What do you do if your client requests a LEDES file? What is a LEDES file? How do you make one? What do you do with it after you’ve made it?
Understanding LEDES
LEDES, sometimes called “E-Billing”, stands for Legal Electronic Data Exchange Standard. It was designed as a standardized format for legal bills to be submitted to LEDES processors. In theory, it’s a way to streamline the billing process.
The file itself is a simple text file. It is formatted as a series of data fields separated by pipes (the “|” character) — such as “Description”, “Timekeeper ID”, “Time Spent”, etc.
What Are All These IDs?
The first thing you must do to get a LEDES file just right — and you must, or the LEDES processor will reject the file — is assign all of the required ID numbers. Your client, your timekeepers, the matter, and even your law firm itself all have to have unique ID numbers.
There’s nothing special about these numbers. They can be simply made up by you and assigned to each client, timekeeper, and your law firm. Usually, a client will already have their own ID, which they will provide to you to use for their LEDES invoices. You do not need to assign an ID to every client — only the clients that require LEDES invoicing.
Also note — when entering your Timekeeper IDs, you’ll need to assign each one of them a Position, such as Partner, Associate, or Legal Assistant. LEDES invoices require all Timekeepers to be classified by position.
UTBMS
No, I didn’t just sneeze. UTBMS stands for Uniform Task-Based Management System. And LEDES requires that all entries be in this format. What that means is that all tasks and expenses you bill to your client must be chosen from a pre-designed list of “coded” (numbered) options.
Your billing software should have an option to use UTBMS (often called Task Codes). Look for an option called LEDES or Task Code Billing in the Matter Settings. Once you’ve enabled this, entering tasks will require you to select from a list of categorized entries.
How Do I Make a LEDES File?
Your billing software should offer an option to create a LEDES file. Simply enter your time and build your invoice as you always would, and then when it comes time to create the invoice, look for an option to create a LEDES file. Sometimes it will say “1998B.”
A good billing system will also warn you if there are issues with the LEDES file — missing ID numbers, incompatible characters used, etc. Once the LEDES file has passed verification in your billing system, it will be generated as a simple text file in the LEDES format.
I Have a LEDES File. What Now?
Usually, your client will request that the LEDES file be submitted to a website that will process the LEDES file. They act as a kind of intermediary between you and the client. The LEDES processing service will verify that the invoice is correctly formatted and all required information is included, and then it will forward the invoice details to your client so that they can then pay their bill.
This Seems Like a Lot…
It’s a bit of a hassle at first — mainly getting familiar with the UTBMS and knowing which item to select for the task performed.
After a few minutes of initial setup, creating LEDES invoices will become very simple. Learning how to use the LEDES processor website might also take a few minutes. But once you configure your LEDES ID numbers in your billing software, start using the UTBMS list, and know where to upload the LEDES file, it should only take an extra minute or so for each invoice.
The Final Checklist
Before submitting your LEDES file, be sure you’ve completed all the required steps:
- Create and enter a Law Firm ID in your billing software.
- Create and enter IDs for each of your Timekeepers and assign them each a Position in your billing software.
- Enter the Client ID into the Client Settings of your billing software (this ID is usually given to you by your client).
- Enter the two Matter IDs in your billing software’s Matter Settings.
- Make sure your matter entries are created from the UTBMS list.