The legal spend management process is a process utilized in modern departments to review, analyze, and report on their outside and internal legal costs. This software is usually implemented by the law department’s legal operations team.
Why Does Legal Spend Matter?
The goal of the legal spend management process is to improve the efficiency of the department and create strategies that can lead to sustainable savings. This can be done through the use of legal spend management software that allows the legal operations team to monitor and analyze their spend.
Main Components of Legal Spend Management
1. Legal E-Billing Software
Electronic billing is a process that allows law firms to reduce their paper bill and improve their efficiency. It can be done through the use of a law firm’s portal or a more sophisticated system that allows them to receive and review LEDES invoices.
2. Law Firm Management
The e-billing process allows law firms to connect their sourcing and procurement processes with the needs of their law department. It also enables them to be integrated into the enterprise accounts payable and vendor management systems.
3. Timekeeper Rate Management
The timekeeper rate management process is a process that involves reviewing all aspects of the legal department’s operations, such as the work performed on legal matters and the rates that are agreed upon.
It can also help the legal operations team identify areas of improvement and reduce the risk of errors. One important factor that the legal operations team can consider when it comes to implementing timekeeper rate management is the comparison of the rates with those of other professionals.
4. Legal Spend Analytics and Reporting
With the help of legal spend managing software, the legal operations team can easily slice and analyze all of the data related to their spend. It can help them make informed decisions and report on their spend to various stakeholders.
Legal spend managing software is a vital component of any legal management strategy. It can help a legal department save money on outside counsel fees and improve its efficiency by monitoring and reporting on its spend. Most corporate legal departments use this software to track their overall costs.
How Can Businesses Reduce Their Legal Spend?
Having a comprehensive understanding of the entire legal spend can help companies identify areas of their budget that they can cut down on. It can also help them forecast their legal budget.
An effective way to reduce legal spend is through the transition from manual to software-based spend management. This process can help the legal department save up to 15% of its total legal budget.
Due to the various advantages of legal spend managing software, the legal operations and general counsel teams are more likely to adopt it. It can help them reduce their costs and improve their efficiency.
A critical feature of legal spend management is the ability to automate the e-billing process. This software can help the legal team easily send and receive legal invoices. It can additionally help them approve and manage their accounts payable transactions.
Another effective way to reduce legal spend is through the transition from manual to software-based spend management. It can help them monitor and report on their spend. A great feature of legal spend managing software is the ability to review and compare the various line items of their legal budget. With the help of timekeeper rate management, they can easily understand how much they should pay.
Spend management software can help the legal team automate the various processes related to the procurement and sourcing departments. It can also help them manage the complexity of their spend by providing them with the necessary tools to meet the needs of their vendors.
The software can help the legal department determine which legal work should be performed in-house or outsourced. It can also provide them with the necessary reports and data to make informed decisions regarding their spend.
Some of the key factors that can be considered when it comes to choosing which work to perform in-house are volume discounts, matter budgeting, and timekeeper rate management.
The benefits of adopting a legal spend management system are many. Apart from cost savings, it can also help the legal team save time and focus on their core business.