How Evolving Legal Spend Analytics Can Inform Data-Driven Decisions
Our Enterprise Legal Management clients implemented e-Billing as a way to save their staff countless hours spent on manual review, reduce legal spend by creating a framework for consistent enforcement of billing guidelines, but there’s an opportunity for so much more.
One of the most enjoyable parts of my job is getting to stay abreast of technology innovation, and right now Legal Spend Management is seeing an acceleration in both development and services being offered that create an opportunity to redefine the way we think and make decisions around the use of outside counsel and legal service providers. That’s why I was delighted to see the announcement of a strategic partnership with Bodhala.
Bodhala is the first technology company to apply machine learning and AI to legal billing data. The company’s proprietary machine learning engine delivers actionable insights, market and internal benchmarking reports, RFP optimization, and compliance management tools through a user-friendly dashboard.
An evolution fueled by data
For companies that have already implemented e-Billing, the addition of Bodhala provides a real opportunity to evolve their own legal spend management programs. That evolution should be fueled by data, the common language that your General Counsel can use to transcend the legal department and communicate with the CFO and the rest of the C-Suite about initiatives that will mitigate the risk of rising costs.
According to Bodhala CEO, Raj Goyle, “You can’t poke holes through clean, structured data—the data says what the data says. To establish credibility with your CFO and stakeholders, providing data-backed justifications to your legal spend and operations decisions is key. It’s your ticket to results-driven collaboration, success, and—most importantly—a healthy bottom line.”
The good news is that all legal departments that have implemented e-Billing for some time have incredible amounts of data to analyze. Through analysis of that data, there are important trends and insights that frequently emerge on how outside counsel is selected, the factors that are driving variances in legal spend forecasts, and where potential opportunities are missed. Some of the keys areas where analytics can help us:
- Optimizing outside counsel selection – legal spend analytics can help us realize which firms represent the best value in terms of work allocation, in other words how your firms classify their timekeepers and apply different levels of partners and associates to your matters. Analysis of this information provides the data needed to make apples to apples comparisons across firms and provide proactive recommendations to guide improvements in the firm selection process
- Understanding discounts – firms frequently offer discounts within their agreements, but keeping up with and taking advantage of them in a way that maximizes actual savings is extremely difficult. Using analytics to model the impact of proposed discounts can arm your attorneys with exactly the information they need to negotiate the best arrangements.
- Benchmarking – The analytics that creates the common language needed to evaluate law firms, matters, and legal practice areas help you reveal additional opportunities to drive value. Understanding how your law firms’ rates stack up against each other and the rest of the market and where your law firms might be spending a significant amount of time on tasks that can more efficiently be handled in-house can be game-changing.
A considerable step forward
Data is one of the most important assets that a legal department has today. The opportunity it presents to drive decision-making is considerable. Along with this partnership, Mitratech has greatly increased its own R&D development of machine learning and natural language processing within enterprise legal management.
The convergence of this development with the advancements in legal spend analytics and benchmarking represented by Bodhala will create an exciting future for the legal tech and operations ecosystem.