The goal of UTBMS coding was to create advanced metrics for clients and law firms to achieve accurate internal measures of profitability and productivity, as well as to increase transparency for all parties involved. In a joint effort to bring more transparency to this issue, the American Bar Association, the Association of Corporate Counsel, and PricewaterhouseCoopers came together to create a unified task-based billing standard known as UTBMS. Imagine trying to make sense of legal spending bills that included only a vague description of services by multiple timekeepers in a single day, or evaluating multiple paragraphs or pages of task descriptions. The increasing prevalence of UTBMS codes arose from corporate legal departments that were purchasing large quantities of legal services looking to closely monitor invoices and services from outside counsel and vendors. This, in turn, allows for greater data analysis, reporting, and fact-based decision-making. Associating these codes to time and expenses entries in invoices shows clients exactly where and how lawyers are providing legal services. UTBMS creates categories of specific legal tasks and expenses and assigns specific codes to such task and expense services. Since their introduction more than 20 years ago, the utilization of Uniformed Task-Based Management System (UTBMS) billing codes have allowed both clients and law firms to track and compare specific legal services and expenses and map these data points to particular outcomes.įor those who might not be familiar, UTBMS codes classify legal services and expenses performed by a law firm or other vendor. A Brief History of UTBMS Codes and LEDES Invoices This chapter explores how organizing billing data into a standardized system like the Uniformed Task-Based Management System (UTBMS) allows law firms and clients alike to improve their financial performance.
Nevertheless, the 2018 Industry Outlook report by Major, Lindsey & Africa finds that as law firms expand their use of various solutions, they often miss an opportunity to optimize profits by evaluating their own billing practices to increase profits and productivity. The reason is that data-driven solutions allow firms to gain real-time insights in order to make better business decisions and improve their bottom line, without simply raising hourly rates. This continuing trend demonstrates the ongoing problem of achieving profit increases solely through billing rate increases – that is, raising the hourly rate does little good, if the client pays fewer of the hours billed.Īs a result, data-driven solutions are becoming a beacon within the legal profession. According to the report, although most of the many law firms participating in the survey increased billing rates at different levels, “clients continued to push back on rate increases, keeping pressure on the realization rates that firms were able to achieve”.
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