Why Modern Billing Guidelines are Crucial
This is the first in a series of posts based on our whitepaper, “Legal Billing Guidelines in the Age of AI.” In this post, we cover why billing guidelines are increasingly important for modern legal teams.
With the advent of legal AI tools, legal teams are under increasing pressure to find efficiencies and save money. Like other departments, they're expected to operate with lower costs, increased predictability, and more data-driven insights. Often considered “cost centers,” the drive to "do more with less" is ever-present, a pressure likely to only intensify as AI becomes more capable and executive expectations for streamlined operations increases.
This is where modern billing guidelines come in. Forget the old view of guidelines as just a restrictive rulebook. Today, they are essential strategic tools. Well-crafted guidelines establish clear expectations, create frameworks for data collection, and foster a more collaborative relationship with your law firms.
Think of them less as rigid constraints and more as a shared understanding of value, efficiency, and strategic alignment. Modern guidelines help address key challenges:
Controlling Costs: They set reasonable guardrails around billing practices, helping reduce unnecessary expenses.
Improving Predictability: Clear guidelines contribute to better budget forecasting and early identification of potential overspending.
Enhancing Collaboration: They open the door for better communication and partnership with outside counsel.
Freeing Up Time: By setting standards and leveraging technology (like legal spend management software) for compliance, guidelines can reduce time spent on manual invoice review, allowing your team to focus on high-value strategic work.
While the default position for many smaller or growing teams is that billing guidelines are just for big legal teams, none of the considerations above are constrained to large teams. We encourage legal teams of all sizes, from solo GCs and up, to consider developing and rolling out guidelines. Guidelines do not have to be draconian to be valuable to your team and organization.
In the age of AI and heightened efficiency demands, robust billing guidelines aren't just nice-to-have; they're fundamental to effective legal spend management and demonstrating the legal department's value.
For a comprehensive guide on creating your billing guidelines as well as our sample billing guidelines template, see our Legal Billing Guidelines in the Age of AI.