to speak about that specialized invoicing that law firms use called LEDES. So it's L-E-D-E-S, and it stands for Legal Electronic Data Exchange Standard. L-E-D-E-S, another acronym, right? We have lots of little codes and acronyms when we work with law firms, and LEDES is one of them. And you could probably work at a law firm the whole time and never have to do leads, but depends on the type of law firm you work at. You'll see leads typically at a firm that deals with workers' comp claims. You'll see it with a bankruptcy law firm. These are different practice areas. You'll see it at a law firm that maybe works with large corporations. So the corporation itself, like for example, just, just for example, Microsoft. So if your law firm works with the company Microsoft, then they're invoicing Microsoft for legal services. They may ask for the form, the, the invoice to be produced in a leads format. And just so you know that that's one of the ways that you're going to be able to understand why that is. It's done for that purpose. So Microsoft may do business with 50 different states. They want the formatting to be the same. And if you work at multiple law firms, you'll know a lot of the invoices look different. There's choices that they can make when they do the formatting, and it's sometimes a personal preference, but when it comes to Leeds, it's uniform. So that's the reason why companies will go for that particular look of the invoices. So you are going to learn a little bit about that here today and how that works. So basically, it was in 1998 that they released the first version of Leeds billing format, and it typically is just a widely accepted, uh, industry standard. And it greatly reduced the need for law firms to educate their clients on billing practices. It just said, this is it. It's almost like a template per se. But if you think about how it looks, it looks like computer code and it's actually just a lot of shortcuts. And once you figure out how it works, it makes sense when you look at it. But the first time you print something out in Leeds, you look at it. I can remember saying, this looks like gobbledygook. I couldn't even make sense out of it. But once you figure out how it works, you bill exactly for what the firm did. So the clients are going to see exactly what their tasks or expenses that they're paying for. It's very uniform and standardized in the, in the invoices itself, and it will protect the law firm by requiring them to have information that is readily acceptable— accessible. So it— one of the things I like about it is it keeps the attorneys fixated on specific tasks, and the tasks are by code. So you, once you learn the code and the formatting of it, it makes a lot of sense. So you don't have to waste a lot of time and resources trying to adapt to any new standards. And this particular LEED, the one that's most popular, was created and released in 1998, but then they've, since then, they've kind of worked through a few variations. So when you start to look at different billing, time and billing software, most of them are done with the 1998d version because that's the most popular one that you'll see. So if you have to upload these forms, it gives out a— it'll spit out a report basically, or the invoice itself, and it's just a pipe-delimited plain text file and it has 24 fields on it. And there's been some newer releases of LEEDs as well, but more standard is the LEEDs 1998d version. And then once you see it, you're going to know that these are set up to Track just the activities or tasks that are required in, for example, a bankruptcy. There's a specific set rules that go along with how that would happen or how that would go down, our typical bankruptcy or even litigation. You'll see this with a trademark attorney as well. And again, that legal— that workers' comp insurance is also one of the leads tracks. So trackers, and then they have activity codes. So Sometimes they're called fee codes, and it's information to add into what specific actions that the attorney's performing. So basically, and you'll see it when you start to look at the codes, a lot of good software will have those codes built right in. You just select the ones you need. So if you're working with a bankruptcy one, you're only going to probably pick the ones that start with the letter B for bankruptcy. L is the litigation ones. That's how the coding is. It's really simplified, but And once you start to do that, and E is for expense codes, so the expenses would all get tagged as well, and that'll all push into that invoice so that it gets printed out. There's some timekeeper codes too that you will see on invoices in addition to the other things. So the task code and the fee code, you might see both. And then of course the rates and the hours, and that will all get pushed out. I'm going to share my screen and then I'm going to take you into when we come into the task of showing you how it's set up in LeanLaw. I know we actually just went through LeanLaw settings and it's part of it, but in case you just landed here because you Googled Leads billing and you wanted to know what it is, I'm going to take you through it in the— through the LeanLaw lens. There is also— Clio has the same thing that you can look at it through Clio. It's got like a converter that will convert an invoice to it. It's basically what LeanLaw does too. It just does it kind of in a different way. It looks like you're printing to Leads. Where Clio will actually say it's converting. And with LeanLaw, it's just all the settings. And I'll just show you, I'll take you to that program and show you what it looks like. So as we come in here, we're now in the settings section of our demo law firm right here on the right-hand side. So you can see that it's the gear and it brings you in here. And then I'm going to take you right over to leads. You can see it right here on the side. So you can pick the ones depending on your law firm of what they need to use. You can see there's Microsoft Tasks and expense codes. There are Expert codes. So if you have expert witnesses, if that's the kind of firm that that you're working with, patent and trademark. If you work with a trademark attorney, you'll see those codes. Litigation and standard activity and expense codes. So this is all in here. Makes sense, right? In court, you can use these