One of the hot topics in law office technology is currently automated or on-line billing, which uses computing to produce bills direct from fee-earners' desks.

But while the technology may be viable, is the practice desirable? How is it to be reconciled with the normal workings of accounts departments - and are there any real benefits to it anyway?In July 1994, the east Midlands law firm Howes Percival became one of the first to install a new practice management system developed by AIM Professional.

The firm has 30 partners, 46 fee-earners, and a total of 180 staff in its four offices.

Among other things the new system - AIM Evolution - offers an optional semi-automatic process for the drafting and approval of bills by fee-earners as part of its accounting function.Although by no means the main reason why the firm decided on AIM, this facility had aroused considerable interest in Howes Percival's ba nking recoveries section.

This was because of the large volume of small bills - several hundred with fees determined by both recorded time and fixed fee activity - the section had to produce, and the amount of time the quarterly billing exercise usually took.

The decision was therefore taken to use the banking recoveries section as a pilot project for the implementation of computerised billing within the firm.The advantages claimed for the process are the reduction in resources needed to produce bills, the speed and accuracy with which they can be issued and the consequent improvement in cash flow.

However, what is interesting is the results to date bear out the claims made for the process and go a long way towards allaying the fears and concerns over what is, for many practices, a radical departure from orthodox accounting procedures.Howes Percival estimates the new billing procedure is producing a 70% saving in the time and cost of bill production, compared with its previous billing arrangement.

Under the old system, production of each bill took around 17 minutes of staff time, split between a senior fee-earner, a secretary and accounts department staff.

With chargeable time valued at between £30 and £90 per hour for the staff involved - averaging at £60 per hour - the cost of producing each bill was therefore around £17 in chargeable time.

Using the computerised system in January 1995 each bill required just five minutes of time split between fee-earner and accounts department staff to produce an average cost of just £5 per bill - a saving of 70% in time and cost.It is also worth mentioning that under the old system the whole process took around two weeks each quarter and monopolised the time of one fee-earner and one member of the support staff for that whole period.

Files would also be out of the normal filing system for large portions of that time while the handwritten notes of the fixed fee activities on the file were consulted and combined with the computerised information on recorded time, disbursements and expenses supplied by the accounts department.Each file would be inspected by a fee-earner who would then dictate a bill, and a secretary would type it up before sending it to the accounts department for approval and processing.

The result was that by the time a batch of bills had been printed off and inspected by the accounts department some 10% of the matters would already have incurred more disbursements, and those bills would therefore have to go back to the section for amendment.

And of course the draft bills would be up to two weeks old by the time they were entered into the accounts system and issued to clients.Howes Percival believes the new AIM Evolution system provides three key advances over traditional bill drafting and approval procedures.

First, it can identify matters where billing may be appropriate, using a number of different selection parameters, and present the fee-earner with a list of suggested matters to bill, as well as accepting the fee-earner's own instructions on which draft bills to prepare.Secondly, it collates all fee and disbursement information on each matter selected for billing, and prepares a draft bill with standard wording for the fee-earner to approve or amend.

The fee-earner can then 'drill down' and inspect any item of time, fixed fee or disbursement included in the draft and amend, mark up, mark down or delete any item.

The standard text of the bill can also be amended on screen.Thirdly, the system automates the approval process using its 'group working' (or 'workf low') capabilities.

This allows administrative and client service procedures to be set up to move work around a firm electronically.

So, for instance, as each stage in a process is completed a message appears on the screen of the computer terminal or PC of another member of the team, who is designated to perform the next stage in the process, advising that individual of the task to be completed.Thus in the billing process, the 'approvers' are each presented in turn with the draft bill, as drawn up by the fee-earner, for approval on their terminal or PC screen.

And, once the final stage of the approval process has been cleared, the draft bill is automatically numbered, printed and posted in the accounting system.There is provision for up to three levels of approval before that happens, but the efficiency of the paper-free progress through the approvals process ensures that each of literally hundreds of bills can go from drafting to despatch within hours.

