IMPLEMENTING E-BILLING ON AN INTERNATIONAL SCALE

Transcription

1 IMPLEMENTING E-BILLING ON AN INTERNATIONAL SCALE Executive Summary Electronic billing solutions enable corporate law departments to produce sophisticated, up-to the minute, enterprise-wide reports for virtually any type of legal expenditure The ability to access rich data visualization, including summary tables, dynamic graphs, and metrics monitors that deliver at-a-glance information helps senior management analyze and better control the company s legal spend Law departments looking to implement e-billing on an international scale face a number of sometimes complicated issues, including different currencies, country by country regulatory issues, tax and tax jurisdiction issues, and internal auditing procedures If legal department satellite offices are already accepting and processing paper invoices from law firms outside the U.S., the internal expertise needed to map and automate the invoice review and payment processes is likely already in place Once the processes are automated, e-billing systems deliver immediate ROI by eliminating duplicate invoices and making it easier (and less expensive) to monitor and enforce billing guidelines and to track invoice approvals on a global basis Features like multi-currency, VAT support, and budget collaboration all work in concert to deliver what matters most: a global view of the department s legal spend, including outside counsel performance, the substance of the work performed, and the value received MITRATECH HOLDINGS, INC. ALL RIGHTS RESERVED. 1

2 INTRODUCTION When it comes to electronic billing (e-billing), whether domestic or international, there is no such thing as one size fits all. Every company or law department has different needs and its approach to e-billing will also be different. With the global marketplace continuing to expand, an ever-growing number of enterprises are looking to reap the benefits international electronic billing has to offer. To assist law department managers looking to transition to international e-billing, Mitratech recently spoke with An Trotter, Director of Legal Administration at New York City-based Viacom. As a major global entertainment company, Viacom s brands include Paramount Pictures, MTV, Nickelodeon and BET. Viacom s corporate law department comprised of more than 200 attorneys located in 25 offices worldwide went live with Mitratech s TeamConnect matter management and e-billing solution in the U.S. in In 2011, it introduced the system to Viacom International Media Networks Latin America, which includes Argentina, Brazil, Mexico and Colombia; Viacom International Media Networks in the United Kingdom; and Paramount Pictures International, which has offices in London, Paris and Amsterdam. As was the case with the U.S. roll-out, Viacom wanted to ensure that its international offices use TeamConnect and the e-billing module, TeamConnect Collaborati Spend Management (CSM), to: Follow the legal Delegation of Authority (DOA) and company Terms of Engagement (TOE) for all legal services vendors Review invoices against the TeamConnect CSM rules engine to ensure compliance with Viacom s prenegotiated billing guidelines Leverage the TeamConnect CSM legal spend data to centralize law firm rate negotiations, corporate-wide More accurately forecast spend on an individual matter and volume basis Access spend and matter data in real time to facilitate pro-active matter management FIRST STEPS WITH INTERNATIONAL E-BILLING Regardless of the company, there will be a variety of country-specific processes to be incorporated. Most offices outside the U.S., for example, have value added tax (VAT) or similar billing procedures. Others must comply with local regulations that allow electronic billing but require the law firm to submit a paper invoice as well. Some face both. What follows are some guidelines to consider when implementing e-billing at international offices. Step 1: Assess knowledge and expertise within international offices The first step is to determine whether the knowledge/expertise you need to help establish e-billing in each international office or jurisdiction is already in place. The answer is likely yes. There are many questions to consider when a law department begins thinking about taking an e-billing solution international, such as, What do we need to know about the countries we are working in? What are the currency, tax and compliance requirements? Should we create an implementation team to determine what the requirements are and then determine how to meet them? Fortunately, most law departments quickly discover the company already has accounts payable personnel in place often in each of the countries in which it operates who are already processing legal bills outside of TeamConnect CSM and in full compliance with the local laws. In other words, if you re already processing international invoices manually, you can process them electronically. Step 2: Introducing e-billing to overseas locations Having already implemented TeamConnect CSM in the U.S., Viacom knew the system could be configured to electronically replicate any existing law firm billing processes. Therefore the initial step involved working with each international office, gathering the involved parties together and mapping processes already in place. Viacom began by creating local implementation teams that included not only key legal staff, but also representatives from the accounts payable, financial planning, internal audit and information MITRATECH HOLDINGS, INC. ALL RIGHTS RESERVED. 2

