The vast majority of corporate legal departments (CLDs) are facing a conundrum: Workloads are growing in both volume and complexity at the same time that budgets are shrinking. This makes spend management more important than ever. CLDs must know that every dollar they’ve earned is being collected and that their budget is being spent wisely.
Of course, understanding the importance of spend management is one thing. Having the technology and processes in place to better manage spend is another. With that in mind, here are three questions corporate attorneys can ask themselves to assess and improve spend management.
Can you effectively enforce billing guidelines?
By and large, legal departments understand the importance of billing guidelines. But while more than 80% of CLDs provide guidelines to outside counsel, less than two-thirds routinely enforce them. Billing violations—which include duplicate or excessive line-item charges, block billing, listing vague tasks, and more—can cost large legal departments millions of dollars each year.
Many CLDs wrongly think that they’re on top of compliance simply because they’ve implemented an e-billing system. Others handle compliance by having employees manually comb through invoices to flag violations—something that’s unsustainable as workloads and employee burnout rise. To stay on top of compliance, CLDs must combine human expertise with artificial intelligence, as AI is well-suited for repetitive, time-consuming tasks like bill review.
Do you have complete visibility into spend?
Another foundational component of spend management is the ability to centralize all invoices to see where every dollar is going. This data can help with multiple aspects of legal operations: staffing, resource allocation, alternative fee arrangements (AFAs), and more. While e-billing systems play a role in ensuring visibility, they represent the starting line, not the finish line.
The reality is that most legal departments are still receiving at least some paper invoices. Having employees manually upload and approve such invoices is a waste of time and a hindrance to visibility. But AI can help here, as well. By using AI to convert paper or PDF invoices, legal departments can ensure nothing is missed, and all invoice data is captured quickly and easily for analysis.
Is your decision-making data-driven?
CLDs need visibility for a reason: so they can take historical data on spend and use it to make better business decisions going forward. Legal departments are collecting loads of data, but many don’t know how to effectively use it.
Legal departments with mature spend management capabilities can turn data into actionable insights. Even better, they have access to analytics and benchmarking within existing workflows, which can help power spend management and efficiency.
As mentioned, CLD budgets are shrinking. At the same time, law firm rates are on the rise. That makes it more urgent than ever for CLDs to know they’ve chosen the right law firm for the right matter at the right rate. To do so, they must harness multidimensional data for informed decision-making. Otherwise, money will be left on the table.
To learn more about how to improve spend management for your organization, download our whitepaper: A better approach to spend management. With the help of cutting-edge technology, your CLD will be able to save money, improve workflows, make more informed decisions, and increase billing guideline compliance—without sacrificing legal outcomes.
The time is now to take your spend management to the next level. What are you waiting for?
