How do you best explain why legal bills should not be subject to a PO process? This is in the context of moving to an e-billing system.

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General Counsel in Softwarea year ago

The Accounts Payable ("AP") function in a business is completely removed from the legal department with no insight into the legal services that a law firm has rendered. As such, a Purchase Order ("PO") process that's designed to make routine purchases more efficient for the respective accounting departments would not be appropriate.

Consider that POs are generated through a requisition process. Legal services are not always able to go through a requisition process for various reasons, such as sensitivity of the matter, or an inability to estimate the cost of a matter at its inception. As these services don't conform to the requirements of a requisition or PO process, it doesn't make sense to use POs.

I would also explain that a PO for legal services that does not require the AP department to consult the legal department would be the rare exception instead of the rule. I would come back to the fact that there are matters that are too sensitive to be referenced in a PO sent to an AP department. Remind your business that attorneys are held to a higher ethical standard and have strict duties of confidentiality pertaining to information relating to the client representation. That duty includes a requirement to ensure against unauthorized or inadvertent disclosure (Model Rule of Professional Conduct 1.6 (c). For that reason, it is prudent to exclude legal bills from the PO process.

I hope the above will be helpful to explaining your position but please let me know if have any questions.

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AI LegalTech Counsel & Legal Ops Innovation Leader | Digital Transformation Expert | Strategic Advisor in Services (non-Government)a year ago

I agree with ' post.

In addition, it's worth noting that organizations that utilize PO systems for handling legal bills often find themselves relying on manual processes for in-depth analysis of these expenses. This consumes valuable time and resources but also introduces a higher potential for errors and inconsistencies. Investing in an e-billing system offers a significantly more efficient and reliable approach to managing legal billing.

Furthermore, e-billing systems provide comprehensive reporting capabilities that offer deep insights into legal expenses. These systems can generate customizable reports that highlight spending trends, identify cost-saving opportunities, and compare billing data across various legal matters or time periods. This level of analysis is invaluable for informed decision-making, budget forecasting, and strategic planning.