Over the years, we are frequently asked by prospects and customers about “best practices” followed by companies as they relate to a legal spend management program. General counsels face a wide range of business objectives such as cost control, driving efficiencies, better decision making, and process improvement. Implementing a legal bill review program can have compelling benefits in each of these areas. Below are some of the common issues we see among companies and how a legal spend management program can solve their problems.
Issue: The legal department is missing savings opportunities found in their invoices.
Best practice: With the assistance of a legal spend management provider, the company should first create a set of billing guidelines or review their existing guidelines. In these instances, Stuart Maue will make recommendations on improving guidelines or assisting the company with creating a set of billing guidelines. Additionally, as the invoices are reviewed by a Stuart Maue attorney over a period of time, the attorney will gain an understanding of where firms have problems in their billing. Using this information, we can continue to make suggestions that will improve their billing guidelines.
Moreover, general counsels are concerned about the time it takes their internal staff to review invoices. If inside counsel does not have the time to review invoices, companies may be leaving a substantial amount of money on the table. If internal staff is responsible for the review of invoices, there may also be a lack of standardization in the internal invoice review process. By using a legal spend management provider that includes attorney review, the general counsel is ensured an efficient review of invoices as well as a standardized methodology for review.
Issue: Budgets are not being received in a timely manner or not received at all.
Best practice: When general counsels struggle with receiving budgets from law firms, a budget application for both the law firms and the company can be an easy solution. If requested by the client, Stuart Maue can use controls on our budget application to impose budget restrictions. For example, if a firm tries to upload an invoice for review before uploading a budget, the invoice is rejected and a message is sent to the firm stating that a budget is required. Additionally, by adding the necessity of an approval on the budget before invoices are uploaded for payment, a company can be assured that they will receive a budget from each firm.
Issue: There are too many over budget matters.
Best practice: Many companies struggle to keep matters at or under budget. For some clients, Stuart Maue uses notifications for both the law firm and inside counsel when a law firm goes over budget. The notification requests that the law firm create a new budget and Stuart Maue will block a firm from billing until a new budget is approved. This assists companies with keeping matters on budget and over budget matters to a minimum. With budgets assigned to each matter, Stuart Maue can also track budget-to-actual performance by the firms. Tracking budget-to-actual numbers assists general counsels in keeping over budget matters under control.
Issue: There is no easy way to track rate increase requests.
Best practice: Firm rate increase requests can be difficult to keep track of for many companies. Often, rate increases come in at various times during the year (unless a timeframe is outlined in the billing guidelines) and may end up scattered among inside counsel. This situation makes it difficult for general counsels to keep track of who is requesting increases, when they are requesting increases, and how much they are requesting. Stuart Maue solves this problem by implementing a rate increase tool. Firms use the rate increase tool to request an increase along with an explanation for the increase. The rate approval can be funneled to a certain individual or multiple individuals within the company. Once the rate has been approved or rejected, a notification is sent to the law firm. With the use of a rate increase tool, the information surrounding the rate increase request is trackable and available for reporting purposes. Companies now have centralized knowledge about their rates which will result in better information for use in rate negotiations.
Issue: The workflow and payment processes are not streamlined.
Best practice: General counsels often struggle with invoices getting stuck in the review process and taking too long to leave the payment department. Stuart Maue works with clients to review their workflow and payment process in order to streamline their review and payment system. Subject to the client need, we give companies access to a portal where they can review, modify, and approve invoices that were reviewed by a Stuart Maue attorney. After an invoice is approved, a payment file is automatically generated and sent to the accounts payable department. By streamlining the review and payment of invoices, companies ultimately reduce their administration costs.
Issue: There is no analytical basis for some decisions.
Best practice: If a general counsel cannot access the information found in legal invoices, it becomes difficult to make informed decisions. Stuart Maue has assisted many general counsels by helping them gain insights found from the data in their invoices. By requiring law firms to include the UTBMS codes (Uniform Task Based Management System) in their billing, law firms provide a means to identify the work breakdown and cost information for their services. These codes can supply the information necessary for the general counsel’s desire for budget tracking information as well as the need for in-depth analysis of task and expense information. For example, we use UTBMS information to provide our clients with reports and analytics regarding how much was spent on items such as experts/consultants, or in depositions for the year. Having access to this type of intelligence provides general counsels with a wealth of information.
Also, with the use of a powerful database and reporting tools, we can supply additional analytics that allow general counsels to analyze spend by business unit, the number of partner hours spent on a certain matter, as well as other metrics. Stuart Maue’s reports and analytics allow general counsels to make more informed, proactive decisions, optimize allocation of resources, and actively manage risk.
A good legal spend management program can help general counsels with issues such as: identifying potential or additional savings in legal bills, making certain firms adhere to budgets, managing rate increases, finding workflow efficiencies, and using analytics to make informed decisions. Hopefully the best practices gleaned from our experience with other companies can aid in establishing new and more efficient procedures and processes in the area of legal spend management for your organization.
For more information about how Stuart Maue can help you effectively manage your legal spend, contact us at: 1-800-291-9940 or e-mail: email@example.com