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What is LEDES billing? A Lawyer’s guide to LEDES.

If you want to begin working with large clients, or you perhaps you already do, you’ve probably come across the need for LEDES billing. LEDES is an acronym that stands for Legal Electronic Data Exchange Standard, and provides a digital billing standard “for the electronic exchange of billing and other information between corporations and law firms.” Formed in 1995, the LEDES Oversight Committee (LOC) is responsible for creating, as well as maintaining the standards for this information exchange between corporations and legal professionals. Today, the LEDES billing standards are recognized globally as an industry best practice. 

If you’re just getting started working with larger entities, we know the last thing you want to do is reformat your tried and true billing process in order to sync with someone else’s— but LEDES billing is a common practice that you will need to master eventually if you don’t want to miss out on valuable work opportunities. 

What even is LEDES billing?    

If you asked 10 of your friends located in 10 different places to send you recipes for cake, you’re likely to get 10 unique lists of ingredients, and all in completely separate orders. Some of those items you may not even be able to purchase because they’re not available at your local store. Now, imagine you’re a corporation asking for an invoice from law firms all over the world. They come back with different codes, some are missing activity dates, you will never be able to line them up, it’s simply a disaster.  

This problem was very real, and as the internet grew in the early 90’s and more business was being conducted online, the mess of e-billing needed to be standardized. The LEDES billing format was designed to mitigate these issues, and to do so it follows these five basic principles: 

  1. Keep it simple 

  2. Make it unambiguous

  3. Diverge from existing formats as little as absolutely necessary 

  4. Only ask for information the law firm is typically able to provide from their financial system 

  5. Meet the needs of corporations, law firms, and legal industry software vendors to the maximum extent possible with the first four criteria. 

With the adoption of the LEDES billing format, the billing process was now standardized saving everyone time, and setting expectations for both parties. Here’s what the most common format, the LEDES 1998B, looks like when exported correctly.

INVOICE_DATE|INVOICE_NUMBER|CLIENT_ID|LAW_FIRM_MATTER_ID|
INVOICE_TOTAL|BILLING_START_DATE|BILLING_END_DATE|
INVOICE_DESCRIPTION|LINE_ITEM_NUMBER|EXP/FEE/INV_ADJ_TYPE|
LINE_ITEM_NUMBER_OF_UNITS|LINE_ITEM_ADJUSTMENT_AMOUNT|
LINE_ITEM_TOTAL|LINE_ITEM_DATE|LINE_ITEM_TASK_CODE|
LINE_ITEM_EXPENSE_CODE|LINE_ITEM_ACTIVITY_CODE|
TIMEKEEPER_ID|LINE_ITEM_DESCRIPTION|LAW_FIRM_ID|
LINE_ITEM_UNIT_COST|TIMEKEEPER_NAME|TIMEKEEPER_CLASSIFICATION|
CLIENT_MATTER_ID[]

If you’re wide-eyed and your mouth has hit the floor —  you’re not alone. At first blush, this looks complicated and time consuming to arrange just for one invoice. We never said that LEDES billing was simplified, we did however say it was standardized

© Copyright 2022 PracticePantherNational Law Review, Volume XI, Number 42
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About this Author

Dan Bowman Marketing Manager PracticePanther

Dan Bowman is the Product Marketing Manager at PracticePanther, an all-in-one legal practice management software. He is responsible for understanding customers and reaching them through creative go-to-market campaigns. With a passion for storytelling, Dan enjoys bringing people together to learn about new and exciting product features that help them grow as people and professionals.

215-896-8942
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