This year has been a challenging one for corporate legal departments (CLDs), who have been forced to weather tremendous economic uncertainty while expenses have reached a 15-year high. Now, more than ever, CLDs must ensure they manage costs, make the most of new technology, and generally become more economically resilient.
Layoffs and budget cuts have been the typical responses. But those are short-term fixes for long-term challenges. While they may prove beneficial in the months ahead, they don’t solve the underlying problem of how to control spend. And they could hold a CLD back from being able to grow in the long run.
It’s better to adopt a total spend management approach. Total spend management entails implementing technology to stop spend leakage, gain complete visibility into all vendor invoices, capture cost savings, and enable strategic decision-making.
What is total spend management?
Total spend management is not a single capability. Instead, it layers automated e-billing capabilities, invoice review, and invoice conversion capabilities with cutting-edge technology like artificial intelligence (AI), machine learning, and predictive analytics. These components work together to offer complete visibility into expenditures and their impact on legal outcomes and business objectives.
The benefits of these capabilities are clear. For example:
- E-billing systems have been shown to offer cost savings by automating the transactional billing process.
- Cost management capabilities breed 20% improvements in billing guideline compliance and up to 10% savings in legal spend.
- AI-powered invoice conversion can save up to 5% on previously unadjusted invoices.
These are not perceived savings that may come to fruition in the months or years ahead. CLDs that adopt a total spend management mindset can see immediate reductions in costs and spend leakage, particularly in relation to bill review processes. The more invoices ingested into the system, the more intelligent and efficient the system becomes.
A focus on value-added work
Automating the bill review process not only pinpoints discrepancies in invoices that human reviewers might miss; it also frees up valuable time for corporate attorneys. No one signed up for the job because they love spending hours looking at invoice line items, and yet, that’s how many team members spend a good portion of their days. Relieving them of those important yet onerous duties allows them to spend more time on higher-value work, such as providing counsel, fostering relationships with law firms, and more.
Total spend management is, therefore, both a short- and long-term solution. It helps CLDs effectively manage costs today while maintaining their ability to add value to their organization at a time when it’s needed the most.
Dig deeper into total spend management
The bottom line is that workloads are increasing, budgets are tight, rates are rising, and economic headwinds continue to loom. Thus, CLDs are going to be continually pushed to find innovative ways to save money and improve efficiency.
Total spend management is one of those strategies. It offers a different way of approaching an age-old problem and backs it up with modern technology that delivers real value right now. And that makes it the perfect solution for the current moment.
For more information about total spend management, check out our new whitepaper, A better approach to spend management, which details how CLDs can control costs in the current out-of-control market. Because CLDs can lay a foundation of economic resilience today that will benefit their organizations for years to come.