court ones. And then if you're going to start to do that in Lilo, you have to actually mark the client as a leads client, and that way you can have the codes. And then of course, like I mentioned, you can make it so that they have to put the Enable Leads Billing is here. You have to turn it on. And then once you turn it on, you're actually selecting the ones that are used. And then you can put in the codes for the classification. So I can actually put in a code specifically for the principal attorney, the lead attorney. And that way, maybe they have to have a specific code on the program that they're uploading to. We'll put the code in here. It will come out on that invoice when we print an invoice. And if there's a law firm ID file, you want to do that here as well. Tax ID and default invoice. Description, if the Leads formatting for the person that you're doing the billing with requires this, you want to put this in. It's going to save you time when you go to do the work. I always call it kind of arts and crafts. If you go to upload it and something's not right in the find and replace, it's kind of what you're doing. You're kind of piecemealing it together. So I'm going to come over to— let's go to Billing here and let's go to QuickBooks. So I've got one invoice here not paid by Mariette Martinez. And you can see that with Leads, I've enabled Leads on her file. Actually, let me show you that too. So let me go to the client, Mariette. So here she is, and here's her matter, Estate Planning. And then when I go to the Leads tab right here, I can enable the leads for this client. Once it's enabled, I can do it right here. I can pick— you can see the leads formatting is here, and they actually have a dropdown. You can change it to whatever one that's necessary for your client, which is really flexible. Any settings specific to this matter you want to put in here, because if you do leads billing with different— with a bigger law firm, you're going to see that it might be personalized settings for specific clients that are different than other clients, especially if you work with a law firm that works with really big corporations. They may use different legal tracker programs that you log into different ones. You really want to have that ability to be able to put the numbers in specific to this client to save you from having to do the arts and crafts and cut and paste. You can do this right here. You can put it in just for this client. Require the activity codes so that whenever the attorney tracks time, they're going to have to put the code in. Require the task codes and require the expense codes. I like to do that so I'm not having to go back because they could be in a hurry adding, adding the time in, but then I have to go back in and add the codes when I go to do the billing. I might push the bill all the way out, print it to leads, upload it in LegalTracker, and then the next You know, in an hour I find out you're missing a code on line 7, and then I'm like, oh, she, she or he forgot to put the code in. Then I have to go back and undo the invoice. There's just a lot of steps you can avoid by requiring it there. So let's go back now to billing and let's go to QuickBooks. So here's my invoice and I want to print it to leads. So you're probably going, how do I do that? Well, very simply, I can come over here, select the invoice, and then it says deliver. And I want to deliver it in Leeds format, and it's right here. So I'm going to show you how it can kind of look like gobbledygook. So here's my text invoice here. I'll bring this over here, and you can see invoice date, invoice number, matter. You can see how this kind of just pops out, and the computer reads this, and you can see that it reads it very quickly. So this is the reason why it wants to be— needs to be in this format. You can see it's in the format Leeds 1998. B. I think I mentioned D before, but B is the most popular one for 1998, the very first version with those tax task codes. And so you can see the activity, the timekeeper line, all of that's here. And then you would upload this onto the platform that you're bringing the invoicing in on. So really simple, you just click and then upload the leads invoice. And it's very easy to do. But it's also a little tricky. So when you first start doing it, it's a little bit like, oh, I don't know how to do this. So for sure, you want to Find a software that does things to— produces an invoice and leads. Make sure the setup is right. Ask the attorney, what, what are we doing here? What kind of codes are required? And then if they, if they say to you, I need it to go into, for example, LegalTracker, because that's the one that comes up in my brain first, go to LegalTracker and scope it out. Get in, get a user ID so you can upload the invoices and then read what they have. They're very good on those sites and they're very helpful if you have to call. the help support on those sites, they'll help you get through your first leads billing and uploading and getting it processed. They're very, very responsive when it comes to that, and they'll tell you exactly what's missing on the file and what needs to be done as you pull it in. If it gets rejected, it tells you why it's rejected. It'll tell you what line it's rejected on, so you can actually go through the line. And if it says invoice number in incorrect format, you'll know that that's the part that's not working. So I hope that helps. Short video, but hopefully that will give you an idea of how leads billing works. And of course, if you have any questions, comments, feel free to reach out to me. We have an amazing Facebook group called the Accountants Law Lab, Accountants with an apostrophe Law Lab. If you want to join us, you can ask questions there. We have a private group, a mastermind group. If you're a bookkeeper learning how to do this stuff, Come join us there and we discuss leads billing as a topic sometimes. And if you— or even open forum, we can ask any question. If you're an attorney and need help with your bookkeeping and you need someone to process these leads bills for you, reach out. Yeah. Please hit the subscribe button to not miss any videos and we'll see you all next week on the— Please, if you want to continue getting the videos, just click the subscribe button and you won't miss one. Thank you for watching. Bye now.
