How procurement can benefit from legal eBilling software
The benefits of eBilling for corporate legal departments are well documented. With digitally created billing files and automated processing and checking of invoices, eBilling saves a huge amount of administrative resource and tracks external legal spend in almost real time, ensuring adherence to guidelines and budgets.
Less talked about is how the legal procurement function can benefit. Legal spend management software captures detailed invoice line item data on matter information and bill totals, as well as timelines, timekeepers and expenses coded using the UTBMS code set for tasks, activities and expenses. This creates an extensive data set from which to analyse and make future decisions. The powerful reporting and analytics capabilities in modern eBilling solutions can be used in the following ways:
1. Benchmark service provider performance
eBilling ensures that billing data points for all service providers are entered consistently. This allows for accurate comparison of performance metrics such as timekeeper rates, levels of experience, time to complete a matter, adherence to budgets and compliance to billing guidelines. Some solutions allow the in-house team to rate the firm, though this is a subjective data point. Benchmarking metrics gives legal procurement visibility into the service and value they are receiving from each service provider and leads to open and honest conversations.
2. Influence future legal purchase decisions
The data generated by Legal Spend Management can ensure the right option is selected when deciding how to resource legal work. Longer term, the right analysis will lead legal procurement to the right purchase strategy based on past data and comparisons. This works even better when legal procurement is open with providers about the use of this approach and shares their goals, so external providers know how to meet expectations.
3. Review and restructure existing panels
Panel reviews can be time and resource intensive because of insufficient data from which to compare levels of experience, performance and expertise across firms, a lack of spend data, and an inability to track service delivery methods across providers. eBilling removes all these problems thereby reducing the resources needed to conduct a review and generate a confident outcome. One positive of a panel review can be a reduction in panel size, which usually leads to greater discounts by consolidating work to fewer firms. A possible flipside of this is a lack of specialist firms on the panel. Weighing up these risks can cause conflict between procurement and the legal department and is much harder to evaluate without the data generated from Legal Spend Management software.
4. Renegotiate rates and terms
By comparing fees and rates, as well as reviewing service provider performance, legal procurement can enter negotiations with an arsenal of data to help them reduce costs and create more valuable relationships with external providers. Firms often don’t have access to this level of data and may be surprised by legal procurement’s findings. They want satisfied clients and are open to these discussions.
The above benefits not only drive savings and confident decision making, but also create a healthy competitive environment within the industry, raising standards for all corporate clients and ensuring maximum value from legal service providers. With procurement helping with financial management activities, the legal department can focus on their external legal business relationships, which will in turn improve the in-house relationship between legal and procurement as they work together to achieve company goals.
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