Corporate legal departments are being asked to do more with less, while law firms are increasingly seeking opportunities to improve efficiency and enhance client collaboration. Making progress in these areas benefits legal departments, and aligning corporate staff to these goals across departments increases the likelihood of achieving them. The ELM Forum, held by ELM Solutions on 18th October in London, provided an opportunity for this type of progress.
The event brought together representatives from corporate legal, IT, operations and procurement at some of Europe’s largest organisations. During the day, industry leaders shared their experiences and best practices around how billing guidelines and other tools and metrics can support win-win law firm relationships.
Here are ten of the key insights shared by conference attendees:
- Adhering to legal department guidelines can seem like a one-way street for firms. Provide your firm with detailed feedback on why each guideline was violated, in order to help them spot patterns that could be costing them money across multiple clients.
- Adherence to guidelines may fail because firms receive feedback from Accounts Payable, or other internal teams, in addition to the corporate legal department, resulting in confusion around the actual violation. If this is the case, ensure these teams know and understand the guidelines so your firms get consistent guidance, avoiding frustrations and confusion on all sides.
- The sheer quantity of guidelines may pose a challenge for firms. Start simple. A small list of guidelines is more likely to be read and understood by firms, and therefore stands a better chance of compliance from the start. This avoids the frustrating back and forth while firms familiarise themselves with guidelines. You can then add more over time.
- Avoid firms over-billing partner hours by jointly agreeing on the percent of work on a matter to be done by each role – for example, 20% partner, 40% associate, 60% legal support. Then be sure to measure. Understanding the reasoning behind any deviations improves communication with your firm, and enables better predictability for future matters.
- It’s difficult and time consuming for the legal department to approve invoices manually and spot all guideline breaches. Use an eBilling system to automatically flag invoices that don’t adhere to guidelines, and approve those that do for optimum cost control. This also frees up lawyers to spend time on firm relationship management and legal work.
- Create a win-win scenario by encouraging firms to provide development opportunities to junior associates, as they will incur a lower cost for your department. In addition, the most efficient timekeepers can be rewarded with more work opportunities to further optimise both their career and your spend. Just remember to keep an eye on rates when the junior associate is promoted!
- Implement relationship management meetings with firms at a suitable cadence. Ensure both parties clearly articulate their business priorities and discuss how you can work together to achieve these goals. For example, firms may have KPIs to improve speed of payment. Adhering to corporate client guidelines will mean that invoices are approved, and firms are paid, more promptly.
- At the conclusion of every matter, score your firms’ performance on guideline compliance, quality of work, adherence to budgets etc. Share these scores with firms, including how they benchmark against others, for a transparent relationship that will enable them to improve the value they deliver. If scoring every matter seems overwhelming, then begin with the large and/or complex matters initially. Use software to capture scores; this is less cumbersome for the user and ensures genuine, accurate benchmarking.
- Use an eBilling system to capture metrics and schedule automatic reports. These reports can be used at review meetings or at any point in the matter lifecycle to avoid surprises for the corporate legal department. Meanwhile, firms can be confident they’re continuing to meet your expectations.
- Reward your best performing law firms by sending more work to them. They will appreciate the additional revenue and you will know that your legal spend is being put to its best use.