The Ultimate Guide to UTBMS Codes: Explaining Legal Billing in 2024

Every law firm that bills its clients by the hour generates time entries describing the work performed. These time entries are eventually used to populate client bills. The trouble with raw time entries, however, is that they are written in non-standardized natural language. This makes it challenging for both firms and clients to understand how much of what type of work was done.

That's where the Uniform Task-Based Management System (UTBMS) codes come in. UTBMS codes are a set of standardized codes that aim to categorize various legal tasks, allowing firms and clients to better understand what timekeepers are doing on a given matter or in the aggregate. In fact, many clients mandate the use of UTBMS codes by their outside counsel.

This article will explain the history of UTBMS codes, their current implementation, and their impending obsolescence.

Want to download a list of all UTBMS codes? Here’s a link.

A Brief History of UTBMS and LEDES

UTBMS codes emerged in the mid-1990s as a collaborative effort between the American Bar Association (ABA), the Association of Corporate Counsel (ACC), and PricewaterhouseCoopers (PwC). This initiative was driven by the need for greater clarity in legal billing and the desire to enable more effective analysis of legal expenses. By creating a common language for legal services, UTBMS codes aimed to reduce billing disputes and facilitate more accurate budgeting and forecasting.

Concurrently, the Legal Electronic Data Exchange Standard (LEDES) and the LEDES Oversight Committee (LOC) were formed to develop electronic formats for transmitting billing information. While UTBMS provided the coding system, LEDES offered the standardized electronic format for exchanging this coded information. Today, the LOC is responsible for maintaining and updating both the LEDES formats and the UTBMS codes.

How Firms Use UTBMS Codes

Law firms across various practice areas actively use UTBMS codes to streamline billing and improve client communication. In litigation, the codes help firms break down complex cases into distinct phases and tasks, offering clients greater transparency on where time and resources are spent. In corporate law, firms utilize UTBMS codes to efficiently track transactional work—such as mergers and acquisitions—where precise billing for due diligence, drafting, and negotiation tasks may be required by clients.

Emerging fields like data privacy and intellectual property also increasingly rely on these codes to track compliance and advisory work, particularly as new regulations and technological advancements reshape legal landscapes. By adopting UTBMS codes, law firms not only ensure accurate billing but also gain deeper insights into the allocation of resources across their legal services, improving budgeting, forecasting, and ultimately, client satisfaction.

Understanding UTBMS Codes

UTBMS codes provide a standardized method for law firms to categorize and bill their legal services. The system consists of four main categories:

1. Phase Codes. These categorize legal work into broad stages of a matter. For example, in litigation, phases include pre-trial, discovery, and trial.

2. Task Codes. These provide a more granular description of specific legal tasks performed within each phase. Examples include pleadings, motions, and document production.

3. Activity Codes. These categorize the specific actions performed to carry out a legal task. Activities include researching, drafting, or communicating with other parties.

4. Expense Codes. These categorize various legal expenses incurred during the matter, such as travel costs, photocopying fees, and court fees.

Phase and Task Codes

Phase and Task codes are the core of the UTBMS system. They categorize legal work into stages and specific tasks. These codes vary across different practice areas, with distinct code sets designed to reflect the workflows and tasks associated with a particular type of legal work. Some of the common code sets are:

1. ABA Litigation Code Set

2. ABA Bankruptcy Code Set

3. ABA Counseling Code Set

4. ABA Project Code Set

5. LOC Intellectual Property Code Set

6. LOC eDiscovery Code Set

The ABA initially developed several code sets, including the widely used Litigation codes. However, the LOC now maintains and updates many of these. They also create new code sets for emerging practice areas.

Each code set has its own structure and numbering system. For instance, the Litigation code set uses "L" as a prefix (e.g., L100, L200), while the Bankruptcy code set uses "B" (e.g., B100, B200).

Examples of Phase and Task codes:

• [Phase] L200 Pre-Trial Pleadings and Motions

  • [Task] L210 Pleading

  • [Task] L220 Preliminary Injunctions/Provisional Remedies

  • [Task] L230 Court Mandated Conferences

• [Phase] B100 Administration

  • [Task] B110 Case Administration: Preparation of coordination and compliance matters, financial affairs statements, and general creditor inquiries

  • [Task] B120 Asset Analysis and Recovery: Identification and review of potential assets including causes of action and non-litigation recoveries

You can download the full list of Phase and Task codes here.

