LEDES 1998B vs. XML: Which LEDES Format Your Clients' E-Billing System Wants

The rejection notice arrives on a Thursday afternoon. The invoice went out on time, the work was approved by the client’s claims professional weeks ago, and now the carrier’s e-billing portal has bounced the file with a one-line reason the billing administrator has to decode before anyone gets paid. For firms with insurance or corporate clients, the format of the invoice file decides whether the invoice gets reviewed at all, and LEDES 1998B is where most of those conversations start.

Start with the constraint. Your client’s e-billing system decides which LEDES format you send, and your firm adapts to it. If you’re evaluating LeanLaw for this work: LEDES invoices are available on the Pro and Elite plans, and Split Billing (a Pro feature enabled by LeanLaw’s Success team) supports LEDES on the 1998B format only. If a client requires an XML format, confirm that your billing system supports it before you take the matter on.

What is LEDES 1998B?

LEDES stands for Legal Electronic Data Exchange Standard. The standards are maintained by the LEDES Oversight Committee, which also publishes the format specifications.

According to the committee’s LEDES 98B format page, LEDES 1998B is “an ASCII, pipe delimited format containing 24 fields.” In plain terms, it’s a text file in which each line carries one invoice line item, with its details in fixed fields separated by the pipe character, |. The same page calls it “currently the most-widely used ebilling standard in the legal industry in the US,” notes the documentation was last revised in August 2014, and says the committee doesn’t intend to modify the format in the future.

That stability is the appeal. A 1998B file is plain text, so a billing administrator can open it in a text editor and find the line that failed.

What does LEDES 1998BI add?

LEDES 1998BI is the international version of 1998B. The committee’s LEDES 98BI page traces it to a 2004 proposal from LITIG, a UK-based legal IT group, for an e-billing standard based on 1998B. The committee approved a beta in 2005 and ratified the standard in 2006, adding “additional fields necessary for global ebilling.” The current version, ratified in January 2020, is still pipe-delimited and carries 52 fields.

If your clients and your firm are all in the US, you’re unlikely to be asked for 1998BI. If a client is billing matters across borders, its guidelines may name it. The committee also says future global e-billing needs will be handled in the XML formats rather than through more changes to 1998BI.

What are the LEDES XML 2.x formats?

The XML formats are structured files rather than flat lines of text, which lets them carry information a pipe-delimited file can’t express cleanly. There are three version families, each documented on ledes.org:

• LEDES XML 2.0. Ratified in 2006, the 2.0 format added the ability to itemize complex taxes, bill alternative fee arrangements, and record credits and debits on a matter, and supports multiple vendor tax identification numbers.
• LEDES XML 2.1. Ratified in 2008, version 2.1 published a math statement to align how vendor systems calculate invoice math, expanded tax support, added data elements required by foreign jurisdictions, and introduced a regulatory statement segment for jurisdiction-level invoice rules.
• LEDES XML 2.2. Ratified in 2020, version 2.2 added support for tiered taxes; the committee gives a withholding tax in Japan as the example. A later revision added a way to submit timekeeper rates in their home currency when the invoice is in another currency.

Some e-billing platforms request XML because their clients need what 1998B can’t hold: tax detail by jurisdiction, alternative fee arrangements, multi-currency rates, or regulatory statements. If none of those apply to your matters, a client may still accept 1998B. The committee’s own guidance on choosing a format starts with a question: did your client tell you which format to use? If so, follow it.

Where do UTBMS codes fit?

UTBMS (the Uniform Task Based Management System) is the coding layer that rides inside a LEDES file. The committee, which hosts UTBMS.com, describes it as “a series of codes used to classify legal services performed by a legal vendor in an electronic invoice submission.” Task codes describe the service by area of law, activity codes identify the specific service performed, and expense codes categorize expenses on a matter.

Codes matter because they’re what the client’s e-billing system tests against its billing guidelines. A time entry without a valid task and activity code, or with a code from the wrong code set, gets flagged by any system that requires them. Our guide to UTBMS task codes in LEDES invoices covers the code sets in more detail.

How to find out which LEDES format a client’s e-billing system wants

Don’t guess from the platform’s name. Ask the client for its outside counsel billing guidelines, and check them for:

• the LEDES format and version (1998B, 1998BI, or a specific XML version);
• which UTBMS code set applies (for example, a litigation code set) and whether codes are required on every line;
• approved timekeepers, titles, and rates, and how rate changes must be submitted;
• invoice frequency, billing period rules, and submission deadlines; and
• any line-item rules, such as limits on block billing or on certain expense types.

If the guidelines are silent on format, ask the e-billing platform’s vendor support which formats and versions it accepts for that client. Record the answer on the matter so the next invoice doesn’t depend on someone’s memory.

Why LEDES invoices get rejected

Rejections tend to fall into four categories:

1. Wrong format or version. A 1998B file sent to a system configured for XML, or an XML file built to the wrong version.
2. Missing or invalid codes. Blank task or activity codes, codes from the wrong set, or expense codes that don’t match the expense.
3. Rate and timekeeper mismatches. A timekeeper the client hasn’t approved, a rate that doesn’t match the approved rate, or a title that differs from the one on file.
4. Guideline violations. Lines the system flags under the client’s rules, such as block-billed entries or disallowed expenses.

All four are catchable before the file leaves the firm. A disciplined pre-bill review checks codes, rates, and narratives against each client’s guidelines while fixing them is still cheap.

What a rejected e-bill costs the firm

A rejected e-bill sits unpaid until someone fixes and resubmits it, and the corrected file goes back into the client’s review queue. Every rejection adds days to collect. When the client’s system cuts or reduces a line instead of rejecting the whole invoice, the firm takes a write-down it never decided to make, which shows up in realization. For a managing partner, that’s billed work that never turns into cash.

If LEDES billing is new to your firm, our overview of LEDES billing software covers what to look for. In LeanLaw, LEDES invoices are available on the Pro and Elite plans. LeanLaw runs on QuickBooks Online (a requirement), and invoices land there without re-entry. You can see how that fits into LeanLaw’s billing workflow. Whichever system you use, confirm the format with the client before the first invoice, so the first file you send is one their system will accept.