3 technology (IT) groups. Each group s processes were mapped in as much detail as possible. To defuse any potential push-back, the U.S. implementation team initially emphasized TeamConnect CSM s ability to replicate existing procedures. This went a long way to securing the necessary buy-in, resulting in client groups approaching the system with open minds. People in field offices have their own processes and procedures in place. Because TeamConnect is so customizable you don't have to accept it straight out of the box. That was key because we were able to sit down with the local representatives, map their current processes and accommodate the different work groups, Trotter explains. Step 3: Meeting country-specific billing requirements Though 100 percent of Viacom law firms bill electronically, invoice submission, review, and payment processes are obviously dictated by local regulations. Despite the differences among countries, though, Viacom was able to move closer to its ultimate goal: to have all of its global legal spend data in a single, easy to access database. Step 4: Implementation/Training Viacom recommends taking a personal approach to the implementation/training period. Where feasible and cost effective to do so, going in person to launch the implementation process made a big difference. Meeting the people face to face so that they know who you are and that you re here to help them made a tremendous difference, Trotter says. We handled the training the same way. Even though we could have done it solely via a webinar, we stopped by each person s desk to see how they re doing, help them log on and show them how to work with the system. That made a huge difference in the rate of adoption. U.S. representatives helped each office bring their law firms onto Collaborati (the law firm portal for e-billing). Further, legal billing managed the law firm rate review and approval process and input the approved rates in TeamConnect CSM so invoices could be submitted by local firms as soon as the system went live. As part of the (e-billing implementation) process, getting law firms on-board Collaborati, and their rates reviewed, approved and into the system was a tremendous win, Trotter says. We ve frozen our rates (corporate-wide) and have a centralized rate negotiation process. When the international offices realized that we can help them negotiate substantial discounts, they realized the benefits of being part of a centralized system. Flexible enough to meet demanding implementation requirements Viacom found that not only could TeamConnect CSM replicate any existing billing process, it was able to streamline procedures even under complex operational circumstances. In most instances, integrating TeamConnect with a corporate AP system is a relatively simple process. However, some portions of Viacom were in the process of switching to a new AP system. Rather than delay the TeamConnect roll-out, the temporary solution of forwarding the approval by was devised for some offices. In conjunction with that process, each month the legal billing team sends AP an Excel listing of all the invoices not yet coded as paid in TeamConnect. In most cases, the AP team goes into TeamConnect and directly enters the payment information itself at the time they pay it. This decreases the lag time for that information and is easier on the AP team, as they don't have to go back and search for the invoice details within the AP system. However, if the invoice volume is high, the AP team then enters the payment information on the Excel sheet and sends it back. The Excel sheet is then uploaded into TeamConnect. That may sound like a burden, but when you consider all the efficiencies TeamConnect delivered -- automated invoice routing that ensures the proper delegation of authority and allows one to track where the invoice is en route; Collaborati [Spend Management], which reviews each invoice to ensure it complies with the billing guidelines; automated budget analyses and spend reporting; and the fact that law firms can go into Collaborati and check the status of an invoice without calling AP for updates we ve saved AP so much time and effort in other areas that they were willing to key-in the payment information until we complete new AP system deployment, Trotter says. MITRATECH HOLDINGS, INC. ALL RIGHTS RESERVED. 3

