Optimizing Pre-Bill and Proforma Review for Law Firms

Pre-bill review (or proforma review, depending on the firm’s terminology) is a critical step in the billing process for law firms. Typically performed on a monthly cadence, this process functions as a quality control step that occurs after time entries have been generated, but before bills are sent out to the client.

In this post, we’ll walk through the typical process for pre-bill review, the types of issues it’s designed to resolve, common challenges and best practices, and how firms can approach automation for this process.

The Pre-Bill Process

What is a Pre-Bill?

In a typical law firm process, all time entries must be submitted by attorneys, paralegals and other timekeepers by the end of the month. During the first week of the following month, whoever at the firm is responsible for invoicing — for example, a billing administrator or member of the finance team — generates draft bills, also known as “pre-bills” or “proformas,” which contain all of the draft time entries to be invoiced to clients that month. They also contain expenses incurred during the billing cycle, such as travel costs, filing fees, expert witness fees, and other costs that are passed on to the client.

Pre-Bill vs. Proforma

The terms “pre-bill” and “proforma” are used somewhat interchangeably, depending on the specific billing practices of a firm.

At some firms, a proforma is a preliminary version of a bill generated for internal review, containing all relevant information such as payment and pricing terms. Meanwhile, a pre-bill would be the final draft of the client-facing bill, which undergoes one final review before being sent to the client.

Other firms use only one of the two terms for their entire process. In this article we’ll primarily use the term “pre-bill.”

Reviewing Pre-Bills

The process of reviewing pre-bills is a critical step that firms use to ensure the quality of invoices before they’re sent out to the client.

This process varies by firm, but there are typically a few steps involved. First, pre-bills go to an initial reviewer, who may be a senior associate, junior partner, executive assistant, or member of the firm’s billing staff. This person usually checks for more routine and detail-oriented items such as spelling and grammar, completeness of narratives, compliance against the firm’s billing guidelines and any relevant outside counsel guidelines (OCGs), and categorization of time entries.

Once the initial review is complete, the pre-bill is sent to the final reviewer — typically the partner responsible for owning the client relationship. This person double checks the work of the initial reviewer, cleaning up any remaining issues. They will also perform a higher-level review, focusing on strategic items like the overall reasonableness of the time spent and the client’s perception of the bill. They will execute any write-offs, discounts or no-charges required. They may also edit narratives to improve the client’s perception of the work product and increase consistency among timekeepers on the matter. Reviewing expenses for reasonableness would be another common workflow.

Once the final reviewer has signed off on the pre-bill, the billing team uses it to produce a final draft bill. Depending on the firm’s process, this draft would either be recirculated to the partner for a final review or invoiced directly to the client.

List of Items to Review

The following is a non-exhaustive list of the most common things reviewers typically look for when they edit pre-bills.

Time Entries

• Spelling and grammar. These are table stakes, but issues are more common than many people expect.

• Clarity and detail of narratives. Narratives must be detailed enough to fully and accurately describe the work performed, but not so detailed that they become difficult for the client to read and digest. Firms vary in their preferred level of detail.

• Conveying client value. Narratives should convey the value of the work performed. To the extent possible, they should focus on the value the attorney has contributed to the project — such as the specific deliverables or analysis performed, rather than simply the labor put into the task.

• Reasonableness of time spent. Quick, simple tasks should have short time entries, while larger, more difficult tasks can have long time entries. This is a judgment call based on the specific practice area, task, and timekeeper.

• Duplicate entries. The same task should only be billed once. If the task is performed over the course of multiple time entries, the narratives should make that clear.

• Consistency among timekeepers. If two people attend the same call, they should bill the same amount of time for that call. Similarly, narratives describing the contents or purpose of the call should be consistent. Consistency issues are a pet peeve for many clients.

• Misclassification of entries. Time entries must be assigned to the correct client and matter. It’s common for entries to be classified under the wrong matter — for example, putting entries under the “General Corporate” matter rather than a specialist matter.

Write-Offs and Discounts

• Application of agreed-upon discounts. Partners often agree to pre-specified discounts or write-offs for certain kinds of tasks. For example, partners who work with startups usually agree to write off time spent attending board meetings. It’s also common to discount any time spent managing a client’s capitalization table. Reviewers must ensure these discounts have been properly applied to the pre-bill.

• Write-offs of associate time. For junior lawyers in their first several years of practice, it’s common to write off significant portions of their time as learning and development. Firms allow associates to bill for all time spent, and partners are then responsible for reducing this time to what they consider a reasonable amount for the task.

Expenses

• Categorization. Ensuring that expenses are appropriately categorized and that expenses listed on the bill are client-billable, rather than internal firm expenses.

• Reasonableness. Ensuring that expenses are reasonable, justifiable and not excessive.