Activity Codes

Unlike Phase and Task codes, there is a single, universal set of Activity codes maintained by the LOC. These codes are used across all practice areas and describe specific actions taken to complete tasks. They work in conjunction with Phase and Task codes to provide a more comprehensive picture of the work performed.

Examples of Activity codes:

• A101 Plan and prepare for

• A102 Research

• A103 Draft/revise

• A104 Review/analyze

• A105 Communicate (in firm)

You can download the full list of Activity codes here.

Expense Codes

Similarly, there is one universal set of Expense codes, also overseen by the LOC. These codes are designed to categorize costs incurred during legal work across all practice areas and code sets.

Examples of Expense codes:

• E101 Copying

• E102 Outside printing

• E103 Word processing

• E104 Facsimile

• E105 Telephone

You can download the full list of Expense codes here.

Benefits of UTBMS Codes

1. Standardization. UTBMS codes provide a common language for legal services, reducing misunderstandings and disputes.

2. Improved Analysis. With standardized data, clients can more easily analyze and compare legal spend across different matters and firms. Firms can also use codes to analyze how their attorneys are spending time, which can help with pricing and forecasting future work.

3. Enhanced Transparency. Detailed coding allows for greater clarity in what services were performed and why.

4. Efficient Auditing. Standardized codes make it easier to audit bills and identify discrepancies.

Challenges in Implementing UTBMS Codes

1. Resistance to Code Entry. Almost nobody enjoys tracking their time, so having to add UTBMS codes makes the process even more cumbersome. So, attorneys and staff may either enter incorrect codes or skip them altogether.

2. System Integration. Law firms need to ensure their billing systems are compatible with UTBMS codes. This may require significant investment in software upgrades or new systems.

3. Training. There are many UTBMS codes, so attorneys must be trained to ensure they label their work correctly. Increased UTBMS labeling errors may slow bill cycle times and increase client disputes.

4. Auditing. Auditing of code usage may be necessary to maintain accuracy and consistency. This is an additional layer of administrative work.

5. Guidelines. Establishing clear guidelines for code selection helps ensure uniformity across the firm, but it also takes time.

UTBMS Codes’ Declining Relevance

While UTBMS codes have been instrumental in standardizing legal billing, there are several challenges to their relevance:

1. Automated Coding: Artificial intelligence and machine learning technologies are increasingly capable of automating the coding process. This raises questions about the need for manual code selection.

2. Natural Language Processing: Advanced NLP algorithms can analyze billing narratives to answer many of the same questions that UTBMS codes help with. Clients as well as firm leadership using this technology can get precise answers to questions like “How much time was spent on pleadings in this bill?”

3. Client Demands: Sophisticated clients are demanding more granular and customized billing data that goes beyond the capabilities of standard UTBMS codes. This may lead to the use of more bespoke, customized codes that are applied dynamically by clients, rather than a standardized code set that's pre-applied by the law firm.

4. Alternative Fee Arrangements: The rise of alternative fee arrangements (AFAs) is shifting focus away from hourly billing, potentially reducing the relevance of task-based coding systems.

Efficient Implementation: The Case for Automated Coding

Although UTBMS codes provide certain advantages, their implementation can be expensive in terms of both money and time. So, if your firm intends to reap the benefits of the codes, how can you minimize their cost? Automated coding.

Automated systems streamline UTBMS implementation by:

1. Increasing coding accuracy and consistency

2. Cutting out training time and human error

3. Saving partner and secretary time during bill review

4. Saving attorney time during timekeeping

5. Adapting easily to code changes or updates

6. Providing robust data analytics

Automated timekeeping systems like PointOne leverage AI to accurately assign UTBMS codes to time entries. This approach allows firms to benefit from standardized billing without the operational burden of manual coding. By embracing automated coding, law firms can efficiently implement UTBMS codes, meet current billing standards, and remain flexible for future changes in the legal billing landscape.