4 HOW TEAMCONNECT MEETS LOCAL REQUIREMENTS Raising a purchase order (PO) Viacom requires that a purchase order be raised within the local accounts payable department before an invoice can be submitted against it for payment. As implementation began, though, it became clear that, due to the nature of legal work, a purchase order often was raised after work on a new matter began. In such cases the legal staff would wait until the law firm ed a work in progress statement and use that to open the matter and secure the approvals needed to raise a purchase order. The purchase order was then opened by accounts payable and the work in progress statement and subsequent law firm invoices were applied to it. First, the U.S.-based implementation representatives demonstrated how TeamConnect CSM could electronically replicate the process while still maintaining the existing pre-bill statement submission and review. The U.S. representatives then demonstrated how the legal staff could simplify the process by 1) opening a new matter in TeamConnect on inception, automatically initiating an internal retention process directly comparable to the company PO process, and then 2) begin receiving and submitting electronic invoices against the approved retention. Doing so allows the offices to open a matter on inception and retain the firm as an involved party. That, in turn, triggers an automated retention review process within TeamConnect CSM, which includes verifying the firm s billing rates and sending the firm Viacom s Terms of Engagement letter. We built an integration that allows us to autosend a variety of standardized documents, such as our billing and rate policies, or RFPs based on a particular practice area, through our customer relationship management (CRM) system, which pulls the right data cut from TeamConnect. That s been very helpful, Trotter says. VAT and pre-bill statements Like a state sales tax in the US, VAT is often paid to the law firm for various services. The firm, in turn, pays the VAT to the government. Some countries also have a withholding tax that is paid directly to the government. Whether or not either tax appears on the invoice or is calculated by the recipient varies by jurisdiction. At first glance, managing tax payments via electronic invoicing may appear tricky. There are, for example, different percentages of VAT for different line items services meaning different percentages of VAT may show up on a single invoice. Further, if a formal invoice is received, VAT regulations do not allow any adjustment to the submitted invoice. The invoice must be paid in full as submitted and the law firm then makes the necessary adjustments in the form of a credit memo credits that must be tracked against the original invoice. If adjustments are needed, some Mitratech clients simply reject the invoice in its totality and make the firm resubmit a whole new invoice, thereby eliminating the need for a credit memo. Viacom, on the other hand, employs a draft statement, which allows it to review the invoice in TeamConnect CSM before it is formally accepted. First, the draft is reviewed in TeamConnect CSM to ensure it complies with the firm s billing guidelines. It is then routed and reviewed within the department without ever leaving the TeamConnect system. Once the review is complete, if changes are needed the draft invoice is rejected and sent back to the law firm with change requests. Now finalized, the firm issues the formal invoice thereby eliminating any need for credit memos. Hard-copy requirements In many jurisdictions a traditional hard copy invoice or a PDF copy of the invoice is required. Regardless of the requirements, the process can be replicated via TeamConnect. First, the firm submits an electronic invoice with a PDF copy attached, which is reviewed in TeamConnect CSM to ensure it complies with the firm s billing guidelines then routed and reviewed within the department via TeamConnect. If adjustments are needed, the invoice is rejected and sent back to the firm; the firm is instructed to make the necessary adjustments and submit a revised invoice with a revised PDF. If no adjustments are needed, both the invoice and the PDF are forwarded to the accounts payable representative. The firm receives an approval that includes instructions to send the paper copy to the AP representative. Once the hard copy is received, the representative compares it to the electronic invoice to ensure MITRATECH HOLDINGS, INC. ALL RIGHTS RESERVED. 4

5 they match, and the invoice is submitted for payment. Tracking future changes Procedural changes occur on an ongoing basis and can be tracked at the local level. Either the local AP office or its law firms will alert legal billing of a change for example, a change in the way the VAT is applied to a specific legal service or expense. Regardless of the change, it can be integrated into automated e-billing and matter management processes. SUMMARY & CONCLUSION Considering the financial and operational benefits, the trend towards implementing e- billing on an international scale by global enterprises is expected to accelerate. Automated e-billing systems provide immediate ROI by eliminating duplicate invoices and making it easier (and less expensive) to monitor and enforce billing guidelines on a global basis. Implementing e-billing on an international scale needn t be an arduous process. If a legal department satellite office is already accepting and processing paper invoices from law firms outside the U.S., the internal expertise needed to map and automate the invoice review and payment processes is already in place. TeamConnect can be configured to replicate and in most cases streamline virtually any existing processes. A carefully planned system implementation executed by an experienced team should encompass the entire roll-out, from the initial process mapping to implementation and training. If possible, team members should remain available for consultation once the system goes live. In the end, the streamlining of billing processes and the ability to access rich data visualization, including summary tables, dynamic graphs, and metrics monitors that deliver at-a-glance global information will allow senior management to better budget, monitor, and control the company s legal spend. ABOUT MITRATECH Mitratech is the leading provider of enterprise legal management solutions. Law departments from Fortune 500 companies and large enterprise organizations around the world rely on Mitratech to help them manage their core legal processes, as well as governance risk and compliance. Using Mitratech s TeamConnect platform, legal departments can automate and streamline their matter management, e- billing, legal hold, e-discovery and compliance activities, resulting in reduced costs, improved performance, and increased client satisfaction. Available as an on-premise, hosted, or SaaS-based solution, TeamConnect can adapt to any organization s business and IT infrastructure requirements. We understand the pressure of managing a legal organization, and we are here to provide the solutions to meet your immediate business needs as well as your future challenges. CONTACT MITRATECH website: info@mitratech.com phone: MITRATECH HOLDINGS, INC. ALL RIGHTS RESERVED. 5