The only constraint is whether the approvers themselves are able to check the information on their screens promptly.Systems manager Jane Deeley explains how the firm prepared to produce its first batch of quarterly bills under the new regime: 'We took two teams of five people - a mixture of fee-earners, secretaries and accounts staff - and put each group through two 90-minute training sessions to show them how the system produces and pro-cesses draft bills.

We also set a target of producing the quarter's bills in two days, compared with the normal two weeks.'In the first billing run, in October 1994, it took three-and-a-half days, but this was largely because the computerised process highlighted anomalies in the firm's disbursement and expense data, most of which had been collected manually.

This meant some files still had to be brought out and consulted so the anomalies could be cleared up, and the records left in an accurate state for the start of the next quarter.The second quarter's billing session was completed in January 1995 and took just two days.

Throughout the period, all fee-earners in the section were available to handle most of their normal workload.

The disturbance to the output of the section was relatively minor, and the bills were on their way to clients ten days earlier than under the previous system.Howes Percival debt recovery manager Patricia Ogram had pressed strongly for the introduction of the system into her department, and was pleased with the result: 'We saved an enormous amount of fee-earner time, and were able to have normal access to our working files and fully maintain service to the client throughout the billing process.'Critical to any billing process in a law firm is the integrity of the information from which the bill is prepared, the control over what can be written off, and the system for approving the bill before it is posted in the ledger and sent to the client.

Here is how the process now works at Howes Percival.

Time-recording fixed fee and disbursement data is input to the accounting system, which operates in 'real time', so it reflects the latest information and can present that to the bill drafting process whenever a request for a draft bill is made.The first level of approval is the fee-earner responsible for the matter who must decide whether all the items presented by the computer are to be included in the bill, and can exclude, mark down or mark up the value of any item, as well as amend the standard wording of the text.

This is handled entirely on-screen and no paper copy is generated.The system then transfers the infor mation (via the workflow facility) to the next approver's screen.

This will typically be the department head, who sees the same information on-screen as did the fee-earner, and can also see where items have been written off or amended.The third level of approval is the accounts department, after which the bill is automatically produced and posted to the ledgers.

The printed bill then awaits the final level of approval, which is the traditional one of signature by a partner (at Howes Percival each client is the responsibility of a specific partner) who will conduct a last check of the completed bill.One area of concern over automated billing is the reaction of the accounts staff to the possible loss of control and status the change might imply.

Similarly, fee-earners and secretaries may view the task as something of a 'role-reversal', or an involvement in a menial activity.

However, few tears were shed on those grounds at Howes Percival because the sheer volume and tedium of the previous billing process was something everyone was glad to see reduced.Roger Pinnock, Howes Percival's partnership secretary, is now looking at the wider implementation of the billing facility: 'We introduced it first in the department where we had most scope for productivity gains, but our experience there has encouraged us to plan its use throughout the firm.

The saving of fee-earner and support staff time was dramatic, and we can also see from the results so far that our billing contains fewer errors and therefore fewer reasons for clients legitimately to delay payment.'In other areas of the firm it will have less impact on productivity, but it is difficult to see any disadvantages and there are a number of distinct benefits.

For instance, we can set work in progress limits for a matter or for a client which, when breached, will cause the system to generate a set of draft bills for all that client's current matters and refer them to the fee-earner for attention and possible billing.

That is a powerful way of ensuring that a client's matters do not begin to tie up excessive WIP without anyone realising what is happening.'Similarly, if we notice the overall billing level is below budget in some area of the firm, we can ask fee-earners to use the system to identify and bill all matters where billing is appropriate.

With the system, we know this exercise can be done without a major disturbance to fee-earning activity and can therefore keep billing up to the mark across the firm.'Finally, of course, there is the speeding up of the process so that bills are issued, dated and settled anything up to ten days earlier than they would have been previously.'