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How Billing Works for Insurance Defense Lawyers
How Billing Works for Insurance Defense Lawyers
Streamline insurance defense billing with proven best practices, compliance tips, and automation to ensure prompt and accurate payments.
Streamline insurance defense billing with proven best practices, compliance tips, and automation to ensure prompt and accurate payments.
Streamline insurance defense billing with proven best practices, compliance tips, and automation to ensure prompt and accurate payments.
February 21, 2025
Adrian Parlow
Co-Founder & CEO
In this article
Title
Title
Learn how PointOne uses AI to build the world's most advanced time and billing systems.
Legal time and billing, automated.
Learn how PointOne uses AI to build the world's most advanced time and billing systems.
Legal time and billing, automated.
Legal billing can be complicated under the best of circumstances, but legal billing for insurance defense work presents many extra challenges.
Because there are so many rules regulating insurance companies on the state and federal levels, insurance companies often have strict requirements that apply to outside counsel collecting fees for insurance defense work.
To maximize the chances that your invoices are paid without issue, here are some best practices to adopt for insurance defense billing.
1. Understand the insurer's requirements
Insurance companies often have very detailed reporting requirements and many even require you to use task-based billing codes when you submit your invoices.
Information about each insurer's specific billing procedures is usually included in detailed litigation guidelines insurance companies create to effectively manage the work performed by outside defense counsel.
Many insurers specify in these guidelines that attorneys will not be paid for any work performed outside of the written litigation plan, and they often set specific budget limits that you must follow.
Understanding these rules up front can help you to avoid performing services you won't be paid for, or billing for services outside the scope of tasks the insurer requested. You'll also learn the steps you need to properly identify the things you are billing for so you can get paid properly.
2. Itemize billing
Block billing, or including multiple tasks in a single entry, often raises red flags with insurers and may violate the billing guidelines insurance companies establish.
Instead of block billing, prepare an itemized bill that describes the basis for each individual charge. While this sometimes takes more time, PointOne makes this process easy.
With PointOne, you can establish your own billing rules and processes based on the insurer's requirements. The software will automatically apply those rules to both time entries and pre-bills. This can make creating a detailed bill simple and reduces the ability of insurance companies to challenge your fees based on ambiguity.
3. Standardize billing among co-counsel
It's very common for insurance defense firms to assign multiple attorneys to the same case, with each of the individual lawyers working together in differing roles.
If that's the case in your situation, you and your co-counsel should always have consistent billing practices regarding your time entry process and bill coding. Standardizing your approach to billing allows you to avoid discrepancies and inconsistencies that could raise red flags with insurers.
Establishing a detailed billing policy for your insurance defense work can ensure this standardization exists, while using automated billing software can reduce inconsistencies and human error in the timekeeping process.
4. Be prepared for potential audits
It's not uncommon for insurance companies to audit the bills you submit. In fact, some insurers partner with fee-based audit firms that receive a portion of the amount they can cut from the legal bills submitted by insurance defense attorneys.
Whether the insurer you are working with employs an outside service or not, though, audits are likely a very real risk. In fact, Mckinney Law published a law review article related to the increased prevalence of insurance companies auditing their outside counsel.
The Law Review article warns that some of the most comprehensive audits involve a visit to the billing firm, interviewing law firm personnel at that firm, and a careful review of pre-bills and time sheets. A computerized program is commonly used to complete this comprehensive audit process.
Auditors usually look for:
Major activities performed
Who performed them
Time spent
To ensure you're prepared for this audit process -- and to avoid having your fees reduced --always adhere closely to the insurer's litigation guidelines. You should keep supporting documents for any bills that you submit. These supporting documents may include case files, original time sheets, and copies of vendor invoices.
5. Consider all fee arrangements
There are many different ways to charge for insurance defense work that can make billing easier -- and reduce the chances of an audit that results in your fees being arbitrarily cut.
For example, project-based pricing can simplify the billing process and can reduce the time spent negotiating with insurance companies on an appropriate amount to pay. There's no question about your fees, as you're paid the agreed rate for the project you're performing.
Split-billing is another option. This billing approach allows you to easily divide out tasks performed for different clients so you can then send the bill for each service to the appropriate party. Since billing requirements are intensive for insurance defense work, split billing can help you save time since you are not separately creating multiple individual bills for each client from a blank slate.
