The Legal Electronic Data Exchange Standard (LEDES) is the most widely used electronic data transmission standard in the legal industry. If your organization receives bills electronically from your law firms, there's a very good chance the firms are using LEDES. The LEDES standard has undergone several revisions over the years, but the most commonly used and easily accessed version is LEDES 1998B.
This guide will help you understand what LEDES is, how it is used, and the key components of the LEDES standard.
LEDES provides a consistent framework for legal billing data to help reduce errors, improve efficiency, and provide flexibility in using a wide range of software applications on both the law firm side and the client side. Without a single standardized system in place, law firms and their clients would likely be left with an unmanageable mix of proprietary systems with no consistent way to communicate billing data.
To put it simply, LEDES is the standard that makes e-billing possible.
LEDES 1998B was the first revision to the original LEDES standard and is the most widely used version today. A LEDES 1998B file is a standard legal invoice, just in a different format. All information about timekeeper rates, hours billed, and line-item description are still available.
The primary limitation of LEDES 1998B is the inability to add custom fields. Numerous law departments and legal organizations nevertheless added customized fields to the standard, which has caused problems for their outside counsel.
However, there are ways to modify existing data fields in a standard LEDES file to allow for required information. The greatest benefit of LEDES 1998B is that it is a simple text file, and if you know your way around it, you can make modifications much more easily than other versions of LEDES.
LEDES 1998B data sets are ASCII text files in a "pipe delimited" format, where individual data fields are separated by a delimiter, the "|" character (the one appearing above the "\" key on your keyboard.)
A standard legal bill consists of individual line-item entries, a billable hourly amount, and a standard timekeeper rate. LEDES 1998B files capture individual line-item entries in each line, and the specific data (including date of invoice, invoice description, description of task(s) and services, etc.) are in individual fields separated by delimiters.
The end of an individual billing record in LEDES 1998B is indicated by adding "[]" at the end of each line.
LEDES 1998B billing records include 24 fields in the following format:
INVOICE_DATE|INVOICE_NUMBER|CLIENT_ID|LAW_FIRM_MATTER_ID|INVOICE_TOTAL|BILLING_START_DATE|BILLING_END_DATE|INVOICE_DESCRIPTION|LINE_ITEM_NUMBER|EXP/FEE/INV_ADJ_TYPE|LINE_ITEM_NUMBER_OF_UNITS|LINE_ITEM_ADJUSTMENT_AMOUNT|LINE_ITEM_TOTAL|LINE_ITEM_DATE|LINE_ITEM_TASK_CODE|LINE_ITEM_EXPENSE_CODE|LINE_ITEM_ACTIVITY_CODE|TIMEKEEPER_ID|LINE_ITEM_DESCRIPTION|LAW_FIRM_ID|LINE_ITEM_UNIT_COST|TIMEKEEPER_NAME|TIMEKEEPER_CLASSIFICATION|CLIENT_MATTER_ID[]
In a raw LEDES file where text is not wrapped, these 24 fields will appear as one continuous line, and most billing software will produce the above headers as the first line for reference. Here is what a typical line might look like:
20161116|2034678|123456|LAW FIRM MATTER ID|3351.66|20161111|20161126| INVOICE DESCRIPTION|1|F|0.20||31.00|20120111|L210||A107|3540|LINE ITEM DESCRIPTION.|13-2679447|155.00|JOHN DOE|AS|CLIENT MATTER ID[]
Each field must be placed in the proper order, and there are specific requirements for each field in terms of length, format, and data type.
The LEDES Oversight Committee has designated the following specifications for each of the LEDES 1998B data fields:
Format: Date in YYYYMMDD format
Required/Optional: Required
This field is the date of the invoice date. For each INVOICE_NUMBER, only the first INVOICE_DATE is valid and all others should be ignored.
Format: 20-character text
Required/Optional: Required
This is the invoice number or code assigned to the invoice by the law firm. There can be multiple INVOICE_NUMBERs in the same LEDES 1998B file, but no more than one invoice number per line entry.
Format: 20-character text
Required/Optional: Required
This field is a code or name assigned to the client by the law firm or by the billing company. Only the first CLIENT_ID appearing for a LAW_FIRM_MATTER_ID is valid and all others must be ignored. This field is included along with LAW_FIRM_ID to allow for the option of automatic bill routing.
Format: 20-character text
Required/Optional: Required
This is the matter code assigned by the law firm or billing company. More than one LAW_FIRM_MATTER_ID can be billed in the same invoice if the client permits, but not on the same line. This field is in contrast to the CLIENT_MATTER_ID, which is the code used by the client to identify the matter. Both must be included unless the client does not have their own coding system for matters.
Format: Currency with 12 digits and 4 decimal places
Required/Optional: Required
This field is the sum of all LINE_ITEM_TOTAL values in the invoice. Only the first INVOICE_TOTAL for a given INVOICE_NUMBER is valid, and all others should be ignored. It is recommended that the client verifies that INVOICE_TOTAL is equal to the sum of all LINE_ITEM_TOTALs to account for possible internal errors in the law firm's billing application (making a reasonable allowance for rounding errors.)
