There are many ways in which legal department operations within the financial industry can be particularly demanding. Efficiency and transparency are paramount for legal professionals seeking to optimize cost control and outside counsel management while achieving the organization’s business goals.
Third-party payments add complexity
Managing third-party pay invoicing is one area that presents significant challenges, particularly in commercial transactions where a bank’s customer pays law firm bills, rather than the bank itself. Although banks do not process these payments directly, they have a vested interest in tracking these expenditures, as they arise from the bank’s relationship with the law firm.
In many organizations, third-party payment tracking is either nonexistent or managed manually, resulting in inefficiencies and a high risk of errors. This lack of automation limits visibility and prevents comprehensive data collection. To address these challenges, organizations need a streamlined workflow that captures payment data without directly processing transactions.
How technology helps
A technology solution that incorporates tracking of third-party pay invoicing allows banks to gain greater visibility into expenditures related to their legal engagements, even when they are not the direct payers. This visibility is crucial for several reasons:
- Comprehensive outside counsel management: Spend data that encompasses third-party payments provides a more holistic view of the bank's relationships with its law firms, providing a clearer, more detailed picture of the engagement and supporting better-informed decisions.
- Rate negotiation: By tracking these expenditures, banks can gain a wider perspective on the overall financial impact of their relationships with law firms, positioning them to more effectively negotiate firm rates.
- Data capture: Banks can capture this essential financial data without the burden of invoice review or payment processing, ensuring that all relevant financial information is recorded while keeping processes simple and efficient.
Introducing workflow enhancements in Passport
Recognizing the importance of third-party pay invoicing, Wolters Kluwer ELM Solutions has introduced a new workflow enhancement in our Passport spend management capabilities. The third-party pay feature allows invoices to be submitted to our system for client reporting purposes. However, these invoices will not be subject to billing guideline scrutiny and will not be processed for payment.
This enhancement addresses a significant need within finance industry legal departments, providing a streamlined solution for tracking third-party payments in a way that is seamlessly integrated with the rest of the spend management program.
Meeting client needs
ELM Solutions designed the third-party pay feature to meet the specific needs of our clients. We understand that users do not want the complexity of invoice-level scrutiny; they simply need data on relevant payments. With this feature integrated into the Passport platform, users will now have access to enhanced transparency and efficiency in their legal operations.
Contact us for more information about Passport and third-party pay. If you are an ELM Solutions client, contact your account manager, who can help you understand how the feature could enhance your spend management program.