Ultimately, each of these different approaches can be very beneficial when you are doing insurance defense work and you need to find the best way to charge for services, bill properly, and invoice effectively to maximize your compensation.
However, the best way to make sure you're following billing guidelines and the best way to be prepared in case of a potential audit is to have the right tools to help you automate billing compliance.
With PointOne, the entire billing process is handled for you and you can harness the power of AI automation to create customized bills that comply with all guidelines -- and even include the insurer's task-based billing codes when required.
Reach out to PointOne today to learn how we can make billing for your insurance defense work simple, all while reducing the chances of an audit that leaves you with less.
Legal billing can be complicated under the best of circumstances, but legal billing for insurance defense work presents many extra challenges.
Because there are so many rules regulating insurance companies on the state and federal levels, insurance companies often have strict requirements that apply to outside counsel collecting fees for insurance defense work.
To maximize the chances that your invoices are paid without issue, here are some best practices to adopt for insurance defense billing.
1. Understand the insurer's requirements
Insurance companies often have very detailed reporting requirements and many even require you to use task-based billing codes when you submit your invoices.
Information about each insurer's specific billing procedures is usually included in detailed litigation guidelines insurance companies create to effectively manage the work performed by outside defense counsel.
Many insurers specify in these guidelines that attorneys will not be paid for any work performed outside of the written litigation plan, and they often set specific budget limits that you must follow.
Understanding these rules up front can help you to avoid performing services you won't be paid for, or billing for services outside the scope of tasks the insurer requested. You'll also learn the steps you need to properly identify the things you are billing for so you can get paid properly.
2. Itemize billing
Block billing, or including multiple tasks in a single entry, often raises red flags with insurers and may violate the billing guidelines insurance companies establish.
Instead of block billing, prepare an itemized bill that describes the basis for each individual charge. While this sometimes takes more time, PointOne makes this process easy.
With PointOne, you can establish your own billing rules and processes based on the insurer's requirements. The software will automatically apply those rules to both time entries and pre-bills. This can make creating a detailed bill simple and reduces the ability of insurance companies to challenge your fees based on ambiguity.
3. Standardize billing among co-counsel
It's very common for insurance defense firms to assign multiple attorneys to the same case, with each of the individual lawyers working together in differing roles.
If that's the case in your situation, you and your co-counsel should always have consistent billing practices regarding your time entry process and bill coding. Standardizing your approach to billing allows you to avoid discrepancies and inconsistencies that could raise red flags with insurers.
Establishing a detailed billing policy for your insurance defense work can ensure this standardization exists, while using automated billing software can reduce inconsistencies and human error in the timekeeping process.
4. Be prepared for potential audits
It's not uncommon for insurance companies to audit the bills you submit. In fact, some insurers partner with fee-based audit firms that receive a portion of the amount they can cut from the legal bills submitted by insurance defense attorneys.
Whether the insurer you are working with employs an outside service or not, though, audits are likely a very real risk. In fact, Mckinney Law published a law review article related to the increased prevalence of insurance companies auditing their outside counsel.
The Law Review article warns that some of the most comprehensive audits involve a visit to the billing firm, interviewing law firm personnel at that firm, and a careful review of pre-bills and time sheets. A computerized program is commonly used to complete this comprehensive audit process.
Auditors usually look for:
Major activities performed
Who performed them
Time spent
To ensure you're prepared for this audit process -- and to avoid having your fees reduced --always adhere closely to the insurer's litigation guidelines. You should keep supporting documents for any bills that you submit. These supporting documents may include case files, original time sheets, and copies of vendor invoices.
5. Consider all fee arrangements
There are many different ways to charge for insurance defense work that can make billing easier -- and reduce the chances of an audit that results in your fees being arbitrarily cut.
For example, project-based pricing can simplify the billing process and can reduce the time spent negotiating with insurance companies on an appropriate amount to pay. There's no question about your fees, as you're paid the agreed rate for the project you're performing.
Split-billing is another option. This billing approach allows you to easily divide out tasks performed for different clients so you can then send the bill for each service to the appropriate party. Since billing requirements are intensive for insurance defense work, split billing can help you save time since you are not separately creating multiple individual bills for each client from a blank slate.
Ultimately, each of these different approaches can be very beneficial when you are doing insurance defense work and you need to find the best way to charge for services, bill properly, and invoice effectively to maximize your compensation.
