Six ways legal spend management technology can reduce your costs
With the increased pressure on legal departments to improve efficiency and control costs, modern legal spend management solutions are a sensible option as they quickly generate savings that exceed the initial investment. A typical legal department can expect to save EUR 445000 in the first year. eBilling automates processes and allows legal departments to identify cost-saving measures both in the immediate term and by making use of data-driven strategies for the future.
Here are six of the ways legal spend management can reduce your costs.
1. Enforcement of Guidelines
EBilling software automatically checks invoices against billing guidelines such as caps on hours, total spend, expenses, overtime or staffing rules. Human reviewers will make mistakes and miss certain invoice and line item violations. This is especially the case for departments with multiple guidelines or different rules for different firms. Your company’s specific rules can be loaded into the eBilling software, which then automatically evaluates invoices during processing. Non-compliant invoices that may have previously gone unnoticed will be rejected or flagged for review, and compliant invoices automatically approved for payment.
2. Real time cost transparency
eBilling offers visibility and consistency of how legal bills, matter information and budgets are input, processed and centrally stored. This creates greater control vs. spreadsheets by default.
Modern Legal Spend Management software has additional tools to improve visibility of the entire matter lifecycle and associated costs. For example, BusyLamp allows law firms to enter work in progress (WIP) before invoicing the respective line items so the legal department doesn’t need to wait for the bill to get this information. Legal departments can also submit cost estimates and instruct firms directly from the software. This increased transparency makes budgeting easier and reduces unexpected costs.
3. Invoice processing and time efficiencies
As with many software tools, legal spend management dramatically improves efficiency and accuracy. With eBilling, information is processed digitally with no need for sorting and organising, as bills are forwarded automatically to a designated person after being checked for guideline compliance. This saves a huge amount of administration time spent doing tasks which carry the risk of significant manual errors, and some tasks are made redundant, such as data entry, scanning and filing. Coupled with other process automation, lawyers are freed up to spend time on actual legal work, their area of expertise, not tedious manual tasks.
4. Reporting efficiencies
Having real-time, secure, accurate and consistent centralised data saves a lot of time accessing and reporting on documents, matters and financials. A lot of time is wasted by legal staff of all seniorities manually compiling reports from multiple on- and offline sources. By using Legal Spend Management software, custom reports as required by the business can be scheduled for automatic creation and delivered to stakeholders by email. When ad-hoc reports are inevitably required, they can be compiled in just a few clicks.
5. Legal analytics for strategic decision making
Over time, the use of legal spend management creates a database of all historic matters and their associated spend, broken down into UTBMS and LEDES codes. Analytics can be used to gain insights into legal spend and inform data-driven decision-making by comparing savings, spending trends and budget-to-actuals across law firms, matter types, practice areas, jurisdictions, timekeeper seniority, and more. This further reduces costs and improves legal operations.
EBilling captures spend accurately and comprehensively. Without it, analysing spend is incredibly time and resource intensive. With eBilling, the legal department is armed with valuable information for long-term spend management and is positioned to contribute to business goals and achieve year over year improvements, becoming a driver of value and savings for the company instead of a cost centre.
6. Vendor sourcing
Modern legal spend management solutions like BusyLamp include tools to submit RFPs and cost estimates for work to law firms. Pre-structuring the requests in a consistent format ensures a fair and easily comparable response from the firms. Proposals are more likely to be competitively priced, as firms know they are competing for the work. Using data from responses and estimates can empower a legal department to make more informed resourcing and budgeting decisions, faster.
To find out exactly how much you can save in each of these areas, download the Building a Business Case for eBilling Guide, which provides calculations for each category of saving.