Outside Counsel Guidelines

• Block billing. It’s common for clients to specify whether firms can block bill — ie., whether they can include multiple tasks within a single time entry. Many clients prohibit block billing as it can make it harder to analyze time entries they receive.

• Task codes. Clients frequently have specific sets of phase, task and/or activity codes that they require law firms to use. For example, they may require the standard UTBMS code set or a custom set of codes.

• Narrative requirements. Clients may have specific requirements around how narratives are crafted. A typical requirement would be to include sufficient detail and avoid vague narratives.

• Time increment. Most clients expect the standard 0.1 hour billing increment, but some may require other increments such as 0.25 hours.

• Restricted tasks. Clients may restrict certain types of tasks from being billed — for example, administrative tasks or internal communications.

• Task-based caps. Clients may impose cost caps on specific tasks — for example, the time spent on contract diligence for a corporate transaction.

• Staffing restrictions. Clients may restrict the number and types of timekeepers who are permitted to bill on their matters. For example, some clients prohibit the use of first year associates or prohibit staffing more than a certain number of lawyers on a matter.

• Discount requirements. Clients may require certain types of work to be discounted — for example, document review or routine filings.

Optimizing Pre-Bill Review

The Time-Quality Tradeoff

While pre-bill review is a crucial piece of the billing process for law firms, it can also be incredibly costly and time consuming. For most firms, there’s a tradeoff between the amount of time allocated to pre-bill review and the quality of the bills being produced.

At one end of the spectrum, firms who view bills as important client marketing documents tend to allocate extensive resources to pre-bill review to ensure that bills are high quality. This typically manifests as 10+ hours per partner per month spent on pre-bill review, in addition to one or more non-partner review steps.

At the other end of the spectrum, some firms expect their clients to pay their bills no matter the quality, and so they allocate few resources to pre-bill review. However, this can often result in poor quality bills and a negative client impression of the firm.

The goal of optimizing the pre-bill review process is to allow firms to increase the quality of bills without spending additional time on pre-bill review. Or conversely, to reduce the time spent on review while maintaining quality.

The following graph shows how optimization can improve the quality of client bills at any given level of time spent reviewing bills.

From Paper to Digital

Traditionally, the pre-bill process was done on paper. The finance team would produce pre-bills in large paper packets and distribute them to partners’ desks every month.

Around the late 1990s to early 2000s, digital pre-bills were introduced alongside the adoption of digital time and billing software like Aderant and Elite. However, many firms continued to hang onto paper processes up until the pandemic, when the shift to “work from home” finally moved nearly all firms to a completely digital process.

That being said, “digital” does not necessarily equal efficient. The typical process shifted from reviewing paper to reviewing PDFs — the digital equivalent of paper. The problem with PDFs is that edits are made by dropping comments in the document, which an assistant or billing admin then has to review, incorporate into the bill, and recirculate an updated version for final review. This adds unnecessary extra steps to the process, slowing things down and adding cost.

Starting in the mid-2010s, cloud-based billing products were introduced, such as Elite’s 3E Paperless Proforma and Intapp’s Billstream in large firms, and all-in-one solutions like Clio in smaller firms. These products improved efficiency by allowing reviewers to make edits directly in the software, reducing the need for additional review cycles. However, they did not fundamentally change the process of reviewing pre-bills, which is still largely manual and costs firms many hours a month of expensive review time.

From Software to Automation

The next phase in the evolution of this process is a shift from an interface that allows humans to review pre-bills, to an intelligent application that autonomously reviews pre-bills, flagging and fixing problems before a human ever gets involved. The recent advent of AI has enabled this to exist for the first time.

Automated pre-bill review software like PointOne is able to learn the billing preferences for law firms and even individual reviewers. It can also incorporate client-level billing preferences from the firm’s database of Outside Counsel Guidelines. The software then autonomously takes a first pass at reviewing each pre-bill and suggests edits in a track changes interface that the human reviewer can accept or reject.

Using intelligent automation software can help firms reduce time spent on pre-bill review and improve bill quality at the same time. Combining this type of software with AI time tracking software can amplify the benefits of each and further improve bill quality.

Closing Thoughts

Pre-bill review is an essential, yet often time-consuming, component of the law firm billing process. As client expectations and billing guidelines become more complex, it’s increasingly important for firms to refine this process to balance quality and efficiency.

The shift from traditional paper methods to digital workflows, and now to AI-driven automation, highlights the potential for continuous improvement. By leveraging recent advances in AI, firms can optimize pre-bill review, reduce costly manual steps, and deliver bills that both satisfy clients and protect firm revenue.

As the industry evolves, embracing intelligent automation may prove to be the key to a more streamlined, client-focused billing process.