However, the best way to make sure you're following billing guidelines and the best way to be prepared in case of a potential audit is to have the right tools to help you automate billing compliance.
With PointOne, the entire billing process is handled for you and you can harness the power of AI automation to create customized bills that comply with all guidelines -- and even include the insurer's task-based billing codes when required.
Reach out to PointOne today to learn how we can make billing for your insurance defense work simple, all while reducing the chances of an audit that leaves you with less.
Legal billing can be complicated under the best of circumstances, but legal billing for insurance defense work presents many extra challenges.
Because there are so many rules regulating insurance companies on the state and federal levels, insurance companies often have strict requirements that apply to outside counsel collecting fees for insurance defense work.
To maximize the chances that your invoices are paid without issue, here are some best practices to adopt for insurance defense billing.
1. Understand the insurer's requirements
Insurance companies often have very detailed reporting requirements and many even require you to use task-based billing codes when you submit your invoices.
Information about each insurer's specific billing procedures is usually included in detailed litigation guidelines insurance companies create to effectively manage the work performed by outside defense counsel.
Many insurers specify in these guidelines that attorneys will not be paid for any work performed outside of the written litigation plan, and they often set specific budget limits that you must follow.
Understanding these rules up front can help you to avoid performing services you won't be paid for, or billing for services outside the scope of tasks the insurer requested. You'll also learn the steps you need to properly identify the things you are billing for so you can get paid properly.
2. Itemize billing
Block billing, or including multiple tasks in a single entry, often raises red flags with insurers and may violate the billing guidelines insurance companies establish.
Instead of block billing, prepare an itemized bill that describes the basis for each individual charge. While this sometimes takes more time, PointOne makes this process easy.
With PointOne, you can establish your own billing rules and processes based on the insurer's requirements. The software will automatically apply those rules to both time entries and pre-bills. This can make creating a detailed bill simple and reduces the ability of insurance companies to challenge your fees based on ambiguity.
3. Standardize billing among co-counsel
It's very common for insurance defense firms to assign multiple attorneys to the same case, with each of the individual lawyers working together in differing roles.
If that's the case in your situation, you and your co-counsel should always have consistent billing practices regarding your time entry process and bill coding. Standardizing your approach to billing allows you to avoid discrepancies and inconsistencies that could raise red flags with insurers.
Establishing a detailed billing policy for your insurance defense work can ensure this standardization exists, while using automated billing software can reduce inconsistencies and human error in the timekeeping process.
4. Be prepared for potential audits
It's not uncommon for insurance companies to audit the bills you submit. In fact, some insurers partner with fee-based audit firms that receive a portion of the amount they can cut from the legal bills submitted by insurance defense attorneys.
Whether the insurer you are working with employs an outside service or not, though, audits are likely a very real risk. In fact, Mckinney Law published a law review article related to the increased prevalence of insurance companies auditing their outside counsel.
The Law Review article warns that some of the most comprehensive audits involve a visit to the billing firm, interviewing law firm personnel at that firm, and a careful review of pre-bills and time sheets. A computerized program is commonly used to complete this comprehensive audit process.
Auditors usually look for:
Major activities performed
Who performed them
Time spent
To ensure you're prepared for this audit process -- and to avoid having your fees reduced --always adhere closely to the insurer's litigation guidelines. You should keep supporting documents for any bills that you submit. These supporting documents may include case files, original time sheets, and copies of vendor invoices.
5. Consider all fee arrangements
There are many different ways to charge for insurance defense work that can make billing easier -- and reduce the chances of an audit that results in your fees being arbitrarily cut.
For example, project-based pricing can simplify the billing process and can reduce the time spent negotiating with insurance companies on an appropriate amount to pay. There's no question about your fees, as you're paid the agreed rate for the project you're performing.
Split-billing is another option. This billing approach allows you to easily divide out tasks performed for different clients so you can then send the bill for each service to the appropriate party. Since billing requirements are intensive for insurance defense work, split billing can help you save time since you are not separately creating multiple individual bills for each client from a blank slate.
Ultimately, each of these different approaches can be very beneficial when you are doing insurance defense work and you need to find the best way to charge for services, bill properly, and invoice effectively to maximize your compensation.
However, the best way to make sure you're following billing guidelines and the best way to be prepared in case of a potential audit is to have the right tools to help you automate billing compliance.
With PointOne, the entire billing process is handled for you and you can harness the power of AI automation to create customized bills that comply with all guidelines -- and even include the insurer's task-based billing codes when required.
