6/30/14

The Value of Task Codes?

Previously I have ranted about how billing task codes are not magic pixie dust. There seems to be a broad perception that task codes will solve pricing and legal project management problems for all practices. "If we only had task codes for [insert type of work], we would know how to price this."

My general feeling is that A) the task codes were not designed to address this need. B) The use of task codes is highly inconsistent, so the data is poorly structured. And C) Even if the data was in good shape, it won't provide magic pricing and budgets.

Recently I was ranting on this subject with a friend who works in the e-billing space. I was especially going off on how the task codes were not intended for solving the pricing problem. The e-billing person made an offhand comment about the current state of the use of task codes for their actual intended purpose. This got me thinking. So I checked the task code web site to better understand the actual intent of the development of task codes and the need for a standard set of them.

There was not much about intent, but here's what I found:

In the mid-1990’s major US law departments and insurers wanted to better understand the services provided by outside counsel. 

As part of this effort, it was decided that electronic invoice time entries should be task-based and aggregated by type of work performed, resulting in the possibility that multiple time entries could result from the services performed in a single day on a matter. 

What occurred to me is that the task codes have not even met the original purpose. My e-billing friend's comment centered on the fact that clients use their own unique task codes and that lawyers need training in order to get effective use of them. And we know how often lawyers go to training. Rarely.

I read Outside Counsel Guidelines (OCGs) on a regular basis and keep an eye out for things like task codes and their use. Just last week I read one where they do not even use 'L" codes. They have their own letter.

What I see is very inconsistent use of task codes by clients, compounded by inconsistent application of the codes by law firms. Result: Serious questions about whether task codes have even met their intended purpose.

Yet somehow task codes are poised to solve a problem they weren't built to address.

Good luck with that.

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5 comments:

Amani Phoenix said...

Yeah its a good article. According to you what we project managers do is communicating. And a lot of this communication is done during project meetings. It can sometimes feel like you are running from one meeting to another and that your time is often wasted. Meetings don’t start on time, the issues aren’t dealt with, there is no agenda, there is no focus, nobody assigns any follow ups or tasks and of course then they also don’t end on time. An efficient project manager is required for the good management of a project. I think a project manager should PMP certified. Looking forwards to apply what I learned in PMP classes in my company.

Unknown said...

Toby,

Spot on. Many Attorney's rely on their secretary to add the appropriate code. Litigation will be coded with a project code and Counseling with a litigation code.

Howard
McKenna Long & Aldridge

Michael Byrd said...

One of the reasons task codes have been less than useful is that there has traditionally been little or no view into the output or reporting from their use by the typical lawyer or even the billing partner (i.e., it's all data yet to be turned into useful information). This is shifting somewhat from the outside counsel perspective with the advent of some "big data" applications (e.g., TyMetrix Legal Analytics, Sky Analytics, etc), but it's still invisible to the typical lawyer within a firm.

I have struggled with this topic for several years now and agree that there is little utility within the current construct. That said, my gut tells me that there is an opportunity here. If firms can find a way to leverage their use when required by clients with, say, internal budget tracking by major component of an engagement AND providing transparency into that budget for their working timekeepers, then maybe, just maybe, the quality of the data will improve generally and outside counsel can legitimately claim progress in project management while meeting their clients' e-billing requirements.

Matthew Petrich said...

I am really surprised that we are having this discussion now. The task codes were developed to give insight into what was being billed from the law firm to the corporate law department. That's it. Nothing existing then and nothing that I know of today, does a better job of what the codes were originally designed to do. While an individual code set can be used in its entirety, again, that was not the idea. The goal was to have a corporate's outside counsel billing guidelines include code combinations that the law firm would utilize. Many times to gain agreement on the accepted code combinations, meetings between corporates and law firms would take place on a yearly basis to discuss billing practices and such, all of which made for a better relationship between the corporate and the firms on their "approved" outside counsel list. The electronic billing system would then validate that combination and at that point, the corporate would have a good idea of what time/money was being incurred by specific task. Regarding analytics, there has been much done in the area of reports and analytics that are driven from the code sets. When our team created UTBMS and LEDES we also did reporting seminars all over the country to discuss the best ways to report on the data and to create KPI's and metrics that were extremely useful in the management of outside counsel and to determine outside counsel efficiency along with an outcome analysis of how well outside counsel performed to achieve the desired litigation outcome. Ideas like Legal Business Intelligence (data mart and a set of metrics used as a key piece of outside counsel evaluation) were used 10 years ago in numerous, large, class action matters. Today, applications like TyMetrix Legal Analytics are trying to push that analysis further. No one is saying that any type of "Big" data analysis is always simple and straightforward, but when used properly, the codes set can provide an excellent data pool to create KPI's and benchmarks that should be part of any comprehensive outside counsel management program.

Steve Lauer said...

Having served on the task force that developed the UTBMS (as the sets of codes were eventually christened), I can say that they were not intended or designed to solve a pricing dilemma. They were intended to provide law departments (and business clients generally) the ability to understand more fully what legal service was performed on their behalf and for which they were billed.

Did they accomplish that goal? I believe so and have experience to back up that opinion. After the codes were promulgated, I assisted in the development of a proprietary e-billing and invoice-review software that the law department provided to the law firms engaged by the company for most matters. That software enabled me to review the invoices by displaying the billing data in various ways (e.g., by timekeeper, by task, etc.). Looking at the disparate displays of the same data illuminated relationships among the entries that likely would have escaped the attention of even the most assiduous reader (the invoices easily included ten to twenty pages of small-font computer entries in hard copy).

Did I ever reduce a bill after reviewing the data? No. Did I better understand the work that was done and by whom? Yes. Was the service less expensive than it otherwise would have been? Probably, because (i) the firm could review the data in a similar fashion and thereby manage the work more carefully and (ii) the firm knew I was able to analyze the date more fully. I wrote an article that appeared in ACC's Docket (it was ACCA then) that included some screen shots from the system to demonstrate the benefits.

 

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