Practice Tips, by Dave Bilinsky, Practice Management Advisor

E-billing, e-signatures and paperless offices

musical note No it don’t mean a thing it’s Mumbo Jumbo
No sense to anything it’s Mumbo Jumbo.. musical note

Music, lyrics and recorded by Air Supply.

How to bill clients in a paperless office is an issue that is receiving a lot of interest at the moment. An additional twist occurs when the client doesn’t wish to receive traditional invoices, but instead desires to receive “e-bills” or electronic invoices. Furthermore, there are lawyers who want to render traditional-looking invoices, but in a paperless manner. All three of these situations raise legal, ethical and technological issues.

Lawyer preparing an invoiceStarting from first principles, s. 69(1) of the Legal Profession Act states that “a lawyer must deliver a bill to the person charged.” That section does not limit or constrain a lawyer from rendering a paper invoice, a paperless (i.e., a traditional invoice produced as an Adobe portable document format (PDF) file) invoice or an electronic invoice. A bill in electronic form may, or may not, be readable by a person (“person-readable”). Some accounting programs only produce invoices that can be read by the software (“machine-readable”).

I suggest that lawyers confirm with their clients how they wish to be billed. Institutions such as the Legal Services Society (LSS) and ICBC have been requiring their lawyers to render electronic invoices for some time now. Other clients may wish to receive their invoices in PDF. Still others may be more traditional and wish to receive a hard copy.

S. 69(2) states: “A bill may be delivered under subsection (1) by mailing the bill to the last known business or residential address of the person charged.” This presents some complications around confidentiality obligations. For example, if a lawyer sends a paperless bill to the client’s work email address, the employer may take the view that it is entitled to read employees’ emails. Client confidentiality may also be at risk on a shared (e.g., family) computer. The lawyer should ensure that the client understands the client’s obligation to keep their information confidential (e.g., password-protected).

For clients such as ICBC or LSS, it is presumed that “delivery of the bill” will occur by the electronic transmission in the form and manner requested by the client. The problem, of course, is that this invoice is in machine-readable form and not in person-readable form

The Legal Profession Act has been drafted from the obvious perspective of a lawyer delivering a person-readable form of invoice. Does that mean that a lawyer has to also – and always – produce a person-readable form of invoice? What if the client has specifically requested that a person-readable bill is not wanted?

It would be very odd if the lawyer had to produce a person-readable form of bill when the client and the lawyer had previously agreed that the lawyer would only be required to deliver a machine-readable form of invoice. This is premised on the fact that, if asked, the lawyer could produce a printout of that invoice that is person-readable and that would comply with all of the other provisions of section 69 (e.g., it contains a descriptive statement of services with a lump sum charge and a detailed list of disbursements).

In terms of best practices, it would be useful if, in situations where the client wishes to receive a machine-readable form of invoice, the lawyer kept evidence that they approved the pre-bill that is ­person-readable prior to the rendering of the electronic invoice to the client. This way the firm can document that the lawyer reviewed and approved the billing before it left the firm.

What about signatures? Traditionally, a lawyer would affix a pen and ink signature to an invoice or to a letter accompanying the invoice or, at the very least, the billing would be accompanied by a letter signed on behalf of the lawyer that refers to the bill (s. 69 (3), LPA). What are the requirements in an electronic-billing environment?

For PDF files, lawyers can always affix their Juricert digital signature to the invoice or to a letter accompanying the invoice. That would certainly comply with s. 69(3). In some cases, lawyers may affix a “digitalized” signature – being a graphical image of their paper-based signature to the invoice. Provided that the client has agreed that this method would constitute a signed invoice for the purposes of billing, it would appear to meet the requirements of s. 69(3). I would certainly wish to have this documented in writing, presumably in a retainer agreement.

How does a lawyer “sign” a machine-readable invoice? Generally, e-billing software does not incorporate a digital signature or other similar method when producing an electronic invoice.

In order to comply with s. 69(3), the lawyer should have the electronic bill go out with an email that contains a letter (attachment) that is either signed by the lawyer or signed on behalf of the lawyer that refers to the electronic billing. This way, the firm can say that it has complied with s. 69(1) to (3).

Of course, the firm would capture all this information in its paperless filing system and/or accounting system in order that it can produce a printed (person-readable) form on demand to comply with Rule 3-59(2)(c ). After all, if it comes to it, you want to be sure that your invoices don’t look like a bunch of mumbo jumbo.