Reach out to PointOne today to learn how we can make billing for your insurance defense work simple, all while reducing the chances of an audit that leaves you with less.
Legal billing can be complicated under the best of circumstances, but legal billing for insurance defense work presents many extra challenges.
Because there are so many rules regulating insurance companies on the state and federal levels, insurance companies often have strict requirements that apply to outside counsel collecting fees for insurance defense work.
To maximize the chances that your invoices are paid without issue, here are some best practices to adopt for insurance defense billing.
1. Understand the insurer's requirements
Insurance companies often have very detailed reporting requirements and many even require you to use task-based billing codes when you submit your invoices.
Information about each insurer's specific billing procedures is usually included in detailed litigation guidelines insurance companies create to effectively manage the work performed by outside defense counsel.
Many insurers specify in these guidelines that attorneys will not be paid for any work performed outside of the written litigation plan, and they often set specific budget limits that you must follow.
Understanding these rules up front can help you to avoid performing services you won't be paid for, or billing for services outside the scope of tasks the insurer requested. You'll also learn the steps you need to properly identify the things you are billing for so you can get paid properly.
2. Itemize billing
Block billing, or including multiple tasks in a single entry, often raises red flags with insurers and may violate the billing guidelines insurance companies establish.
Instead of block billing, prepare an itemized bill that describes the basis for each individual charge. While this sometimes takes more time, PointOne makes this process easy.
With PointOne, you can establish your own billing rules and processes based on the insurer's requirements. The software will automatically apply those rules to both time entries and pre-bills. This can make creating a detailed bill simple and reduces the ability of insurance companies to challenge your fees based on ambiguity.
3. Standardize billing among co-counsel
It's very common for insurance defense firms to assign multiple attorneys to the same case, with each of the individual lawyers working together in differing roles.
If that's the case in your situation, you and your co-counsel should always have consistent billing practices regarding your time entry process and bill coding. Standardizing your approach to billing allows you to avoid discrepancies and inconsistencies that could raise red flags with insurers.
Establishing a detailed billing policy for your insurance defense work can ensure this standardization exists, while using automated billing software can reduce inconsistencies and human error in the timekeeping process.
4. Be prepared for potential audits
It's not uncommon for insurance companies to audit the bills you submit. In fact, some insurers partner with fee-based audit firms that receive a portion of the amount they can cut from the legal bills submitted by insurance defense attorneys.
Whether the insurer you are working with employs an outside service or not, though, audits are likely a very real risk. In fact, Mckinney Law published a law review article related to the increased prevalence of insurance companies auditing their outside counsel.
The Law Review article warns that some of the most comprehensive audits involve a visit to the billing firm, interviewing law firm personnel at that firm, and a careful review of pre-bills and time sheets. A computerized program is commonly used to complete this comprehensive audit process.
Auditors usually look for:
Major activities performed
Who performed them
Time spent
To ensure you're prepared for this audit process -- and to avoid having your fees reduced --always adhere closely to the insurer's litigation guidelines. You should keep supporting documents for any bills that you submit. These supporting documents may include case files, original time sheets, and copies of vendor invoices.
5. Consider all fee arrangements
There are many different ways to charge for insurance defense work that can make billing easier -- and reduce the chances of an audit that results in your fees being arbitrarily cut.
For example, project-based pricing can simplify the billing process and can reduce the time spent negotiating with insurance companies on an appropriate amount to pay. There's no question about your fees, as you're paid the agreed rate for the project you're performing.
Split-billing is another option. This billing approach allows you to easily divide out tasks performed for different clients so you can then send the bill for each service to the appropriate party. Since billing requirements are intensive for insurance defense work, split billing can help you save time since you are not separately creating multiple individual bills for each client from a blank slate.
Ultimately, each of these different approaches can be very beneficial when you are doing insurance defense work and you need to find the best way to charge for services, bill properly, and invoice effectively to maximize your compensation.
However, the best way to make sure you're following billing guidelines and the best way to be prepared in case of a potential audit is to have the right tools to help you automate billing compliance.
With PointOne, the entire billing process is handled for you and you can harness the power of AI automation to create customized bills that comply with all guidelines -- and even include the insurer's task-based billing codes when required.
Reach out to PointOne today to learn how we can make billing for your insurance defense work simple, all while reducing the chances of an audit that leaves you with less.
