Uniform Task-Based Management System
Background, Definitions, Principles and Assumptions
A. Background: The Need
Until the past decade, law firm billing was relatively straightforward. Firms billed their clients in greater or lesser detail, typically providing in-depth narrative descriptions of the tasks and processes underlying their hourly charges. In issuing bills and providing the underlying detail, each firm followed its own approach. In recent years, however, clients have become more focussed in requesting additional billing information of their outside law firms, or asking that billing data be presented in specific formats. In some instances companies have wanted to analyze their costs along various dimensions to provide benchmarks for the more systematic evaluation of legal costs. In others, there has been a desire to develop a database of costs on discrete legal activities. Most of these efforts have been part of an overriding effort to manage corporate legal expenses more effectively by considering inside/outside mix, comparative performance by attorneys and firms of discrete activities, and other aspects of cost.
As a consequence of these trends, many law firms' administrative organizations are faced with the challenge of complying with a broad range of specialized billing requirements - each unique to one client. This situation already poses a substantial burden to a number of firms. As law departments expand their use of "task-based billing" and broaden their efforts to manage outside legal costs more effectively, firms face the prospect of overwhelming complexity as they strive to comply with the various requests of dozens of clients. Ultimately, law departments will be burdened by different law firm coding structures and billing systems.
Aside from "need" narrowly defined, there are significant benefits to both law firms and law departments in terms of administrative simplicity and cost reduction to be gained from standardization. In addition, the development of standard billing categories will permit introduction of billing based on Electronic Data Interchange (EDI). This technology is already widely employed in other areas of commercial activity. By linking the suppliers and consumers of legal services, EDI offers the prospect of "paperless billing" and a new level of administrative and cost efficiency.
The need, therefore, is for a uniform set of billing and task categories - detailed describers of legal work that would be acceptable to both law departments and firms, and that could prevail across American industry, financial services, and commerce. Analogous to the role of standards in other industries and functions, standard billing categories would make it possible for law firms to standardize their billing systems and for corporate law departments to work with their law firms in a far more efficient manner than prevails today.
Following is a glossary of terms that will be helpful in understanding the Litigation Code Set.
- Coding set/coding scheme. A list of alphanumeric codes and corresponding terms and definitions that describe the universe of legal work in a given area.
- Field. A specific, defined category of information that is entered into an information management system or database.
- Area of law.A label describing a discrete area of legal practice or specialization. Examples include real estate, intellectual property, and environmental. The group envisions that each department and firm would define these as appropriate.
- Matter type. This designation describes or categorizes a specific legal services project for purposes of analysis and reporting. In most cases, matter types are more detailed than areas of law though for some specialized areas of law there may not be a more detailed listing of matter types. For example, a litigation case might be categorized as an antitrust, environmental, international trade, etc. matter.
- Phase. This is the highest level category in the coding hierarchy. For litigation, examples are Pre-Trial Pleadings and Motions, and Discovery. Phases represent collections of tasks and activities that occur largely in a sequence during the course of a case or matter. Typically, timekeepers will enter time at the task level, but phase-level time entry will also be permitted. This might be useful in smaller cases in which task-level detail is not needed.
- Task. This represents more detail under the phase level in the coding hierarchy. All tasks roll up to a phase. Tasks are intended to capture tangible work product produced or business results achieved. Tasks (or phases) are one of two fields to be recorded by timekeepers.
- Activity. This is a code intended to describe how work is accomplished (e.g., communicating, drafting). Activities represent the second field to be recorded (optionally) by timekeepers.
The following list of guiding principles has informed the development of the Litigation Code Set. These principles emerged throughout a number of meetings held during 1994 and early 1995 and discussions of the various options under consideration.
- Support of business objectives and processes. A primary, recurring consideration has been to focus on the purposes and uses of standardized coding. A number of business objectives and administrative processes that should be supported by the coding scheme were identified. These include planning and budgeting, time entry, status monitoring and reporting, bill preparation, electronic transmission of bills and payments, bill review and analysis, development of alternative financial arrangements, and practice and profitability analysis. Consistently, the group returned to the question: How are we going to use the data to be tracked?
- Simplicity. The Litigation Code Set must be simple and straightforward to ensure widespread use. This includes limiting the total number of codes to a manageable level. The team consistently returned to this fundamental principle as it explored a wide range of alternatives, which frequently suggested more detailed coding schemes than we developed.
- Ease of use. In practice, the Litigation Code Set should be easy for attorneys and other staff to use. The codes should be intuitive and capture an attorney's logical work processes.
- Suitability for all size offices. Currently-available technology will be an important asset in the efficient implementation of the coding scheme. Still, the group has assumed that not all law offices will have advanced technology solutions at their disposal to facilitate the capture and analysis of time. For the coding scheme to be used widely, law offices and attorneys must be able to use the codes in a manual fashion.
- Avoidance of multiple interpretation.. A primary concern with some existing code sets is the multitude of ways in which a single time entry can be coded, depending on individual interpretation. The codes should minimize opportunity for multiple interpretation.
- Flexibility to track both tasks and activities. Some team members value the ability to analyze work according to categories of activity (e.g., communication, drafting) in addition to task (e.g., deposition). Others emphasize the importance of tracking and analyzing the level of effort expended to complete tangible work product, segments of a case, or defined business objectives. For this group, simply using task codes is sufficient. As an option for those seeking activity detail, the System permits firms and departments to code activities separately from tasks.
Following is a list of assumptions that guided the development of the Litigation Code Set. These assumptions were drawn from discussions during initiative meetings.
- The fundamental coding structure has two fields: tasks (embedded within phases) and activities. Whereas task codes track time associated with tangible work product accomplished (e.g., motion, deposition), activity codes describe how the work was performed (e.g., communicating, drafting). Not every law office will wish to use activity codes, but the coding scheme is flexible to accommodate those who value activity analysis. The team discussed the desirability of coding at a lower level below task. In the interest of simplicity, though, this additional detail may be captured using narrative rather than adding more levels. This experience was borne out by those team members with direct experience coding time.
- Narrative time entries will be retained. The Litigation Code Set does not envision the elimination of narrative descriptions of time entries. However, the need for this level of detail may be educed in smaller, less complex cases with successful adoption and implementation of the coding scheme.
- For purposes of tracking and analysis, a matter type code distinguishes among various types of matters. A matter type designation can be used to distinguish among various types of litigation and to identify alternative dispute resolution matters.
- The Litigation Code Set focuses on meeting the requirements of most matters. The Litigation Code Set has been designed to be suitable for use with most matters. However, there may exist cases of such size, complexity, or other unique characteristics that the codes are not sufficiently detailed. The objective was to develop a code set for the vast majority of cases and to provide a framework in which more detailed codes can be developed for extraordinary cases.