2025-08-12 · Guides

LEDES & IOLTA: a practical guide

By Team LawMate

LEDES & IOLTA: a practical guide

Navigating LEDES billing codes and IOLTA trust accounting can be overwhelming for solo practitioners. Here's what you need to know.

Understanding LEDES

The Legal Electronic Data Exchange Standard (LEDES) is a billing format that:

  • Standardizes invoice data across legal departments and law firms
  • Reduces processing time for corporate clients
  • Ensures compliance with client billing requirements

Common LEDES formats

LEDES 98B - Most common format

  • Line-by-line billing entries
  • Includes timekeeper rates and billing codes
  • Compatible with most legal billing systems

LEDES 98BI - Enhanced version

  • Includes additional fields for expenses and disbursements
  • Better support for complex matters
  • Preferred by larger corporate clients

LEDES 2000XML - Modern XML format

  • More flexible data structure
  • Better integration with modern systems
  • Becoming the standard for new implementations

LEDES billing codes

Timekeeper codes

  • PAR - Partner
  • ASO - Associate
  • STA - Staff attorney
  • LEG - Legal assistant
  • SEC - Secretary

Task codes

  • L100 - Legal research
  • L101 - Document review
  • L102 - Drafting documents
  • L103 - Client communication
  • L104 - Court appearances

Expense codes

  • E101 - Travel expenses
  • E102 - Court costs
  • E103 - Expert witness fees
  • E104 - Document production

IOLTA trust accounting

Interest on Lawyers' Trust Accounts (IOLTA) requires:

Daily reconciliation

  • Compare trust ledger to bank statement
  • Identify and resolve discrepancies
  • Maintain detailed transaction records

Three-way reconciliation

  1. Client trust ledger - Individual client balances
  2. Trust bank account - Actual bank balance
  3. Reconciliation report - Must balance exactly

Common IOLTA violations

  • Commingling funds - Mixing client and firm money
  • Insufficient records - Missing transaction details
  • Late reconciliation - Not reconciling within required timeframe

LawMate's approach

Our system automatically:

  • Generates LEDES exports in multiple formats
  • Maintains IOLTA compliance with automated reconciliation
  • Tracks billing codes and timekeeper classifications
  • Provides audit trails for all trust transactions

Best practices

  1. Set up billing codes early - Before starting work on a matter
  2. Reconcile daily - Don't wait for month-end
  3. Keep detailed records - Every transaction needs documentation
  4. Regular training - Ensure all staff understand requirements
  5. Automated tools - Use software to reduce human error

Common questions

Q: Do I need LEDES for all clients? A: Only clients who specifically request it. Many corporate clients and insurance companies require LEDES format.

Q: How often should I reconcile IOLTA? A: Daily reconciliation is required in most jurisdictions. Some allow weekly reconciliation for smaller firms.

Q: Can I use generic billing codes? A: Yes, but client-specific codes provide better transparency and faster processing.


Need help setting up LEDES or IOLTA compliance? Book a demo to see how LawMate handles both automatically.