For more than a decade, I worked in the financial services industry for a third party electronic trading provider. During this time, I had the opportunity to work with various institutional and retail trading platforms and I see some significant similarities between that business and enterprise legal management.
Through the years, many brokerage trading platforms touted that they were the fastest and/or the best. They claimed to have invested millions of dollars in IT spend to ensure low latency/high frequency trading for the front office trading professionals.
Many in the front office argue that trade execution is the most important facet of the trading lifecycle. While I agree that trade execution is important, I would argue that settlement is the most critical piece because it’s what makes the trade legally binding according to the Securities and Exchange Commission. Settlement is where money is exchanged for shares between brokers and custodian banks.
Although these brokerage platforms were robust in terms of trading volume and extremely fast in terms of execution, ultimately, all trades need to settle with the depository. But completed execution did not automatically mean that the settlement would be successful. The trade could still be rejected at the depository due to missing or incorrect information on the settlement instructions. The better the quality of settlement instructions, the less likely that the trade would fail. This is in turn would reduce cost for all the industry players, especially the brokers and banks. Like Wyatt Earp said, "Fast is fine, but accuracy is everything."
In the business of law, I see parallels with the U.S. equity trading market. When an invoice is generated by a law firm, which is analogous to a brokerage, submitting it on time is just as significant as fast trade execution. But it’s even more important that the invoice details, like settlement instructions, are correct. If the details are wrong, the invoice is rejected by the client, like a failed trade, and this leads to added costs for both client and law firm. This cost increases even more for those firms who do not have a time and billing system and invoice manually.
Without stringent data accuracy and a focus on quality invoices, you only address some of the requirements. To minimize problems and costs, firms should seek solutions that ensure compliance with accepted billing formats on invoice data. This way, you can find out whether an invoice is correct before it leaves your law firm, not after a corporate legal or claims department has rejected it.
Getting your invoicing done right is at least as important as getting it done quickly. Just ask Sheriff Earp.