Today’s large corporate legal and insurance claims departments are learning from their peers in purchasing and HR how to leverage technology. And they are training a new category of professionals to better manage the business of law. These legal operations professionals are under intense pressure to drive efficiencies and keep costs down while maintaining valuable relationships with outside firms.
Billing is one area that’s ripe for improvement. Many large corporate legal departments process millions of dollars in monthly legal expenses. Despite sharing robust billing guidelines with their law firms, some departments still have little influence and even less transparency when it comes to how their funds are spent — or the value of the services received. With dozens of outside firms to manage, billing discipline is often inconsistent across and even within law firms. Using in-house lawyers to review and manage the charges reflected in hundreds of monthly invoices and thousands of line items drains and misuses in-house resources and expertise.
In 2015, CEB (now Gartner) and ELM Solutions conducted an outside counsel performance assessment survey. In the survey, 37 percent of legal departments reported that they paid law firms more than they expected. Part of the problem is that many legal departments still rely on informal, undocumented expectations for lawyers regarding project scope and budget, as opposed to detailed and complete written guidelines. As a result, there is unnecessary haggling over bills rather than engaging in discussions that clarify expectations and strengthen relationships.