legal spend management

Cutting the flab: How legal departments can control spending

by PracticeLeague

The age of large law department budgets is nearly over. Legal departments of organizations are now expected to restrict their legal spending and to do more internally with the same or lower budgets. General Counsels of Legal departments are looking at different avenues for centrally tracking each legal matter, budgets, legal liabilities and legal fees across all third party lawyers and law firms.

Organizations have many options, although the one that is coming on top of their priority is cutting the spending on outside counsel. Legal departments of organizations are adopting business-oriented approaches to tracking the value that is gained from legal spending on outside counsel and taking action to get maximum value. Legal departments are getting more concerned about paying for results rather than paying for reputation or experience.

However, being able to do that involves many things. It involves having the business data on a real time basis about cases, projects, billable time etc to be able to influence decisions. Having measurable data on metrics, targets, legal spend etc is the key to be able to manage and control costs. This entails organizing the workflows of the legal department in an integrated way so that information about projects, cases, results, billable time can collected, analyzed and delivered for decision making.

Information technology can play a very significant role in this. Ready Legal Department software tools can give an accurate view of the entire legal work queue, in terms of cases, projects, budgets, spending, whilst providing records management, e-discovery and storage management solutions. Electronic billing is another tool that can save money and add accountability. By coding the electronic bill, your company can track, measure and run reports to analyze spending demands and patterns.

In addition, new tools are evolving to provide dashboards and visualizations that deliver added insight on how to best manage your legal spend. These tools give in-house counsel a practical way not only to monitor and analyze their spending and results, but also to evaluate the relative value provided by their outside counsel.

Another approach to controlling legal spending is by adjusting terms of fee structures. Whilst the billable hour is still the standard method used by firms, alternative fees arrangements based on value-driven results are on the rise. A variety of alternative pricing models are available apart from the billable time model.

Bullet Contingency/results-based fees are used when a law firm is paid based on results. This might include hourly rates with a results bonus. It also could include a time or budget cap, with a contingency arrangement with your law firms.
Bullet Blended hourly rates allow for the same hourly rate to be charged, regardless of whether a partner or an associate is performing the task. This works well in long-term relationships in which your company can trust the law firm to assign the right person to handle the work—regardless of their designation.
Bullet Reduced hourly rates can provide for a pro rata performance bonus at the successful conclusion of the case or when concluding the matter within an agreed time.

Uberall's Ready to use Corporate Legal Department solution enables enterprises to manage all legal matters centrally. Court dates, deadlines, legal charges, budgets and documents can be accessed at any time. Uberall's PracticeLeague Corporate Legal Solution offers complete internal legal work queue and litigation management across all local and international offices and branches. Further, case status information can be captured from the law firms and independent attorneys at real-time.

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