Format: Date in YYYYMMDD format
Required/Optional: Required
This field is the start date for the billing period of the invoice. Only the first BILLING_START_DATE for each INVOICE_NUMBER is valid and all others should be ignored.
Format: Date in YYYYMMDD format
Required/Optional: Required
This field is the end date for the billing period of the invoice. Only the first BILLING_END_DATE for each INVOICE_NUMBER is valid and all others should be ignored.
Format: Text, 15 KB max
Required/Optional: Optional
This is a special field for additional notes about an invoice, limited to 15 KB of text. This field is also used frequently to provide customized information and data on the matter of an invoice for that specific invoice. Only the first INVOICE_DESCRIPTION for each INVOICE_NUMBER is valid and all others should be ignored.
Format: 20-character text
Required/Optional: Required
This field is a unique number assigned to each line item of the invoice. In many cases value is pulled from the time entry in the law firm's financial system. Each LINE_ITEM_NUMBER on a given INVOICE_NUMBER must be unique, but they do not need to be sequential.
Format: 2-character text
Required/Optional: Required
This field indicates whether the line item is a fee ("F"), an expense ("E"), an invoice-level adjustment on fees ("IF"), or an invoice-level adjustment on expenses ("IE").
Format: Number with 12 digits and 4 decimal places
Required/Optional: Required except for Invoice-Level Adjustments
This field is the number of units being billed for a line item, and for fees this would be equal to the number of hours being billed. For expenses this is the number of items billed, and this field is ignored for invoice-level adjustments.
Format: Currency with 10 digits and 4 decimal places
Required/Optional: Optional
This field is the numerical value of an adjustment to the line item, and it can be either positive or negative.
Format: Currency with 10 digits and 4 decimal places
Required/Optional: Required
This field is the cost of the line item, equal to (LINE_ITEM_UNIT_COST * LINE_ITEM_NUMBER_OF_UNITS) + LINE_ITEM_ADJUSTMENT_AMOUNT. Sometimes there are rounding errors, so a reasonable variance should be allowed by clients and law firms to account for this.
Format: Date in YYYYMMDD format
Required/Optional: Required
This field is the date the line item fees or expenses were incurred. This is usually between the BILLING_START_DATE and the BILLING_END_DATE.
Format: 20-character text
Required/Optional: Required for Task Items
This field is the task code (typically the UTBMS code) for a particular fee item. This can be left out for expense items which don't have a task code assigned to them. LINE_ITEM_TASK_CODEs may be used without LINE_ITEM_ACTIVITY_CODEs, but the reverse is not permitted. The client typically sets requirements for task code use.
Format: 20-character text
Required/Optional: Required for Expense Items
This field is the expense code (typically the UTBMS code) for a particular fee item. In most cases, expenses will not have an associated LINE_ITEM_EXPENSE_CODE associated with them, and this field can be left blank.
The LEDES Oversight Committee maintains a standardized list of UTBMS Expense Codes.
Format: 20-character text
Required/Optional: Required for Task Items
This field is the activity code (typically the UTBMS code) for a particular fee item. In most cases, expenses will not have an associated LINE_ITEM_ACTIVITY_CODE associated with them, and this field can be left blank. LINE_ITEM_TASK_CODEs may be used without LINE_ITEM_ACTIVITY_CODEs, but the reverse is not permitted. The client typically sets requirements for activity code use.
The LEDES Oversight Committee maintains a standardized list of UTBMS Activity Codes.
Format: 20-character text
Required/Optional: Required for Task Items
This field is a unique ID for the individual billing this line item. Most expense items will not have a TIMEKEEPER_ID and they can be left blank.
Format: Text, 15 KB max
Required/Optional: Required for Task Items
This field is a description of the line item and can be up to 15 KB in size. If a LINE_ITEM_EXPENSE_CODE is used for an expense item, this field may be blank.
Format: 20-character text
Required/Optional: Required
This field must be the law firm's Federal Taxpayer ID number if they are based in the United States, or an alternate identifier if they are outside the United States and don't have a Taxpayer ID number. This is used along with CLIENT_ID to permit automatic bill routing.
Format: Currency with 10 digits and 4 decimal places
Required/Optional: Required except for Invoice-Level Adjustments
The is field is the base unit cost of the line item, and would be the hourly rate for fees or the unit cost for expenses. This field may be left blank for invoice-level adjustments.
Format: 30-character text (Last Name, First Name)
Required/Optional: Required for Task Items
This field is the name for an individual timekeeper, for information purposes only. This should not be used in place of the TIMEKEEPER_ID for primary identification of the timekeeper. This can be left blank for expense items.
Format: 10-character text
Required/Optional: Required for Task Items
This field is the staff classification for an individual timekeeper, for information purposes only. Standard codes are defined by the LEDES Revised Timekeeper Classifications Reference Document. This should not be used in place of the TIMEKEEPER_ID for primary identification of the timekeeper. This can be left blank for expense items.
Format: 20-character text
Required/Optional: Required except if Client does not assign Matter Identifiers
This is the matter code assigned by the client. This field is in contrast to the LAW_FIRM_MATTER_ID, which is the code used by the law firm to identify the matter. Both must be included unless the client does not have their own coding system for matters.