In partnership with Gartner (formerly CEB), we recently ran a survey on outside counsel billing and staff guidelines. With many looking for actionable insights to guide strategic decisions, we wanted to collect specific, quantifiable data to help us support the relationship between corporate legal or claims departments and their law firms, while ensuring a high level of guideline compliance.
Among the survey's notable findings are the following:
- 75% of respondents agree that cost control is a primary objective when implementing billing and staffing guidelines, but relationship-focused goals also remain important.
- Only 6% of respondents indicated that their guidelines make outside counsel’s invoices “very easy” to audit for compliance.
- Only 31% of respondents are satisfied with outside counsel’s compliance with their guidelines and none were “completely satisfied.”
(See additional results and insights in this infographic.)
E-billing systems implement billing guidelines and identify basic compliance infractions, but they are designed to work in tandem with human invoice reviewers and are therefore dependent on reviewers for their effectiveness.
The bottom line? While most claims and corporate legal departments have billing guidelines, few are happy with results. Once guidelines and an e-Billing system are in place, many take a detached approach to management and maintenance. It’s understandable. Internal review takes time and is not the reviewer’s only priority, and it is hard to audit effectively and accurately if unfamiliar with the underlying matter or guidelines. When it comes to responding to non-compliance, most don’t want to strain relationships with their firms and prefer to take a hands-off approach.
If this sounds familiar, and you want to use guidelines more effectively, consider engaging our LegalVIEW® BillAnalyzer solution. As an extension of your team, our invoice analysis professionals focus on driving your goals and facilitating the change management process for your department and law firms.
Improving Law Firm Relationships through Transparency and Support
It may seem paradoxical that careful auditing, and ultimately reducing, the amounts payable to law firms can strengthen your relationship with those firms. However, it can – it does this in four ways:
- A firm knows the exact reason an adjustment was made since each is “tagged” with one of your guideline provisions. They then have the opportunity address the adjustment and resubmit to be in compliance.
- This careful documentation uncovers behaviors that cost firms money, helping them learn your provisions to avoid similar adjustments in the future.
- This also provides you with necessary business intelligence to establish performance metrics and identify areas for corrective actions. For example, you can drill into adjustments by practice area or deep dive into law firms with high violation percentages.
- Last, as an independent partner taking a collaborative approach, we free your internal team of the need to handle the day-to-day enforcement and cumbersome appeals process that sometimes creates tension with firms.
Long-Term Compliance for Enhanced Quality and Increased Productivity
BillAnalyzer uses a combination of supporting infrastructure, such as artificial intelligence (AI) and robust benchmarking data and analytics, in addition to specially trained legal experts to review every invoice. By applying machine learning across tens of thousands of invoices, you get better outcomes, additional cost control and savings, and improved productivity.
Better Outcomes: Regardless of volume, technology analyzes invoices quickly and accurately, and guides analysts in prioritizing items for review. With your business goals in mind, we’ll also help you continuously improve guidelines and rules based on the unmatched insight that comes from over $80 billion in legal spend data.
Additional Cost Control and Savings: With technology discovering far more violations than internal reviewers could reasonably find, you get consistent, long-term cost control. And, as our AI technology learns behaviors, it gets better at spotting trends over time and prioritizing items for analysis.
Improved Productivity: Your internal resources are freed to focus on value-add work, saving you additional money on operational expense. Because our legal specialists focus solely on analysis and relationship management, quality of outside counsel work and time to resolution is improved
Billing guidelines are essential for reigning in costs, assuring good matter management, and managing law firm relationships, but they are only as effective as the effort to enforce and improve them. Ensure your billing guidelines are advancing your business goals while taking the bill review burden away from your busy in-house staff.
Check out this infographic to see more survey results on how legal departments like yours use billing guidelines and the challenges they face.