LEDES stands for Legal Electronic Data Exchange Service, and functions as the global standard for legal billing exchange. Founded in 1995, LEDES was originally formed by the Law Firm and Law Department Services Group within PwC. The organization is run by the LEDES Oversight Committee (LOC), which consists of law firms, corporate legal departments, universities, and software vendors. The LOC was initially created under informal pretenses to address e-billing issues in the late 1990’s, but later became incorporated as a not-for-profit California mutual-benefit corporation in 2000. Since then, LEDES has become internationally recognized and used, and is run by legal industry representatives who work to create and maintain uniformity for e-billing between corporations and law firms.
The program does this by creating standardized formats for electronic invoicing that do not cater to any one organization, and instead offer common solutions based off of five basic principles:
Utilizing these five ideals, LEDES serves to standardize legal invoices globally. Though adopting the standards is voluntary, given that LEDES has been around and widely used for almost two decades, it would behoove law firms to adopt the standards to ensure that they can better meet the needs of corporations, other law firms, and legal industry software vendors. LEDES first and foremost caters to this by helping law firms generate invoices that are more easily understood. Because of this, those firms get paid faster (since their invoices are so straightforward).
Furthermore, the implementation of LEDES can:
All of this, when combined through the utilization of LEDES, can help a firm allocate resources more effectively, increase working efficiency, and realize profitability more seamlessly. The LEDES format reduces the time spent on invoice creation and task descriptions, while also allowing for ease of access and processing for uniform invoices.
Your firm can also benefit from the billing analysis capabilities that come alongside the utilization of LEDES. LEDES works to ensure that all software programs (even your firm’s) can handle bills the same way because due to the standardized format, the bills can be easily “read” by the software program designed to handle them (which is most programs).