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Q:
What is the value of UTBMS codes in legal spend
management?
Answer: The
Uniform Task-Based Management System (UTBMS) is a comprehensive budgeting and
billing classification system designed to provide clients and law firms with
meaningful cost information on legal services. The value in using the
codes couldn't be simpler - it normalizes data useful in planning, monitoring
and analyzing legal costs.
The well-defined UTBMS litigation code set is used today
by many of the largest corporate legal and insurance claims departments to
assist in developing a comprehensive budget for each matter, tracking costs
against the budget, and comparing results of similar matters through a series
of task, activity and expense codes. By simply appending invoice
line-item descriptions with a common four-digit UTBMS code, legal departments
can quickly assess case costs by phase (e.g. L300 -Discovery), or by more
detailed cost drivers (e.g. L330 - Depositions), regardless of how each law
firm describes their own activities.
Primary Benefits
There are three primary benefits to using the UTBMS code set to standardize
billing entries in a legal spend management practice:
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The UTBMS codes, and in particular the Litigation Code
Set, provide an excellent framework for establishing a case budget. A
proactive approach to planning for and monitoring expenses is an effective
strategy for eliminating runaway over-runs and billing disputes.
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Rules driven e-billing systems that read and analyze
both UTBMS codes and text descriptions yield more accurate bill review results.
Many text-only rules engines often take descriptions out of context and
send out false positive warnings to a bill reviewer. Comparing an invoice
entry against keywords or phrases and aligning it against a standard code
offers greater flexibility in the bill review process.
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Aggregating historic costs by UTBMS codes enables
comparison of similar matters, or firm-to-firm comparisons of law firms working
on like matters within the same geographic region. Having a benchmark
from which to compare costs helps legal teams to manage current cases more
effectively, and allocate work to the most efficient firms.
While every major time and billing system has standard
e-billing and coding capabilities, using the UTBMS codes is not without its
challenges. Improper application of codes has been an issue where clients
have not taken the time to educate their firms on the importance of data
integrity and proper code use. Some e-billing vendors are equipped to
assist in-house legal teams with their education program, and to reinforce
program guidelines when dealing with the firms.
Additional Resources
There are several good resources available to assist in the introduction of
UTBMS codes including a recently released update to the Litigation Code Set
detailing the tasks associated with each code. Make sure outside counsel
have this documentation and the companion
UTBMS Code Set with Practice Tips. While the codes themselves are
straightforward, some firms may tend to combine entries into catch-all codes
(e.g. L190 - Other) as a way of complying with the client request. Use of
the new code set and technologies that block unwanted codes will remedy this
situation.
Set your expectations early and let the firms know that
part of their performance evaluation rests on proper use of the codes. Show
them how time spent, and the costs associated at both the phase and task level,
will be used to compare one firm to another. This will help emphasize the
importance of coding integrity and the potential impact on your business
relationship.
Also, you'll want to instruct your own internal
reviewers to periodically check on coding accuracy. Overuse of a
particular code is potentially a sign of misalignment between the description
and the code, and may require you to give some further guidance to the
firm. A report outlining the distribution of hours and dollars by code is
a helpful management tool in identifying possible inaccuracies.
Lastly, some in the marketplace have downplayed the
importance of the UTBMS codes, or dismissed them altogether. While they
certainly are not a mandatory requirement for a legal e-billing program, the
experience of our clients has shown the codes enable a level of data
intelligence unattainable by simply relying on text descriptions from an
invoice.
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